Michel Temer (third from the left) in his swearing-in ceremony in the Senate shortly after Dilma Rousseff was impeached. Credit: Beto Barata/PR

By Mario Osava
RIO DE JANEIRO, Sep 1 2016 (IPS)

The dismissal of now ex-president Dilma Rousseff brings to a close a turbulent chapter of Brazil’s crisis, but does nothing to clear up the doubts that threaten the political system and the economy of Latin America’s powerhouse.

The Senate voted 61-20 on Wednesday Aug. 31 to impeach Brazil’s first female president for budget irregularities, putting an end to 13 years of rule by her left-wing Workers’ Party (PT).

She had been in office since 2011, and was suspended in May, less than halfway through her second term.Her predecessor was the PT’s founder Luiz Inácio Lula da Silva (2003-2011).

Michel Temer, who was Rousseff’s vice president and served as interim president since May 12, was sworn in on Wednesday as the country’s new leader. He will face challenges that require unpopular measures.

A large part of the lawmakers belonging to the parties that back him are facing corruption charges or are under investigation by the public prosecutor’s office.

Temer, described as uncharismatic and dour, has been implicated in a corruption probe, accused of soliciting illicit funds for election campaigns of members of his Brazilian Democratic Movement Party (PMDB).

The president and members of the legislature can only be tried by the Supreme Court and it is unlikely to hand down a sentence against Temer before the end of the current four-year term.

Temer is also facing a legal challenge from the TSE electoral court for alleged abuse of economic and political power while in office as Rousseff’s vice president. Reports of corruption aggravated things for both Rousseff and Temer.

The TSE ruling is not expected until 2017, and could annul the results of the 2014 elections. If that happens, Congress will choose a new president, to complete the current term, which ends the last day of 2018.

Operation Car Wash, which is investigating corruption in the state-run oil giant Petrobras and has led to charges against dozens of businesspersons and politicians, threatens to bring down a number of lawmakers when the Supreme Court starts to try the implicated legislators.

Until then, the accusations will throw a shadow over the legitimacy of a weak government subjected to bombardment from the left-wing opposition, which accuses it of being the result of a “parliamentary coup”, as Rousseff repeated over and over again during her impeachment trial.

The new government has announced fiscal adjustments, including a constitutional amendment to limit public spending growth for up to 20 years, which would oblige the government to limit annual spending growth to the prior year’s inflation rate.

Dilma Rousseff smiles during her speech in Brasilia on Aug. 31, after she was ousted as president of Brazil by the Senate, an outcome that came as no surprise, although unexpectedly she was not banned from politics. Credit: Lula Marques/ AGPTl

That means economic growth, once Brazil has emerged from the current recession, would be accompanied by a reduction of the deficit.

But analysts doubt that the measure will be approved by a Congress traditionally opposed to austerity measures, especially given the fact that it would require a constitutional amendment, which would need a 60 percent majority to be approved.

Another measure considered indispensable to shore up public accounts, raising the retirement age, will also face heavy resistance in Congress and from trade unions and social movements.

Temer, however, has the support of a parliamentary majority strengthened by their victory in the impeachment trial and the vote of confidence they enjoy, for now at least, from the powerful business community.

On Apr. 17,71.5 percent of the 513 members of the lower house voted in favour of an impeachment trial; 75 percent of the Senate approved her ouster on Aug. 31; and similar majorities were seen in other votes prior to the start of the impeachment process.

Ousted but not banned

The bloc was only divided towards the end of the impeachment trial, when the Senate decided not to ban her from politics for eight years, which would have required a two-thirds majority – 54 senators – but only took 42 votes. The measure would basically have ended the political career of the 68-year-old Rousseff.

It was a conciliatory gesture offered by a portion of the new ruling parties, especially the PMDB, after the escalating attacks during the impeachment process, which began in December when the then speaker of the lower house of Congress Eduardo Cunhagave the go-ahead to the proceedings after accepting one of 37 motions to impeach her.

During the final six-day impeachment trial, Rousseff and her supporters described the process as “a coup against democracy,” “betrayal” and a “farce”, and called advocates of the proceedings “demagogues,” “irresponsible,” “liars,” and “corrupt” generators of “economic chaos”.

