The impeachment crisis shaking Brazil

April 20, 2016

On April 17, Brazil's lower house of Congress voted by a two-thirds majority to impeach President Dilma Rousseff of the Workers' Party (PT, by its initials in Portuguese), forcing her to relinquish office pending further procedures. The presidency now passes to Dilma's (as she is widely known in Brazil) former vice president Michel Temer of the conservative Brazilian Democratic Movement Party (PMDB), who only resigned from her cabinet last month. Her government will now appeal the decision to the country's Supreme Court, before the final vote proceeds to the Senate in the coming months.

The carnival of reaction on display by conservative Congressional deputies during the vote only demonstrates the contempt in which Brazil's elite hold the vast majority of the population. With a GDP in excess of $3 trillion, Brazil is the seventh-largest economy in the world, approximately five times larger than neighboring Argentina. What happens in Brazil matters for all of Latin America.

Faced with a newly ascendant right in Argentina and Venezuela and a worsening continent-wide economic crisis, a decade and a half of center-left and reform-oriented governments known as the "Pink Tide" is rapidly receding. Since the 2002 election of Luiz Inácio "Lula" da Silva, Brazil appeared to provide an alternative to neoliberal austerity, and it even seemed for a time immune to the global Great Recession. Today, the country is facing its deepest political and economic crisis in decades, and the PT's promise of social justice is in tatters.

Ana Saggioro Garcia teaches history and international relations at the Federal Rural University of Rio de Janeiro and is an associate of the Institute of Alternative Policies in the Southern Cone of Latin America. Along with Patrick Bond, she is the editor of BRICS: An Anticapitalist Critique, published last year by Haymarket Books.

Todd Chretien and Bruno Ruviaro interviewed her as the impeachment vote was unfolding in Brazil's Congress.

WE WILL come to the question of the impeachment, but let's begin with some background. Between 1964 and 1985, a brutal military dictatorship ruled Brazil. Can you describe how the Workers' Party emerged out of the struggles for democracy and became a mass party in the process? What were the party's initial political principles and goals?

THE WORKERS' Party (PT) was born in the early 1980s, along with two mass working-class organizations, the Workers' Unified Central (CUT) and the Landless Workers' Movement (MST). The foundation of the PT emerged from dissidents in other parties and political organizations involved in clandestine struggles (armed or not) against the dictatorship.

Since its inception, the PT has differentiated itself from other Communist parties of the time because it was not associated with the USSR. As such, the party did not represent the classic "Communist threat," in spite of maintaining socialism as an ideal, which the party closely linked to democracy. Therefore, socialism and democracy came to be seen as positive utopian alternatives to the dictatorship.

Dilma Rousseff
Dilma Rousseff (Jonas Pereira)

The PT's principle bases came from trade unions (urban and rural), neighborhood organizations, and Comunidades Eclesiais de Base (CEBs)--inclusive Christian communities connected to the Catholic Church and influenced by liberation theology. But it also came to include new social movements that were gaining strength in struggles by Afro-Brazilians and women, as well as in new arenas such as the environment, community participation, etc. Since the PT grew out of different organizations, it has always been a party that contained contending tendencies or currents, ranging from revolutionary to reformist; however, these forces existed within the same party.

The 1989 elections (the first free elections after 21years of a civilian-military dictatorship) were extremely important, as they symbolized the unification of the left behind the figure of Luiz Inácio "Lula" da Silva, a former industrial worker and union organizer.

This unification was reflected in the fight to impeach center-right president Fernando Collor de Mello in 1992 on corruption charges. Collor had defeated Lula in a runoff in the 1989 elections, 53 to 47 percent. The left also came together in other struggles such as the fight against the Free Trade Area of the Americas (FTAA) and for South American economic and political integration.

As time passed, the goals of the Brazilian left became mixed up with the PT's electoral platform with the aim of Lula winning the presidency unifying left-wing forces during election periods. In this manner, those favoring electoral objectives became the majority political current within the party, with Lula and José Dirceu (Lula's former presidential chief of staff, forced to resign in the face of corruption charges) as its leaders.

The party's strategy essentially became to elect Lula, a project which guided all of its actions. Some of the more radical groups inside the PT resigned in 1994 in opposition the party's electoral turn, forming the Trotskyist Unified Socialist Workers Party (PSTU).

