On 17 April 2016, the Brazilian Chamber of Deputies passed a motion to impeach President Dilma Rousseff. Of the 513 deputies who sit in Brazil’s lower house, 367 voted in favour of the motion. Rousseff’s fate now rests with the Senate.
Brazil is currently experiencing the worst recession in a century. It entered it in 2014 and it is not expected to emerge from it until 2018.[1] Last year the economy shrank by 3.8% - the biggest annual drop since 1990.[2] 2016 threatens to be even worse. Unemployment is reportedly on the rise, all three major ratings agencies have cut the country’s credit rating to junk status, and the value of the Brazilian Real against the US Dollar has fallen by 24% since the beginning of 2015.
All this despite the fact that the country emerged relatively unscathed from the global financial crisis, its economy bolstered by China’s seemingly insatiable appetite for commodities – particularly oil. In fact, Brazil surpassed the United Kingdom in 2011 to become the sixth largest economy globally.[3] However, as China lost its appetite, commodities boom turned to commodities bust and Brazil’s economy nose-dived.
Linked to the drop in consumer and investor confidence in both business and the government is the culture of rent-seeking and endemic corruption embedded in government. One-third of current deputies have been either charged with or are currently under investigation for wrongdoing.[4] This borders on the mind-boggling, even for those of us accustomed to South African realities. In 2014, the World Bank found Brazil to be more corrupt than South Africa.[5]
The Petrobras Scandal
In 2004, contractors who had historically competed for tenders from the majority state-owned oil company came together and colluded to inflate the price of the contracts awarded. In turn, they paid bribes to those senior executives for turning a blind eye or actively playing a facilitating role. As Petróleo Brasileiro S.A. – the world’s thirteenth biggest oil and gas company in 2015 more commonly known as Petrobras – spends spends on average $20 billion annually on infrastructure and other development, this was rent-seeking on a Herculean scale.
Dozens of politicians were implicated, hailing from every corner of the Brazilian political spectrum. Rousseff’s Workers’ Party, in power since 2002, is thought to have received $200 million in kickbacks since 2004. It’s alleged the money was used for campaign financing. An investigation by the Electoral Court into whether campaign-financing rules were broken in the 2014 election is presently underway.
In March, Rousseff made Former President Luiz Inácio “Lula” De Silva her Chief of Staff. Quite clearly, this was to protect him from prosecution – in Brazil, only the Supreme Court can authorise an investigation of a sitting cabinet member.[6] Hours later, tapes were leaked of secretly recorded conversations held between Rousseff and Lula confirming these suspicions.[7] Millions of Brazilians took to the streets in outrage.
In all, the total amount thought to have been siphoned off since 2004 is pegged at nearly $3 billion.[8] It is a truly astronomical figure. And though it sent shockwaves through the international community – due to its scale and sheer brazenness – its effects domestically have been far more profound:
• 117 indictments have been issued, five politicians arrested, 13 companies face legal action.[9]
• Rousseff once held a 92% approval rating; she was also Chair of the Petrobras board from 2003 to 2010. It happened ‘on her watch’ so to speak. The population feels understandably betrayed.
• A burgeoning middle class, consolidated during the past decade of economic growth, finds itself heavily hit by high prices, and many are without work. Their general quality of life has significantly decreased.
• National ambitions for long-term stable prosperity have been shattered. “I’ve never seen my countrymen so angry,” said Maurício Santoro, a political science professor at Rio de Janeiro State University. ‘We have this sense that the dream is over.”[10]
What happens now?
The impeachment motion now passes to the Federal Senate – Brazil’s upper house. By mid-May, the Senate must decide by way of simple majority (41 of 81) whether to accept the motion. If it does, which is likely, then Rousseff would then have to surrender her powers for 180 days to the Vice-President, Michel Temer, whilst her impeachment was considered.
Temer is head of the PMDP (Brazilian Democratic Movement Party), a big tent party with members representing a range of political positions and ideologies – from conservatives to social democrats, nationalists to populists to former guerrilla fighters. If and when the Senate votes to accept the motion, the current Workers’ Party led government will be replaced by an interim centrist government under Temer.
Within 180 days, the Senate will pass judgement on whether to approve the motion for impeachment. Should two-thirds vote in favour, Rousseff will be immediately removed from office and Temer’s government will assume power until the next general election, set to be held in 2018. There have been contingent demands to bring the election forward should Rousseff be impeached. But given the legislative and constitutional implications this is unlikely.[11]
Once removed from power, Rousseff will be prosecuted for her role in the Petrobras scandal. Interestingly, the same fate could theoretically await Temer. The Vice-President faces his own impeachment motion. However, due to the support Temer enjoys in the lower house, this too is unlikely.