Rousseff argued that she did not commit any crime.But the prosecution maintained that using state bank funds to conceal a looming deficit and increasing public spending without authorisation from the legislature amounted to “crimes of responsibility”, one of the grounds for impeachment under the constitution.

Even legal experts expressed views that fed the argument that the impeachment was a “coup”, with some observers going so far as to compare it to the 1964 military coup d’etat that ushered in a 21-year dictatorship.

But the economic crisis, especially the huge public deficit that has built up over the last few years, weakened Rousseff, who was accused of concealing the serious financial situation during her 2014 reelection campaign.

Rousseff blamed the recession that began in 2014 on the crash in international commodity prices and policies adopted by rich countries, aggravated by the legislative boycott of her proposed initiatives in 2015.

Only voters can decide on the legitimacy of a government in a presidentialist regime, argued Rousseff and her allies, ruling out the possibility of impeachment, which was first used in 1992 to remove Fernando Collor (1990-1992) and attempted many times against Fernando Henrique Cardoso (1995-2003).

The fall of Rousseff and the PT “is part of a global decline of the left, which is stronger in Latin America, where governments are facing severe economic recessions,” University of Brasilia Professor Elimar Nascimento told IPS.

In the region, he said, “leftist thinking, which lives on fantasies of the past, and is incapable of comprehending change, is showing a lot of wear and tear” – part of a pendular movement after 15 years of mainly left-wing governments in the region.

Modern office buildings and stores, all empty, are among the “white elephants” in the city of Itaboraí, near Rio de Janeiro, left by an aborted petrochemical and oil refinery complex in southeast Brazil. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO , Aug 3 2016 (IPS)

An era of mega-events and mega-projects is coming to a close in Brazil with the Olympic Games to be hosted Aug. 5-21 by Rio de Janeiro. But the country’s taste for massive construction undertakings helped fuel the economic and political crisis that has it in its grip.

It is no mere coincidence that President Dilma Rousseff, suspended during her ongoing impeachment trial over charges of breaking budgetary regulations, will face the final vote in the Senate this same month.

Over the past decade, large-scale investment projects and public works, some not yet finished, others even abandoned, have driven the economy, triggered controversies, and fed the dreams and frustrations of Brazilians, mirroring and accelerating the rise and fall from power of the left-wing Workers’ Party (PT).

The country’s economic growth and the international prestige of then-president Luiz Inácio Lula da Silva (2003-2011) played a decisive role in the 2007 choice of Brazil as host of the 2014 FIFA World Cup.

Two years later, Rio de Janeiro was selected as the venue for the 2016 Olympic Games.

In 2007 Rio hosted the Pan American Games, which kicked off the string of sports mega-events in Brazil, including the FIFA Confederations Cup in 2013.

The wave of mega-infrastructure projects also began at the same time, in response to the needs of the energy and transportation industries, mainly for the export of mining and agricultural commodities.

Large hydropower dams, railways, ports, the paving of roads and the diversion of the São Francisco River to ease drought in the arid Northeast, as well as numerous public works in cities, formed part of the Growth Acceleration Programme (PAC), which included tax breaks and credit facilities.

Rousseff, who also belongs to the PT, succeeded Lula in the presidency after an election campaign in which she was referred to as “the mother of PAC” – an allusion to her skill in implementing and managing the programme that involved thousands of construction projects around the country, as Lula’s chief of staff.

In the oil industry, the 2006 discovery of enormous offshore petroleum deposits below a two-kilometre thick salt layer under rock, sand and deep water in the Atlantic prompted the launch of another major wave of construction, including four large refineries, two petrochemical complexes, and dozens of shipyards to produce oil drilling rigs, offshore platforms and tankers.

The two biggest refineries, in the Northeast, were cancelled in 2015, resulting in some 800 million dollars in losses. Another is partially operating.

Work on the last one – and on the petrochemical complex of which it forms part, near Rio de Janeiro – was interrupted, leaving empty a number of office buildings and hotels that were built in surrounding towns and cities to service an industrial boom and prosperity that never arrived.

