Brazil: Interim Pres. Temer to Introduce Tough Austerity Measures

SOURCEInSerbia

BRASÍLIA, Brazil – Brazilian interim leader Michel Temer, who came to power two weeks ago through what has been called “an institutional coup” that temporarily forced out Dilma Rousseff, has announced deep public spending cuts and other measures to balance the national budget.

In order to “balance the accounts,” Temer warned just one day after assuming power that Brazilians should brace themselves for austerity measures like higher taxes, spending cuts, changes to pensions and public sector layoffs.

Indeed, two weeks later, newly-inaugurated Finance Minister Henrique Meirelles presented these “tough measures that are needed to change the economic course of the nation” and make a serious dent in the national fiscal debt of some $47 billion.

Temer and Meirelles both insisted that there will be no cuts to Bolsa Família, a social welfare program that began in 2003 that intends to aid poor families that keep their children in school via conditional fund transfers.

The program, however, which aids approximately 1 in every 4 Brazilians and for many is the sole source of income, has been threatened by some of Temer’s colleagues who have said they want to make deep cuts to its budget or do away with it altogether.

Akin to the Rousseff impeachment proceedings, the Brazilian Chamber of Deputies and Senate (lower and upper houses of Congress) quickly approved the new measures in a joint-session lightning vote.

Last year, Rousseff’s government presented to Congress a similar, albeit milder, proposal to cut spending as the economic crisis was starting to worsen. A harsher proposal followed in early 2016 but both were brushed aside by the parliamentarians as they were too focused on initiating the impeachment proceedings against Rousseff.

Rousseff was ousted earlier this month after a vote in the Brazilian Senate (55 to 22) ruled that she would be suspended from her position for 180 days pending a trial. Since then, she has voiced her anger and disappointment at the “unspeakable pain of injustice.”

“My government has been the subject of intense sabotage,” Rousseff said outside the Palácio do Planalto, the seat of government where she formerly ruled, as she stood surrouned by her cabinet members and supporters.

Rousseff, who was re-elected in October of 2014 for another four-year term, was railroaded out of office by politicians she once considered allies that are now seeking to capitalize on the government’s fall.

Nearly 55 percent of Brazilian parliamentarians have some sort of criminal case opened against them, mostly in relation to corruption, bribery or money laundering while others are accused of assault and even kidnapping. Those same politicians, however, voted to unseat Rousseff, one of the very few politicians in the nation that has not been directly accused of illegal enrichment.

The official reason given for the action against the leader is that she allegedly transferred parts of the national budget between different funds in order to present a better picture of the national economy. This is standard practice in Brazil and in many nations (and has been seen especially in recent years with the global economic crisis) and while it does present a murkier view of a government and its transparency, it has never come close to toppling a national leader. In truth, judicial experts in Brazil and abroad have blasted the whole process as “irregular.”

Instead, budget-shifting tactics like these by any given government will have their consequences at the next election, especially in Brazil, one of the world’s biggest democracies. In this case, however, politicians have used public discontent over a stagnant economy and rampant cases of corruption (in which most of them and their parties are involved) to use Rousseff as a scapegoat.

In particular, most members of the big-tent (but currently right-leaning) Brazilian Democratic Movement Party (PMDB), which withdrew itself from the ruling coalition recently, have come out against Rousseff, as have members of other parties that were once allies.

The most notable PMDB members to do so include Eduardo Cunha, the man who started the impeachment effort and was the President of the Chamber of Deputies of Brazil until the first week of May when he was removed due to allegations of corruption and obstruction of justice.

Another notable figure is Temer himself, Rousseff’s Vice-President and now-interim leader who was recorded speaking of himself as President and about his presidential plans two months before the Senate’s impeachment vote even took place.

While some have sought to unseat Rousseff for their own personal gain or notoriety, others welcomed the news of impeachment simply due to their political leanings. Rousseff belongs to the center-left Workers’ Party (PT), who has ruled since 2003 through Luiz Inácio ‘Lula’ da Silva, Rousseff’s predecessor (2003-2011) and then through Rousseff herself.

Lula, who is credited with lifting 40 million Brazilians out of poverty during his time in power (2003-2011) and averaging an economic growth of 7.5 percent during that time, has also been accused of wrongdoing.