What poses a more serious threat to Temer’s presidential ascendency are the results of the investigation by the Electoral Court. Temer was on Rousseff’s ticket. Should the Electoral Court find weight in the allegations, both Rousseff and Temer would be stripped of office and a spot election called.
Learning from others’ mistakes
Recently, our President faced his own impeachment motion. Thanks to effective party whips and the large majority the ANC enjoys in Parliament, the motion was overwhelming voted down. But #ZumaMustFall is far from over. Indeed, the weight of voices calling for Zuma’s resignation seems to grow by the day. Ahmed Kathrada, Zwelinzima Vavi, Trevor Manuel have all recently – and very publically – demanded he step down. The ANC in Gauteng has also called on him to ‘do the right thing’.[12]
So given the relatively precarious situation Mr Zuma finds himself in, it may be expedient for him to cast an eye west.
As in Brazil, the South African political climate is very adversarial, even combative. Tensions between the EFF and the ANC are especially fraught. With municipal elections approaching, the situation is only likely to deteriorate further. Moreover, the ANC itself is increasingly fractured. Such a divisive atmosphere, both in Parliament and within the ANC, causes massive (and further) inefficiencies in service delivery and administration. Dissatisfaction spreads.
As in Brazil, patrimonial practice within government is endemic – from the local level right up to the Executive. Allegations of corruption, often substantiated, have eroded the public’s trust in government. Further, the seemingly accepted culture of nepotism and cronyism has shaken the public’s belief in the very foundations of the democratic process. Disillusionment spreads; dissatisfaction becomes anger.
As in Brazil, South Africa’s economy has suffered (though not as badly), and suffered at least in part because of the incompetence and, no doubt, the dishonesty of government. The firing of Finance Minister Nene sent shock waves through the financial system. Unlike Brazil, however, South Africa is still clinging on to investment grade credit ratings – but by its fingernails. There is a substantial risk of meeting Brazil’s fate and being downgraded to junk. Foreign investment flees; the money dries up.
South Africa’s economy is admittedly not in recession. But it is close; and a downgrade to junk would significantly increase the likelihood. The risks are to the downside, and Gross Domestic Product per capita is not expected to reach its 2014 level again until 2020.[13] If the economy goes into recession, jobs will be lost, poverty and crime will rise, and fewer South Africans will be able to put food on the table. Anger becomes fury; disillusionment becomes civil unrest.
Dilma Rousseff has not yet been found guilty of breaking any law. But that may change if she is found wanting by the Brazilian Senate and tried by the Supreme Court. By contrast, Jacob Zuma has been found to have violated the Constitution by the highest court in the land. The President has broken the law.
Amidst the political unrest and deteriorating economic conditions, events such as this act as a catalyst. It gives purpose and direction to widespread resentment, galvanising opposition parties and the population at large into unified action. It divides the ruling party itself, pitting members against each other and plunging the government into crisis. Removal from office may follow.
Four conditions must be met for impeachment. First, the political will to impeach must be present in the legislature. Second, the electorate must be politically disaffected and collectively aggrieved. Third, the nation itself must be in disarray. Lenin, no slouch on such matters, argued that a 'revolution is impossible without a nation-wide crisis affecting both the exploited and the exploiters'. In the 21st Century, such crises increasingly revolve around failing economies rather than conflict. Finally, there must be evidence of wrongdoing.
At present, South Africa meets all the necessary conditions for Presidential impeachment save one – a recession. The lesson for President Zuma? Get the economy growing, and fast; a lot is riding on it.
Bibliography:
[1] International Monetary Fund, World Economic Outlook, April 2016
[2] http://money.cnn.com/2016/03/03/news/economy/brazil-recession-lower-middle-class/
[3] Ibid.
[4] http://www.theguardian.com/world/2016/apr/18/dilma-rousseff-congress-impeach-brazilian-president
[5] World Bank Governance Indicators
[6] http://www.theguardian.com/world/2016/mar/17/brazil-government-crisis-briefing-dilma-rousseff-lula-petrobas
[7] http://www.theguardian.com/world/2016/mar/17/release-tapped-phone-calls-lula-rousseff-deepens-brazil-chaos
[8] http://www.nytimes.com/2015/08/09/business/international/effects-of-petrobras-scandal-leave-brazilians-lamenting-a-lost-dream.html?_r=0
[9] Ibid.
[10] Ibid.
[11] http://www.theguardian.com/world/2016/apr/18/dilma-rousseff-impeachment-what-happens-next-in-brazil
[12] http://www.timeslive.co.za/politics/2016/04/12/ANC-in-Gauteng-calls-on-Zuma-to-do-the-%E2%80%98right-thing%E2%80%99
[13] International Monetary Fund, World Economic Outlook, April 2016