The Belo Monte hydroelectric plant’s turbine room in the northern Brazilian state of Pará, under construction in 2015. The mega-project is to be finished in 2019. Credit: Mario Osava/IPS

Most of the shipyards went under or shrunk to a minimum. In Niterói, Rio de Janeiro’s sister city, half of the 10 shipyards closed and over 80 percent of their 15,000 workers were laid off.

Possibly the house of cards of this fast-track development would have come tumbling down regardless, but several destructive factors compounded the problem and accelerated the approach of the disaster.

Oil prices plunged in 2014, simultaneously with the outbreak of the Petrobras bribery scandal that has ensnared hundreds of legislators and business executives.

In addition, the governments of Lula and Rousseff attempted to curb inflation by blocking domestic fuel price increases – another blow to the finances of Petrobras, the state oil company, which almost collapsed under the weight of so many difficulties.

The railways did not fare any better. Construction of two railroads – one private and another public – designed to cross the impoverished but fast-growing Northeast at different latitudes ground to a halt and are candidates to become white elephants due to the suspension of mining industry projects, whose output they were to transport.

As a result, the construction of a new seaport and the expansion of two others were also suspended. 

At least the hydroelectric plants are in the process of being completed. But they are suffering the ups and downs of the power industry. There are delays in the installation of power lines and electricity consumption has slumped as a result of the economic recession that broke out in 2014, expanding spare capacity and driving up losses in power generation and distribution plants.

The four largest hydropower plants, built on fragile rivers in the Amazon rainforest, are facing accusations of causing environmental damage and violating the rights of local populations: indigenous people, riverbank dwellers and fishing communities.

Belo Monte, the world’s third-largest hydroelectric dam, with a capacity to generate 11,233 MW, was accused of “ethnocidal actions” against indigenous people by the public prosecutor’s office and is facing 23 lawsuits on charges of failing to live up to legal requirements.

At the same time, it is also criticised by proponents of hydropower, because it will generate, on average, only 40 percent of its potential. With a relatively small reservoir, an alternative that was chosen to reduce the environmental impact, it will be at the mercy of the marked seasonal variations in water flow in the Xingú River, where the flow is 20 times lower in the dry season than the rainy season.

Roads have not formed part of the recent wave of mega-projects. Although they are being paved and widened, they were originally built in earlier waves of construction projects, in the 1950s and 1970s.

Brazil’s addiction to massive construction projects was probably born with the emergence of Brasilia, built in a remote, inhospitable location over 1,500 km from the biggest cities, São Paulo and Rio de Janeiro, in just five years, during the administration of Juscelino Kubitschek (1956-1961).

This bold feat was completed with the construction of roads running from the new capital in all directions.

But these long roads that cut across the country didn’t become paved highways, with proper bridges, until decades later.

Seen as a success story, Brasilia has prompted politicians to seek to make their mark with major construction projects, although the city was only part of the broader plan of Kubitschek, who pushed forward the development of Brazil’s steel industry by spurring the growth of the automotive industry.

The widespread belief that Brasilia was the big driver of settlement and development of the west and north of the country ignores the role played by the expansion of agriculture.

The 1964-1985 military dictatorship later fed the ambition of turning Brazil into a great power, with a nuclear programme that took three decades to build two power plants, the construction of two of the world’s five biggest hydroelectric plants, and roads to settle the Amazon.

The Trans-Amazonian highway, which was designed to cut across northern Brazil to the Colombian border but is incomplete and impassable for large stretches during the rainy season, is a symbol of failed lavish projects that helped bring down the dictatorship.

The origins of the megalomania can also be traced to the 1950 FIFA World Cup, for which the Maracana Stadium was built in Rio de Janeiro – for decades the largest in the world – holding held up to 180,000 spectators back then, more than double its current capacity.

The historic defeat that Brazil suffered at the hands of Uruguay in the final match in 1950, a devastating blow never forgotten by Brazilians, did not keep this country from hosting the 2014 World Cup, building new stadiums to suffer yet another shattering defeat, this time to Germany, which beat them 7-1 in the semi-finals.

