Brazil’s problems cannot be solved merely by a change at the top. Even with Dilma Rousseff out as President, the road ahead for Brazil won’t be easy. She leaves behind an economy in its second straight year of recession, an unemployment rate of nearly 11% and a multimillion-dollar looming statewide corruption scandal that leaves almost no politician unscathed. Here’s a deeper look at the major obstacles ahead for the world’s ninth largest economy:
New president, inherits problems Rousseff faced…
By conservative estimates, new President Michel Temer inherits about $72.5 billion, or 250 billion Brazilian real, debt, Sen. Waldemir Moka said. As Brazil continues to wade through the longest recession since the 1930s, its once burgeoning middle class is feeling the pinch. More than 11.6 million people in Brazil are unemployed, or about 11%, between April and June. There are signs the market is picking back up since Temer took office in May, but it has a lot of ground to cover.
In the last year, Brazil’s economy fell 3.8%, though there are signs the market is picking back up since Temer took office. Brazil’s currency has rebounded slightly against the dollar. Pro-business Temer and his team of economists have won over Wall Street, but we’ll have to see how he juggles spending cuts on pensions and welfare, signature leftist policies from his predecessors.
“This is a moment of hope, to rebuild trust in Brazil. Uncertainty has come to an end. It’s time to unify the country,” Temer said after Rousseff’s impeachment.
New President hasn’t had the greatest track record…
Temer, who was once Rousseff’s deputy but is not from her party, was sworn in to finish out her term, through the next general election in 2018. While many Brazilians were in favor of Rousseff’s impeachment, they aren’t exactly fans of Temer, whose party is also ensnared in corruption charges. According to polls in April, many Brazilians favor a new election altogether and want Temer impeached, too.
In his debut as interim President, he cut his Cabinet down to cut costs but was criticized for ending up with a new leadership team made up entirely of white men. The last time this happened was in 1979, when Brazil was ruled by a military dictatorship. One politician who voted for Rousseff’s impeachment called him a “vampire” and “virus.” With the world watching, Temer was booed at the Opening Ceremony at the Rio Olympics. Although he has the support of foreign investors, his slim popularity will be challenged as he pushes for austerity and privatization measures to fix the economy.
Fallout from corruption scandal is just unfolding..
More than 100 people have been arrested in the last two years, accused of involvement in an estimated $3 billion scheme in which politicians are accused of taking kickbacks from state-run oil company Petrobras. Rousseff, who once chaired Petrobras, was not personally investigated and has repeatedly denied involvement. She has accused her critics of having done far worse.
Charges against Rousseff’s mentor, former President Luiz Inácio Lula da Silva, appear to be ramping up. Although he hasn’t been officially charged, federal police recommended charging him of accepting kickbacks for lucrative construction contracts.
Members from Temer’s Brazilian Democratic Movement party have also been charged in the investigation. In an interview with CNN, he denied wrongdoing but acknowledged that as President, he could face impeachment. “I am aware that if I do become the President, I, too, could be processed for any political wrongdoing,” he said.
What’s next for Rousseff?
Although lawmakers convicted Rousseff of corruption, they failed to pass a motion banning her from political office. Rousseff can never be President again, but she could give it a run in the lower offices. She left office fighting for her political life until the end, repeatedly calling the trial a coup, and effectively bringing an end to 13 years of the Worker’s Party in power.
“When Brazil or when a President is impeached for a crime that they have not committed,” she said, “the name we have for this in democracy — it’s not an impeachment, it is a coup.”