{"id":9241,"date":"2017-05-26T15:49:39","date_gmt":"2017-05-26T15:49:39","guid":{"rendered":"http:\/\/www.lifeandnews.com\/articles\/?p=9241"},"modified":"2017-05-26T15:49:39","modified_gmt":"2017-05-26T15:49:39","slug":"brazil-plunges-once-more-into-political-crisis-jeopardizing-economic-recovery","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/brazil-plunges-once-more-into-political-crisis-jeopardizing-economic-recovery\/","title":{"rendered":"Brazil plunges once more into political crisis, jeopardizing economic recovery"},"content":{"rendered":"

Terry L. McCoy<\/a>, University of Florida<\/a><\/em><\/span><\/p>\n

Brazil\u2019s massive corruption scandal<\/a> \u2013 which has brought down dozens of politicians and business leaders \u2013 has ensnared its latest victim: President Michel Temer, who got the job after his predecessor was impeached<\/a>. \"The<\/p>\n

Allegations that Temer approved a bribe to a corporate executive<\/a> triggered demands<\/a> that he resign or be impeached as well. He has refused, even as protests have escalated and turned violent<\/a>.<\/p>\n

The ensuing crisis threatens to derail a fragile economic recovery and the reforms Brazil<\/a> needs to get back on its feet. <\/p>\n

But once again, a political scandal at the very top is getting in the way. The irony is that Temer\u2019s alleged misdeeds threaten to undermine the economic upturn his own government launched. <\/p>\n

\n \"\"
\n Temer continues to profess his innocence and resist demands that he go.<\/span>
\n AP Photo\/Ricardo Botelho<\/span><\/span>
\n <\/figcaption><\/figure>\n

Temer takes charge<\/h2>\n

Believe it or not, Temer only just completed his first year in office. <\/p>\n

Previously Dilma Rousseff\u2019s vice president, he assumed her duties<\/a> as the interim head of state in May 2016 after she was suspended and faced an impeachment trial in the Senate. He officially became president in August, when she was convicted and removed from office \u2013 though she was never directly linked to the the bribery and kickback scandal engulfing Brazil.<\/p>\n

While the corruption scandal swirled around his government, Temer had never before been personally implicated. This changed on May 17, when a Brazilian newspaper<\/a> reported on a secretly recorded conversation in which the president is heard encouraging the CEO of JBS<\/a> \u2013 the world\u2019s biggest meat producer<\/a> \u2013 to provide hush money to a former lawmaker who\u2019s currently in jail. Temer promised in return to help resolve a problem JBS had in Congress.<\/p>\n

Lifting up a sinking ship<\/h2>\n

Given the cloud over Temer, even if he were able to serve out the remaining 18 months of his term \u2013 which appears increasingly unlikely \u2013 his ability to govern effectively and push through the tough economic reforms needed<\/a> to sustain the incipient recovery is doubtful. <\/p>\n

Following nearly a decade of sustained expansion<\/a>, Brazil\u2019s growth began to lose steam<\/a> in 2011. In both 2015 and 2016, GDP contracted by over 3.5 percent. Inflation ballooned to nearly 11 percent in 2015.<\/p>\n

The central bank raised interest rates in an effort to tame inflation, public debt and the fiscal deficit rose, unemployment and poverty grew \u2013 eroding the social gains of the previous decade \u2013 and millions of Brazilians began falling out of the middle class.<\/p>\n

Temer, upon inheriting an economy in deep recession, promised to revive it<\/a>. <\/p>\n

His prescription \u2013 a combination of austerity and market-friendly reforms \u2013 was a break with the left-leaning policies<\/a> of his Workers\u2019 Party (PT) predecessors, including Rousseff. His initial Cabinet \u2013 all male, all white \u2013 also stood in stark contrast to the inclusive PT governments.<\/p>\n

The business community and financial markets<\/a> welcomed Temer\u2019s stewardship of the economy. The Bovespa stock market and real currency made big gains<\/a> on his assuming office. And he took significant steps to deal with the deficit. He obtained congressional passage<\/a> of a constitutional amendment to cap increases in public spending at the rate of inflation for 20 years, and the government set up a new privatization program.<\/p>\n

The economic situation improved<\/a>. Inflation fell, allowing the central bank to reduce borrowing costs, and foreign investment began to return. Most importantly, the economy was forecast to grow again<\/a>, weakly in 2017 but picking up in subsequent years. Unemployment had stopped climbing. <\/p>\n

When I was in Rio de Janeiro and Sao Paulo in March, Brazilians told me that their country seemed to be finally coming out of its economic malaise. I wished them well but was skeptical given the unresolved political environment.<\/p>\n

Unfinished business<\/h2>\n

Indeed, there is much unfinished business in reforming Brazil\u2019s economy. <\/p>\n

For example, labor markets are very rigid, making it hard for companies to hire and fire, and the generous pension system is fiscally unsustainable. Winning passage of such reforms was always going to be difficult, but Temer\u2019s growing unpopularity makes it even harder. <\/p>\n

Despite his success in reigniting the economy<\/a>, Temer\u2019s standing in the polls has been abysmal, with just 10 percent rating his government<\/a> as \u201cgreat\u201d or \u201cgood.\u201d And that was before the current crisis. <\/p>\n

The revelations linking Temer personally to corruption allegations have dealt a fatal blow to prospects for sustaining the recovery and pursuing more reforms. <\/p>\n

Temer continues to insist he will not resign, but the opposition is increasingly vocal. Should Temer vacate the presidency by resigning or impeachment, Congress would elect a replacement to serve until January 2019. <\/p>\n

Who will take over at that point is very much up in the air. Given the bankruptcy of the traditional political class and economic elite, the country has a serious leadership vacuum. Two of the most recent presidents are under active criminal investigation as are members of Congress, cabinet ministers and business executives. Others are already convicted and serving time. <\/p>\n

This is bad news for Brazilians, who deserve stable leadership, free of corruption and dedicated to strengthening the economy and improving their lives. The present turmoil is not conducive to such a favorable outcome.<\/p>\n

Terry L. McCoy<\/a>, Professor Emeritus of Latin American Studies and Political Science, University of Florida<\/a><\/em><\/span><\/p>\n

This article was originally published on The Conversation<\/a>. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Terry L. McCoy, University of Florida Brazil\u2019s massive corruption scandal \u2013 which has brought down dozens of politicians and business leaders \u2013 has ensnared its latest victim: President Michel Temer, who got the job after his predecessor was impeached. Allegations that Temer approved a bribe to a corporate executive triggered demands that he resign or […]<\/p>\n","protected":false},"author":44,"featured_media":9242,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,277],"tags":[804,673,1880,1878,672,2433],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/9241"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=9241"}],"version-history":[{"count":1,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/9241\/revisions"}],"predecessor-version":[{"id":9243,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/9241\/revisions\/9243"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/9242"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=9241"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=9241"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=9241"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}