Brazil, the economic giant of South America and 8th largest globally, has been cursed with poor governance for decades. The electorate has responded to the irresponsible siren call of government largesse, for most of the 21st century. The negative and sometimes freewheeling role, that public officials have played in the economy, has reduced overall growth and made the entire country poorer.
The Brazilian left-wing socialist Workers Party (PT) in power from 2003 to 2016, provided short term rewards at the expense of investment and long term growth. In the early years of PT rule, the economy did grow and poverty was being reduced, but it all proved to be illusory.
The social programs promoted by President Luiz Inacio Lula da Silva, to maintain his popularity from 2003 to 2011, allowed him to leave office with a 90% approval rating.
These anti-poverty measures and social entitlements, would prove to be financially unsustainable, under his successor Dilma Rousseff.
President Rousseff term in office beginning in 2011, proved to be a disaster. Not only for her party, but the country at large. Her subsequent mishandling of the economy, helped bring about the worst recession in the history of Brazil.
Politically, the nation of Brazil is once again at a crossroad, much like when democracy was restored in 1985. The country had been previously run by the military, since 1964.
The economic and financial issues facing the country, are once again, adding to the urgency for change.
Voters will decide if they will permit PT another opportunity in power, by supporting Fernando Haddad or instead, support a new direction for the country, by endorsing the populist Jair Bolsonaro.
Haddad is a stand in, for former President Lula da Silva, who was barred from seeking re-election because of a corruption conviction. He remained popular among a sizable portion of the population, despite running for office from jail, since April.
His imprisonment stems from the wide ranging corruption investigation at Petrobas, the state-run oil company. The whole real estate bribery scheme, is known locally as Operation Car Wash. He was found guilty in July of 2017 and the appeals court unanimously upheld the conviction, in January of this year.
The absurdity of the situation was finally put to rest, when the country’s electoral court ruled overwhelmingly, at the beginning of September, that Lula is ineligible to run for office.
As the previous mayor of Sao Paulo from 2013 to 2016, Haddad was able to reduce the city’s budget deficit and regain an investment grade credit rating, for the municipality. Despite this achievement, he still failed in his bid for re-election. He has turned out to be a poor candidate.
Haddad is a former professor, with a degree in economics, law and philosophy. He was the education minister, during the tenure of former President Lula. His campaign is sputtering, partially attributable to the disastrous end to the Rousseff Presidency and the PT hold on power.
Despite Rousseff’s narrow electoral victory in 2014, she would be impeached just two years later. She went from a 58% popular approval on the eve of her re-election, to 23% by February of 2015.
Following the March Protests of the same year, public approval had dipped to 13%, with a disapproval level at a whopping 62%. By July of 2015, Rousseff’s popularity fell to just 9%, with ever larger demonstrations, demanding her impeachment throughout the rest of the year.
Rousseff herself, was not considered corrupt. Her final undoing, was in her failed attempt to hide the true size of the federal budget deficit. The social spending and entitlements were swamping government finances.
Corruption was rampant during these years. PT encouraged bribery on an unprecedented scale, to maintain its grip on power. This greatly added to the anger of the electorate.
Crime was also escalating to enormous proportions, which was fraying societal norms. It was also undermining the faith people had, in the government overall.
Insecurity along with a crumbling economy that began in 2012, finally brought an end to PT political fortunes.
Rousseff was succeeded by Vice President Michel Temer. He will fill out the remainder of her term in office, which ends January 01, 2019. To his credit, he immediately called for a government of national salvation.
President Temer intended to overhaul labor laws and the unaffordable pension system. He also promised to curb profligate public spending. Much of his planned reforms, have failed to materialize.
His stint in the presidency, has so far remained unremarkable. His involvement in the impeachment of Rousseff and his own involvement with bribery and corruption, have made him hugely unpopular. Despite widespread protests and two impeachment attempts, he has refused to step down.
Temer along with his Brazilian Democrat Movement Party (PMDB), are seen by many voters as being part of the widespread dishonesty, among those political elites presently in power.