Now, in the grip of an economic crisis expected to last for years, Brazil is unlikely to embark on new megaprojects. And the hope that they can drive development will have been dampened after so many failed projects and the heavy environmental, social and economic criticism and resistance.

“I never thought I’d have to fight against a coup d’etat in Brazil again,” said Dilma Rousseff after she was suspended as president on Thursday May 12, before embracing former president Luiz Inácio Lula da Silva outside the government palace. Credit: Ricardo Stuckert/Lula Institute

By Mario Osava
RIO DE JANEIRO, May 12 2016 (IPS)

Ironically, the only two economists who have served as president of Brazil are also the only ones impeached for economic failures.

Dilma Rousseff, in office since January 2011, was suspended by a vote of 55 to 22 in the Senate on the morning of Thursday, May 12 after a marathon 21-hour session.

The impeachment trial may take up to180 days, during which time Vice President Michel Temer will assume the presidency.

If at least 54 of the 81 senators – a two-thirds majority – vote to remove Rousseff at the end of the trial, Temer will serve as president until Jan. 1, 2019.The impeachment trial is political; the president will be removed if two-thirds of the senators decide that there are grounds for such a move, independently of strictly legal arguments.

Analysts agree that it is highly unlikely that Rousseff, of the left-wing Workers’ Party (PT), will return to power, after the overwhelming defeats she has suffered – first in the Chamber of Deputies, where 71.5 percent of the lawmakers gave the green light to the impeachment proceedings, and now in the Senate.

The most likely scenario is a repeat of the case of Fernando Collor de Mello, elected president in 1989 and impeached in 1992, after a four-month trial.

But there are many differences between the two cases.

Rousseff is not accused of corruption, but of using creative accounting to hide large budget deficits. And she still has the firm support of a significant minority made up of left-wing parties and social movements capable of mobilising huge public protests.

By contrast, Collor de Mello was completely isolated, supported only by a tiny party created to formalise his candidacy. His impeachment was the result of a virtual consensus.

But there are also similarities. Both economists lost their political base due to reckless management of the economy.

When he took office, Collor de Mello immediately froze people’s bank accounts, to curb hyperinflation, releasing only small amounts for essential household expenses.

In 1990, GDP fell 4.3 percent, while unemployment soared and companies went under. The popularity of Brazil’s youngest president, who was 40 when he took office, took a nosedive. And when a corruption scandal broke out two years later, the conditions for impeachment were in place.

In the case of Rousseff, the decline of the economy took longer. Starting at the end of her first term (2011-2014), the recession turned into full-blown depression, with a 3.8 percent drop in GDP in 2015 and a continued downturn in 2016.

Consumption subsidies, tax cuts to give certain sectors a boost, and artificial caps on fuel and electricity prices are among the anti-inflationary or pro-growth measures that led to disaster, especially in the fiscal area.

Michel Temer signs the official Senate notification of Dilma Rousseff’s suspension, which made him interim president, on Thursday May 12. Credit: Marcos Corrêa/VPR

Another thing Collor de Mello and Rousseff have in common is that they misled voters in their campaigns.

Collor de Mello was elected in 1989 after accusing his opponent, trade union leader Luiz Inácio Lula da Silva of the PT (who was finally elected president in 2003) of preparing to freeze bank accounts – the very measure that Collor de Mello himself adopted on his first day in office.

Rousseff accused her opponents, during her 2014 reelection campaign, of seeking a fiscal adjustment that she herself tried to push through in her second term. And she hid the scope of the government’s deficit problem and announced an expansion of social programmes that was not economically feasible, due to a lack of funds.

These errors helped spawn the movement for her impeachment, the mayor of São Paulo, Fernando Haddad of the PT, acknowledged in a May 6 interview.

The economic crisis was then compounded by the corruption scandal involving the state-run oil company Petrobras. More than 200 members of the business community and politicians have been implicated, including former president Lula and other PT leaders, which has smeared the image of the government, even though Rousseff herself is in the clear.

This backdrop strengthened allegations that Rousseff violated fiscal responsibility laws by signing decrees increasing public spending without authorisation and by obtaining loans to the federal government from state-owned banks, which is illegal.

