Oil, Corruption, and Uncertainty: The Impeachment of Brazilian President Dilma Rouseff

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On August 31, the Brazilian Senate voted 61-21 to formally impeach President Dilma Rouseff, who had been ousted in May amid charges that she illegally “[moved] government expenditures around within the Brazilian budget to make her government’s financial performance look better overall than it actually was.”[1]  Her impeachment comes at a time of economic difficulties and political scandal.  Rouseff and her Worker’s Party, which has held presidential power in Brazil for thirteen years, was at one time seen positively by the working class due to the importance she gave to labor issues, including the passing of a number of labor laws.  Those successes have apparently been forgotten as Brazil has been experiencing “its worst recession since the 1930s, with GDP falling for six straight quarters.”[2]  Combined with a number of corruption scandals, including a $3 billion scandal involving the country-owned oil company, Petrobras.  Despite the impeachment, it is uncertain whether the new president, Michel Temer, will be able to improve conditions.

While the movement of government expenditures is cited as the official reason for Rouseff’s impeachment, it is the Petrobras scandal that has most drastically affected her support among Brazilians and which had placed her in the most danger of facing impeachment.  The company was founded in 1953, with the government owning a majority share and smaller shares being held by groups in São Paulo and New York, as well as private citizens in Brazil.[3]  After being partly privatized by centrist party President Fernando Enrique Cardoso, state control was restored by Worker’s Party President Luiz Inácio Lula da Silva in the 1990s.[4]  In 2007, while Lula da Silva was still in power, a large deepwater, offshore, pre-salt oil field was discovered and the Worker’s Party, in an attempt to keep the oil out of private hands, created a “new regulatory regime that made Petrobras the sole operator of pre-salt discoveries.”[5]  The scandal involves the placing of Worker’s Party officials in the most prominent Petrobras executive positions, which they then used to divert funds and make profits for themselves which some estimates claim amount to billions of dollars thanks to the large interest and investment in the pre-salt fields.  While she has not personally been charged with corruption related to the scandal, Rouseff came under suspicion and lost trust among Brazilians because she had been the chairman of Petrobras from 2003 to 2010.[6]

While Rouseff was impeached on charges of corruption related to the reallocation of government revenue, she and her supporters describe the impeachment as a coup and that the movement of money is not inherently illegal, particularly if it is not for personal monetary gain.[7]  While Rouseff had seen low approval ratings as a result of the country’s economic crisis and political scandals, Temer faces his own wave of backlash connected to both the Petrobras scandal and the few measures he has enacted since taking office in May.

One of the biggest complaints among Brazilian’s is Temer’s cabinet, which has no female or Afro-Brazilian ministers, which is supposed to represent a country in which 51% of citizens identify as black or mixed race.[8]  Just the same, some cabinet ministers, including the anti-corruption and planning ministers, have resigned amid claims they actively tried to impede the Petrobras investigation.[9]  Temer was also recently found guilty of violating campaign finance laws, which may result in his being ineligible to run for political office for eight years.  There are also significant groups of Brazilians who see Rouseff’s impeachment and Temer’s appointment as counter to the country’s young democracy.[10]

For now, the country’s future is uncertain.  Rouseff is planning to appeal the impeachment decision to the country’s Supreme Court, although many believe that they will uphold the vote, if they choose to intervene at all.  Coupled with low approval ratings of the siting president, continued charges of corruption, and continuing economic crisis, it is too soon to know if Temer will be able to make positive changes or if the Worker’s Party will be able to take back control in the next election.

[1] Editorial Board, ”Exit Rouseff: Brazil impeaches a president, but will carry on,” Pittsburgh Post-Gazette, September 2, 2016.

[2] Matt Sandy, “Dilma Rouseff’s Impeachment is the Start of Brazil’s Crisis—Not the End,” Time, September 1, 2016.

[3] Joe Leahy, “What is the Petrobras scandal that is engulfing Brazil?” Financial Times, March 31, 2016.

[4] Ibid.

[5] Ibid.

[6] Ibid.

[7] “Exit Rouseff”.

[8] Romero.

[9] Ibid.

[10] Ibid.