Whether accurate or not, it is striking a chord with a large segment of the populace. What is going on in Venezuela, is impacting politics throughout South America and Latin America. It has helped to further discredit the leftist movement, in a number of other countries.
There are political pundits that fear that Bolsonaro, who endorses a full return to market economics, will also become authoritarian, once he gains power.
As a former army captain, Bolsonaro instills confidence that he is far better equipped than his opponent, to handle the wave of corruption and crime, that has swept the country.
Bolsonaro has enlisted the help of Paulo Guedes,an economist from the United States, to persuade the business community in Brazil, that there will be a return to legal order and financial stability.
Guedes has reinforced the idea, that there is a need for government spending cuts. Pension reforms will become necessary, if the country is to avoid bankruptcy. Privatizations and the reduction in business regulations, are essential elements, in bringing back skittish foreign investors.
Concerns are being raised that Bolsonaro has little patience, for the checks and balances of a democratic system. Critics are raising alarms, over his supposed affronts to women and minority groups. His populist rhetoric concerns libertarians and supporters of civil rights.
He is also being accused of possessing dictatorial tendencies, that will inexorably undermine Brazilian democracy.
Bolsonaro is an admirer of Pinochet, the former President of Chile. In his mind, the general brought order and prosperity to Chile, after the overthrow of Allende, who had wrecked the economy. He is quoted as saying that Pinochet did what had to be done.
Comparisons are already being made between him and the controversial leadership style, exhibited by the American President Donald Trump.
Bolsonaro’s plans to favor farmers over environmentalists and his intention to withdraw Brazil from the Paris climate change accord, are obvious similarities with President Trump. As is the claim of fake news, which has become a popular catchword with both men.
Liberal activists and their allies on the left, point to Bolsonaro’s comments concerning a change in giving government priority and protection to the victims of crimes, rather than the perpetrators. Although this may seem alarming to some social reformers, the idea is actually quite popular, among the present electorate.
His strong support of law enforcement, where he urges the police to actually kill criminals, assuages the anger felt by a populace. They have become enraged over the government’s inability, to stem the rising level of violent crime.
As a social conservative he opposes abortion and further legalization of drugs. This may be an anathema to those on the left, but is not too far from mainstream political thought, as to be unelectable.
Bolsonaro is more centrist, than one might expect. As a congressman for 27 years, he is on record for voting against pension reform and a number of privatization efforts, several times.
The ongoing sluggish economy, after a brutal recession, remains a major concern for many voters. The electorate is far more tolerant of personal indiscretions and dishonesty, when there is rapid economic growth.
Brazil has been dismal.
The Gross Domestic Product (GDP) is expanding just 1% year to year. This low level of growth, will not provide sufficient jobs, for the huge numbers entering the workforce. Unemployment, remains at a stubborn rate of 12.3%. Formal job creation remains null.
Nor will it allow any extra spending, involving popular government programs.
The economy is being damaged by constant work stoppages and protests. In the second quarter of this year,it was the disruptive strike by the trucker’s union and individual drivers, over the hikes in fuel costs.
Investment continues to fall, dipping recently an additional 1.8%. This is a result of the decline, in overall business confidence.
The ongoing federal budget deficit although somewhat declining, disallows further public investment, as the GDP to debt has reached a high of 77%.
The probable election of the seven term congressman Jair Bolsonaro, is the result of a political class that has totally failed the country. Seemingly more interested in self enrichment, this group as a whole, has angered the electorate. Their unabashed corruption, has finally become intolerable across society.Brazilians have tired of economic stagnation, meager employment opportunities and rampant crime. However foreboding, some analysts may want to claim the election of Bolsonaro will be, it is democracy in action. The people of Brazil are voting for change. That always comes at some risk.
There are hopefully in place, enough democratic safeguards, to prevent a new administration exceeding its mandate. The legislature and the judiciary along with the media, seem adequate enough, to moderate any major deviation from Brazilian democratic principles.