Later, after Lula won the presidency in 2002 (but refused to break with neoliberal economic orthodoxy), another group left in 2005 to found the Party for Socialism and Liberty (PSOL).

AFTER SEVERAL failed campaigns, Lula was twice elected president of Brazil, in 2002 and 2006, and his handpicked successor, Dilma Rousseff (who herself was tortured by the military dictatorship) won again for the PT in 2010 and 2014. During that time, the party was credited with important reforms, such as the Bolsa Família (subsidies provided to the poorest families) as well as a booming economy and low unemployment.

How were these gains achieved? And can you explain some of their limits in the overall context of South America's so-called Pink Tide?

THE SOCIAL policies of the PT governments were indeed significant. In addition to income transfer programs such as Bolsa Família, the increase in the minimum wage was very important and, as inflation remained more or less under control for some years, led to increased consumption. Moreover, there were other important programs that broke with some aspects of corporate logic, such as the More Doctors (Mais Médicos) program that sent Brazilian and international medical personnel to work in the poorest interior regions of the country where Brazilian doctors had not typically wanted to practice. With regard to universities, PT governments expanded access for low-income and black students through quotas and scholarships, while building new campuses and opening up jobs for teachers.

Overall, the PT attempted to balance social policies and income redistribution with orthodox macroeconomic measures; for example, they attempted to increase or preserve the primary government surplus in order to make interest payments on foreign debt. In other words, they sought to combine social policies with those designed to win the confidence of the international markets. In South America, Brazil represented a "moderate" model in contrast to the Venezuelan model.

Out of this, we are faced with a paradoxical situation: The largest financial and commercial groups (such as meat giant JBS, Odebrecht construction, Vale mining, and the Andrade Gutierrez, Queiroz Galvão and OAS conglomerates, as well as big banks such as Itaú and Bradesco) developed close relations with Lula, even if today they clearly favor the parties in opposition to Dilma and the PT.

PT governors aligned themselves with what became known as neo-developmentalism; that is, attempts by the state to spur economic activity. This policy envisioned an alliance between the state and private economic entities at the national level, focusing especially on infrastructure and energy projects. The state not only guaranteed commercial opportunities for business, but also secured subsidized loans with sub-market interest rates for some companies.

The Brazilian Development Bank (BNDES) played this role most prominently as a major credit provider (both for domestic and foreign investments) for large-scale infrastructure projects, extractive industries and agribusiness. Some liberal economists have criticized BNDES' actions during Lula's and Dilma's governments as supposedly artificial interventions in the economy (favoring some commercial groups to the detriment of others), generating a budget deficit in the event of a crisis and for diverting investments.

However, in reality, this was a false dilemma and failed to address deeper questions about basing economic development on extraction and large-scale infrastructure project, both of which bring with them grave social and environmental consequences. In economies like Brazil that become dependent on the extraction of petroleum and other natural resources, we suffer long-lasting social and environmental consequences such as polluted water and land, the destruction of small peasant farming, and the lack of diversified production which only reinforces dependency and vulnerability.

This so-called "neo-extractive" model, adopted by various South American countries, especially Bolivia, Ecuador and Venezuela, means that the state incentivizes extractive industries (petroleum, gas, mining) by providing assistance for large enterprises (or the developing national technology), or by luring foreign investment, providing tax relief, facilitating credits and/or accelerating exploration concessions, all in order to increase state revenues and royalty payments that come alongside increased exports.

Thus, these countries have been able to finance state activities such as social programs, education, etc., based on resources derived from petroleum and mineral exports, and in some cases also through agribusiness exports. Therefore, when the cycle of high commodity prices crashed for Brazil's main export commodities--such as oil, soy, ore, etc.--this led to a significant decline in revenues, carrying dire consequences right across the continent.

Hence, in times of prosperity, it was possible to conclude a "grand bargain" in order to meet the interests of both big business and the working class, mediated principally by president Lula. But, under capitalism, no such pact can be stable. When resources become scarce, someone has to lose out. And it's clear that the business sector doesn't want to pay for the crisis.

SINCE 2014, Brazil's economy has stalled and has now entered a sharp recession. Can you describe the outlines of the current crisis and its impact on ordinary people in Brazil? Has there been a rise in social struggle as layoffs and austerity have sharpened?