Jessica Chrisman, Atlantic World, jchrisma@villanova.edu

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The United Kingdom and the Decision to Leave the EU

Cameron

Thursday June 23, 2016 is sure to go down as one of the most important dates in modern European history.  On this day, over seventeen million people voted for the United Kingdom to leave the European Union, the first country to do so since the union’s creation.  The European Union-as well as its predecessors-was created following World War II as a way to create peace among the countries of Europe; in the decades following its creation, the EU was seen as a way to bolster the economies and societies of Europe with trade agreements, the creation of a common currency (the euro), and guidelines that made travel between member countries easier.  In the wake of the 21st century economic crisis, however, many countries are beginning to see the heavy economic and social responsibilities of EU membership as a hindrance, rather than an aid.  Just the same, the many refugee and migrant crises throughout Europe, particularly the Syrian refugee crisis, have lowered support for the loose migration guidelines adopted by the EU.

To this end, Conservative politicians led the campaign to leave with arguments centered on the UK’s economy and autonomy.  In terms of political power and autonomy, proponents argued that leaving the EU would allow the UK to take back the political authority that many felt had been channeled to the EU bureaucracy in Brussels and to become free of “burdensome regulations” passed by the EU.  Many, in particular Nigel Farange, leader of the far-right United Kingdom Independence Party, argued that membership in the EU allowed too many immigrants to enter the country too easily, with over 330,000 immigrants entering into the UK in 2015 alone.  In terms of the economy, proponents centered their arguments on the fact that, as a member nation, the UK was required to contribute about £13 billion ($19 billion) to the EU budget, and argued that that money could be kept and better used within the UK.

Opponents of leaving mainly argued that Conservatives have over-exaggerated the impact of EU membership while ignoring the negative consequences of leaving.  In particular, opponents argue that Conservatives have over-exaggerated the sovereign power of the EU and the number of laws it passes.  At the same time, they argue that such laws only help the UK.  For example, the European Arrest Warrant makes it possible to arrest criminals in any member countries, not just the country in which they committed a crime, making it more difficult for criminals to escape justice; leaving the EU would allow a criminal to commit a crime in the UK and more easily escape justice.  Economically, opponents argue that, with 44 percent of exports going to other EU countries, the UK’s economy will be negatively impacted by leaving.  Though not an official part of the campaign for remaining in the EU, some had voiced concerns that the call to leave was created by a rising populist and nationalist faction and that many arguments for leaving are grounded in racist ideas of immigration.

While the long term effects of the UK’s vote to leave the EU are hard to determine, the immediate effects became visible within one day of the vote, particularly the impact on the economy.  Along with the British pound dropping to its lowest value against the dollar since 1985, stock markets in the UK, US, and the rest of Europe plummeted, with shares dropping 3.2 percent, 3.6 percent, and 8.6 percent respectively.  Along with these markets, economies around the world, including in China, have slowed significantly after the vote, as a result of unease and uncertainty among investors.  For the UK, the vote to leave has had two very important, and unsettling, consequences.   In a vote in which neither Ireland nor Scotland voted to leave, the results have increased calls for new independence votes.  At the same time, is has become clear in the days following the vote that many who voted to leave are now regretting their choice; Google reported a 250% spike in searches of “what happens if we leave the EU” as well as spikes in questions such as “what is the EU” and “what is Brexit” in the UK hours after the polls had closed.  At the same time, a petition open only to UK residents calling for a re-vote has been signed by 2.7 million people (the petition was created before the vote in the event of a vote for either side of less than 60 percent based on a turnout of less than 75 percent, but the number of signatures rose sharply as more UK residents took to social media to voice regret over their votes to leave).

For now, it is hard to know what the long-term impact of the vote will be.  Some, including German Chancellor Angela Merkel, have voiced optimism and caution, saying that there is no hurry for the UK to completely divorce itself from the EU, a process that some expect to take around two years.  Some argue that the UK’s economy will be able to recover and the global economy will eventually stabilize; others argue that this vote will have long-lasting negative consequences, with some arguing that the vote will bring on a world-wide recession.  Regardless of the outcome, this vote will surely be placed among the most significant moments of European history.

For more information see:

http://www.telegraph.co.uk/news/2016/06/16/leave-or-remain-in-the-eu-the-arguments-for-and-against-brexit/

http://www.vox.com/2016/6/22/11992106/brexit-arguments

http://www.nytimes.com/2016/06/25/business/international/brexit-financial-economic-impact-leave.html

https://www.good.is/articles/brexit-petition-eu-referendum-revote

http://www.theverge.com/2016/6/24/12022880/google-search-spike-brexit-why-leave-eu