Prosecutors have accused him of accepting kickbacks (which he then used to buy a home in the coastal city of Guarujá) as part of the massive Petrobras scandal, in which prosecutors allege that over $1 billion was doled out and laundered to the the semi-state-owned energy company’s executives and certain politicians in exchange for valuable contracts with construction and engineering companies.

Although most of those named in corruption case do not come from the PT, the party has bared the brunt of the blame and so has Rousseff as she was Energy Minister (2003-2005) during a part of when the alleged crimes took place, and she also sat on the board of Petrobras during this time.

Several prosecutors overseeing the case, which began to filter out to the public in March of 2014 and is being called the biggest corruption case in Brazilian history, have cleared Rousseff of any wrongdoing and say that she did not know what was happening behind her back. The corruption began with kickbacks in 1997, according to the Attorney General, during the administration of center-right Fernando Henrique Cardoso (1995-2003).

“I may have made mistakes as President of the Federative Republic of Brazil, certainly, but I never committed any crimes,” Rousseff said forcefully to cheers and applause from supporters in Brasília on her last day in office.

In the meantime, Temer has named the 23 Ministers in his cabinet, the composition of which has caused controversy. In Temer’s cabinet, all the members are conservative white males, something which has not occurred in the incredibly diverse nation of Brazil since the end of the right-wing military dictatorship in 1985.

Temer will rule for the remainder of the 180 day-period since the date of Rousseff’s impeachment (May 12) while her trial goes on. In the case that she is definitively stripped of the presidency, he will then rule until January 1, 2019 unless the corruption charges with which he, unlike Rousseff, has actually been charged, derail his plans for the presidency.

For now, however, Temer is already facing pressure from both the pro-Rousseff crowd and Brazilian society at-large.

On the one hand, a diverse crowd of the country’s vast working and lower-middle classes, along with students and various organizations, are crying foul about Rousseff’s impeachment, as are global judicial and legal groups and the majority of foreign governments.

On the other side, the crowd that consists mostly of White, middle-class, upper-middle-class and well-off members of Brazilian society (those that wanted Rousseff’s ouster) will keep pressure on Temer to improve the economy.

The latter showed their discontent just three days after Temer took office through a ‘cacerolazo,’ a common type of protest across Latin America where demonstrators bang pots and pans down streets or through their windows while chanting and singing in order to show their displeasure with a particular figure, political party or event.

In late 2015, there were ‘cacerolazos’ heard throughout high-rise neighborhoods in São Paulo, Rio de Janeiro and other cities nationwide when Rousseff would hold a televised speech. This time, it was Temer’s turn to hear the discontent.

Brazilians protested en mass in June and July of 2013 against what they deemed to be poor public education and health care, high taxes, corruption and insecurity. Specifically, the protests took place as the FIFA Confederations Cup began, an event that represented the vast amount of money and resources the government earmarked toward past and future mega sporting events (like the FIFA World Cup in 2014 and this year’s Summer Olympics in Rio de Janeiro) when the money could have served the general public.

At that time, Rousseff made certain reforms in order to placate the public but the protests returned (albeit on a much smaller scale) last year with the primary concerns financial: the national economy is lagging (due in part to the catastrophic drop in oil prices and other commodities Brazil exports in large quantities) and inflation is on a slow but steady rise.

In response to the second wave of protests, Rousseff made attempts to jolt the financial sector back into life with a slew of reforms and bills but with a fractured coalition (that eventually fell apart) and a united opposition, her reforms were backlogged and her second term was essentially ‘lame-ducked,’ even as she re-shuffled her Cabinet in order to include many opposition figures.

Some of those economic changes instituted by Rousseff included austerity measures like budget cuts and tax increases, albeit on a much lower level of what is to come with Temer.

Ironically, the tax increases and cuts in public spending were instituted by former Economy Minister Joaquím Levy, an economic liberal to the core, who was named to the position by Rousseff in an effort to placate certain politicians and members of the public and to show that she can cooperate and make compromises.

Instead, she was readily criticized by the public so now, it just remains to be seen whether the public also condemns Temer (or another leader in case new elections are called) for making even deeper cuts and taking more unpopular austerity measures.

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