THE CURRENT crisis in Brazil has its roots in the global economic crisis that began in 2008. This crisis has been longer and deeper than was expected. Lula even stated that Brazil wasn't going to be affected. However, it has now impacted all the emerging markets.

The relative decline in Chinese growth has hit Brazil's export sectors hard, especially soy and mining. The neoliberals are arguing that the government spent too much money on stimulus and should have retreated after its first round of anti-cyclical measures. But this argument is only used to criticize the government's overall economic policy, calling it "state-ist."

The two main points raised against the Dilma government by big business are as follows: First, Dilma's government improperly used the public banks and reduced interest rates in 2011 to pressure the private banks; and, second, the state intervened to reduce energy prices by 20 percent in 2013 in anticipation of the end of certain drilling concessions. Added to this was a law written before Lula left office guaranteeing the state oil and gas giant Petrobras certain concessions for oil exploration in the pre-salt layer--a geologic formation offshore Brazil with large proven oil reserves.

These direct interventions in the economy upset some foreign multinationals and banks, as well as some multinationals headquartered in Brazil, putting "the market" on heightened alert for any actions taken by the new Dilma government that might be less conciliatory than Lula's had been. A review of the business press at this time points to a wave of "suspicion" regarding the PT government starting during the middle of Dilma's first term in office.

Ratings agencies next lowered Brazil's bond rating, leading to an increase in economic instability. Inflation began to increase (running at approximately 10 percent per year now), undermining increases in the minimum wage and negatively affecting working-class consumption. Meanwhile, unemployment is rising, especially in industry, approaching 9 percent.

All of this added pressure to Dilma's government, generating a political crisis even more dangerous than the economic crisis. The government was forced into a fiscal adjustment, raising the primary account surplus by cutting social spending, thereby adversely impacting the disproportionately working-class people who had elected her.

This represented an enormous contradiction. Dilma suffered a crisis of legitimacy as the social movements and the working classes were being sacrificed for the sake of economic stability. And long-awaited improvements in public health, education, sanitation and transport, which might signal long-term structural change, remained on the back burner.

All this signifies, therefore, the disruption of "pact," as I referred to before, that was based on granting concessions to big business and banks while providing reforms and favorable social policies for the working class.

Now, neither the working class nor big business wants to "pay the piper" (the motto of the Federation of Industries of São Paulo, FIESP, which spearheaded the impeachment campaign) for this crisis. With respect to the workers, there is a lot of resistance, especially in working-class neighborhoods on the outskirts of major cities.

One newly emerging mass movement is the Homeless Workers Movement (MTST) and there are also other expressions of resistance, such as public school student occupations and strikes by construction workers. But these examples remain scattered and have not been able to build a unified working-class movement.

TURNING TO the impeachment crisis, describe the forces behind the impeachment effort and what validity there is, if any, to the charges against Dilma, Lula and other PT leaders?

IN ORDER to understand how we got to the impeachment process, it is necessary to go back to the 2013 demonstrations. Initially, the "June Days" consisted of diffuse and general demands for better public services such as transportation, but also health and education. They also brought to light indignation against corruption, expressing a common dissatisfaction with traditional political instruments such as parties and elections.

Protesters were energized by the World Cup in 2014, when people rose up against the temporary suspension of civil rights, the favoring of big business interests, the excessive spending on "white elephant" stadium construction, and the associated widespread displacement of poor families.

However, in the 2014 elections, parties to the left of PT (the PSOL and PSTU) were not able to win over the youth who had taken to the streets, some minor exceptions aside. On the other hand, the right wing, supported by the mainstream media, steered the June 2013 demonstrations toward something that, in the end, amounted to a diffuse "anti-corruption" and "anti-PT" sentiment.

Right-wing parties gained strength by associating themselves with the most reactionary sections of society, including those with ties to evangelical and Pentecostal churches. With these new allies, topics such as drugs, same-sex marriage and abortion took center state. Based on all this, the big news in the 2014 elections was the emergence of reactionary force associated with these religious groups.

This exposed, on the one hand, a profound conservatism deeply rooted in Brazilian society and, on the other hand, a powerful political force with party cadres and religious figures being elected into public offices. In the Brazilian Congress today, the "rural" bloc (representatives directly linked to agribusiness interests) grew 33 percent, while the conservative evangelical bloc won more than 53 seats in 2014, roughly 10 percent of Congress.

