[LINK] "Brazil in free fall"

[rfmcdonald]

Open Democracy's Fernando Betancor outlines Brazil's annus horribilis.

This was supposed to be a triumphal year for Brazil and its President, Dilma Rousseff. The first woman to be elected to that office, Mrs. Rousseff was the protégé and successor to the popular Luíz Inácio (Lula) da Silva; she had inherited in 2011 a government with sound finances, a burgeoning middle class and the opportunity to host the wildly popular World Cup in 2014. This year, Brazil is supposed to host the 2016 Summer Olympics, which would have been the showcase for a modernized country that had successfully escaped the “middle income” trap of developing nations. Instead, the Brazilian economy has been in freefall for almost 8 consecutive quarters, the country is facing a new and frightening pandemic disease, the work for the Olympics is far behind schedule and Mrs. Rousseff’s Administration is being rocked by such horrendous corruption scandals that the Congress is weighing her impeachment. Instead of a triumphal year, Brazil has entered the year of ungovernability.

The political trouble started almost as soon as she had been sworn in for her second term; an investigation in the south of the country led the Federal Police to a known money launderer, Alberto Youssef, who had made a “gift” of a Range Rover to the Director of Supplies of Petrobras, Paulo Roberto Costa. As arrests were made and bargains were struck, the trail led to a clique of corporate executives, middle men and politicos who were engaged in a number of illicit activities including: money-laundering, price fixing, illegal campaign contributions, and bribery, sums totaling over 2.1 billion reais (USD 1.3 billion at 2012 exchange rates). This led to the arrest and indictment of 11 senior executives from four Petrobras suppliers, 3 top Petrobras executives and more than 50 politicians, all but one of them related to the Rousseff coalition. To find so extensive a list of allegedly corrupt public figures, one would have to go to Spain, where there are over 2,000 under varying degrees of indictment. These were not minor officials either; implicated are the President of the Senate, the President of the Chamber of Deputies, the Treasurer of the Worker’s Party, and numerous other Senators and Deputies. The list continues to grow and this Friday, the popular former President Lula da Silva had his house searched by the Federal Police while he was taken into temporary custody to make a declaration.

The implications of this magnitude 9 political quake go far beyond Petrobras or the Rousseff Administration. It highlights the way things are done in the country, the virtual impunity with which major corporations can carry-on their “business as usual” shenanigans and the insignificance of the well-being or wishes of the average Brazilian amongst all the sordidness. In November 2015, a retaining dam burst at an iron mine belonging to BHP Billiton and Brazilian JV partner Vale. The resulting flood of toxic waters, containing fatal concentrations of arsenic, mercury and other heavy metals, flowed down the Rio Doce, killing 17 people and destroying aquatic life for 500 miles until emptying into the South Atlantic, where it has also played havoc with coastal fisheries and ecosystems. The companies have recently agreed to a settlement of USD 1.55 billion in damages, but there will be no investigation of possible criminal negligence in the dam rupture; and while the damages are certainly large, they represent less than one quarter of profit for Vale SA, which earned USD 1.68 billion in the second quarter of 2015 alone.