This bears some resemblance with the Tea Party in the U.S., whereby reactionary positions toward women abortion, and homosexuality are combined with ultra-neoliberal economics, supporting the privatization of public services and state companies, as well as decreasing the power of unions.

Thus, Operation Lava Jato (Car Wash), the federal anti-corruption operation under the direction of investigating judge Sérgio Moro, began in the midst of a conservative backlash, both among the parliamentary parties and in the streets.

Lava Jato began by targeting corrupt networks within Petrobras and, initially, served an important purpose. For the first time, we witnessed management from major multinational corporations, such as Odebrecht and some of the banks, including the director of the financial giant BTG Pactual, going to jail! Brazilian construction firms have grown massively over the years, transformed into huge national monopolies during the military-civilian dictatorship when they established international operations in Africa and throughout South America.

These firms extend into the U.S. market (Odebrecht operates a construction business in Miami, New Orleans, Houston, etc.) and they have always operated as cartels, negotiating contract bids among themselves. This has long been the case and did not come about for the first time during the PT governments.

What came to light during the Dilma government was a modus operandi that reproduces itself in other countries like Peru and Angola: campaign financing by corporations, promiscuous relationships between these companies and local and national governments, and special advantages in contracts with big extractive multinational companies such as Vale and Petrobras.

At first, the imprisonment of businessmen and bankers scared the bourgeoisie. As professor Virginia Fontes noted in an interview, the bourgeoisie felt frightened! Therefore, Lava Jato was redirected to become more of more pointedly political investigation, no longer being merely "technical."

So now, combating corruption had a new name: the PT and Lula. The prosecutors wouldn't rest until they managed to produce accusations against Lula. Independently of the merits of such accusations (no doubt, the PT had adhered to the traditional nefarious way of doing politics, exchanging favors, positions, and even money, things that the right had always done), there were many conservative high-profile politicians accused of similar corruption, but so far they have been let off the hook. Why? There is no other explanation except for the goal of wresting control of the government away from the PT.

Some sectors of the bourgeoisie directly supported the impeachment, but others did not and there are certainly tensions. For example, businessmen from the Northeast were reluctant to support the impeachment. On the other hand, São Paulo businesses, represented by FIESP, took the lead in targeting Dilma, possibly in order to head off arrests of certain businessmen. FIESP openly financed the right-wing "social movements" that took the streets in São Paulo (Vem Pra Rua ["Come to the streets"] and Movimento Brasil Livre ["Free Brazil Movement"]). For their part, agribusiness organizations took a bit longer to define their stance, but ended up supporting the impeachment process. However, the banks and the financial sector have not yet publicly supported the impeachment.

It is true that there was a moment when the bourgeoisie was not yet cohesive, there were tensions and factions, but a relative cohesiveness soon coalesced around themes such as the "stabilization" of the country and "resuming economic growth." At this point, the justification for unseating Dilma became "the overall performance" of her government, as argued by former president Fernando Henrique Cardoso of the neoliberal Brazilian Social Democratic Party (PSDB).

In fact, no specific crimes have been proven against Dilma and there is no solid evidence of any corruption charges involving the president, which is supposed to be the legal basis for an impeachment process. Instead, the charges filed against Dilma revolve around the so-called practice of "fiscal pedaling"--a long-standing governmental practice of manipulating money transfers between public banks and institutions in order to make public accounts look better than they actually are. This may be politically suspect, but it has never before been considered a constitutional crime.

That's why I believe this is a coup, because its justification is political, based on a generalized dissatisfaction with the economy, the recession, industrial stagnation, even with Dilma's arrogant and authoritarian manners, but not with a judicially proven crime. This was reflected in the absurd speeches given by anti-PT politicians in Congress during the impeachment vote on the night of April 17. There was no legal basis. It was all based on political opinions.

THE LEFT has responded to the impeachment process with mobilizations around slogans such as #NaoVaiTerGolpe ("There won't be a coup"), #FicaDilma ("Stay, Dilma"), and #ForaTodosEles ("Out with all of them"). How do you assess the impeachment?

AS I said, I believe we are living through a coup. There is a generalized sentiment of confusion regarding the rollback of social, economic, political and civil rights. Many are comparing what is going on now to the situation in 1964 just preceding the U.S.-backed military coup in Brazil.

However, in my opinion, we must situate the current political conjuncture in the regional context of other recent coups in Latin America: Honduras in 2009, Paraguay in 2012, and attempted coups in Venezuela under Chávez during the 2000s.

These coups did not establish classic political dictatorships, as in the 1960s and 1970s. Rather, they instituted a market dictatorship, a "dictatorship of capital," which means a return to "hardcore" neoliberal programs, terminating projects with a more nationalist character (even if these programs are hardly socialist or revolutionary) that, as with the PT in Brazil, sought to make alliances between the state and the bourgeoisie. Such alliances lasted longer in Brazil than in other countries, but they are very fragile and are no longer tenable.

Capitalism does not like democracy--it only tolerates it in small doses (just enough to appease popular demands). True democracy is the main enemy of capital. This is what history teaches us, just as much today as in the 1960 and '70s.

WHAT ARE the differences among current left forces in Brazil outside of the PT regarding their level of support for or criticism of the PT government? How are social movements such as MST and MTST, and trade union organizations such as CUT and [an independent union federation] positioning themselves in regards to the impeachment?

ONE OF Dilma's main problems up until now has been opposition from within her own party. The rank and file of the Workers' Party was very critical of the nomination of neoliberal Joaquim Levy as Minister of Economy. They also openly opposed Dilma's new austerity measures.

It is curious that many still believed in the potential for a "left turn" after Dilma's 2014 victory, even after 12 years of concessions to big capital. The presidential campaign was so polarized that it created expectations that Dilma would lean more strongly to the left when she began her second term. However, exactly the opposite happened: Dilma froze social spending and attempted to begin implementing austerity measures.

The obstruction of Dilma's legislative proposals in Congress led to major political destabilization. Business and financial sectors, which had amassed huge profits in recent years, were no longer being favored, while the left did not see itself represented by the government either. This created a situation of paralysis. The government had lost its grounding.

In reaction to the introduction of the impeachment process in Congress at the end of 2015, the left of the Workers' Party went back to the streets, but did so on the defensive: against impeachment, against austerity, against the attack on social and civil rights. This led to the formation of several new coalitions.

On the one hand, the Frente Brasil Popular (Brazil Popular Front) is a coalition of social mass movements close to PT: MST, CUT, and Movement of People Affected by Dams (MAB). On the other hand, mobilizations that were more independent of the government also took place against the impeachment (but also against the government's austerity measures), although they were a bit fragmented.

With respect to the formal left-wing political parties, the PSOL has played a key opposition role against the impeachment inside Congress. While PSOL has only six deputies, each of them have been very active in terms of defending human rights and democracy, criticizing neoliberal policies, and promoting innovative policy proposals.

PSTU, and in particular Conlutas, decided not to support the Dilma government, but it also refused to support the impeachment process. Additionally, Conlutas played an important role in supporting the occupation of public schools in São Paulo. However, they do not have elected representatives in Congress and they did not join with other left-wing forces in the attempt to prevent the impeachment.

It is important to note that, as the PT has succumbed to the most disgusting methods of doing politics, it has unfortunately contributed to a diffuse and generalized rejection of politics, parties and democracy. A disastrous consequence of this process is the emergence of reactionary conservatism among significant sections of the Brazilian people rather than the rise of new projects pointing to left-wing solutions.

This is our greatest challenge now: to rebuild a popular project that can bring together, with a unified agenda, forces that today are fragmented. When the Brazilian people took to the streets in 2013, the right wing captured many of the demands for itself. Left social forces and parties were not able to channel and direct the mobilizations toward a cohesive movement for radical democracy and transformation of society.

Many hope Lula will be a candidate again in 2018, and that the left might unite again around his presidential bid. Perhaps this will really happen, but in my opinion, it is likely to fail.

We must now focus on how to reunite the agenda of Brazil's left forces in a post-PT government era. This agenda must be based on social struggles, by men and women from rural areas and the Amazonian forests, from cities and populations affected and displaced by mega-developments, and from the classes rendered "invisible" by national "development" projects championed by PT governments. This social struggle is going to be difficult, and it must go beyond formal political institutions.

Translated from the original Portuguese by Todd Chretien and Bruno Ruviaro.

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