These two measures would amount to “crimes of responsibility”, which according to the constitution provide grounds for impeachment. And they allegedly aggravated the fiscal deficit, the key factor in the economic crisis.

Attorney General José Eduardo Cardozo, who represented Rousseff, and ruling coalition legislators rejected the accusations, arguing that the government decrees merely redistributed funds to other areas and that the government’s delayed payments to the state banks did not constitute illegal loans.

A group of weary senators applaud at the end of the marathon session that decided to immediately suspend President Dilma Rousseff during an impeachment trial for her removal. Credit: Marcos Oliveira/Agência Senado

Dozens of mayors and state governors, as well as former presidents, have used the same accounting maneuvers without being punished in any way, said Senator Otto Alencar of the Social Democratic Party, a majority of whose members voted against Rousseff.

Whatever the case, the trial is political; the president will be removed if two-thirds of the senators decide that there are grounds for such a move, independently of strictly legal arguments.

In the all-night session, the 78 senators (only three were absent) heard 73 speakers who had up to 15 minutes each to speak before the vote.

The result, which was already a given, was a crucial indicator for the opposition: They managed to achieve the two-thirds majority needed to find the president guilty.

However, it is possible that some senators who gave the go-ahead to the impeachment trial will change their position.

At least three senators qualified their votes, clarifying that they were only approving the trial itself because they wanted more in-depth investigations and discussions on presidential responsibility, and that they had not yet decided to vote for Rousseff’s removal.

They included former footballer Romario Faria, a senator for Rio de Janeiro, and Cristovam Buarque, a former governor of Brasilia. They belong to two different socialist parties.

PT senators said there would be a fight, as well as mobilisations to block the “unfair” impeachment. And Rousseff reiterated that she would “fight to the last” against what she called “a coup.”

The vice-president’s rise to president means a heavy concentration of power in the hands of the centrist Brazilian Democratic Movement Party (PMDB), which has the largest number of mayors, many state governors, the post of president of the Senate, and now the presidency (interim, for now).

A group of six senators from different parties called for an alternative to the “traumatic” impeachment process: early elections to allow the people to choose their leaders.

Many senators, such as Tasso Jereissati of the opposition Brazilian Social Democracy Party (PSDB) and Collor de Mello called for political reform, arguing that “coalition presidentialism” has proven to be the source of crisis and instability.

Rousseff’s impeachment also provides an opportunity to debate reforms in the political system.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

Brazilian President Dilma Rousseff, her back to the camera, receives a hug on Monday Apr. 18 by one of the minority of lower house legislators who voted against her impeachment the day before. Credit: Roberto Stuckert/PR

By Mario Osava
RIO DE JANEIRO, Apr 18 2016 (IPS)

Brazilian President Dilma Rousseff would appear to be, as she herself recently said, “a card out of the deck” of those in power, after the crushing defeat she suffered Sunday Apr. 17 in the lower house of Congress, which voted to impeach her. But Brazil’s political crisis is so complex that the final outcome is not a given.

A total of 367 legislators – 71.5 percent, or 25 more than the two-thirds majority needed – voted to impeach her and she now faces a vote in the Senate. Because the makeup of the Senate is similar to that of the Chamber of Deputies, the president’s fate is apparently sealed.

However, the climate of tension in Brazil has brought new surprises almost every week since last year. And the impeachment trial could drag on for over six months, passing through different stages and procedures, under the shadow of storms like the corruption scandal that threatens more than 300 politicians.

The Senate will have about three weeks to decide whether to go ahead with putting the left-wing president on trial for alleged irregularities in last year’s federal budget.

Since the decision only requires a simple majority of 41 out of 81 senators, the assumption is that the impeachment will move forward. The vote will be based on an assessment of the case by a special 21-senator commission that will have 10 working days to turn in its report.

In the next few weeks, Rousseff – whose first term started on Jan. 1, 2011 – will remain in the presidency. But she will have to step aside for 180 days if the Senate votes in favour of a formal impeachment trial. After that, another special commission will investigate, listen to the defence, and draw up a proposal to find her guilty or absolve her.

The trial by the 81 senators would be presided over by the president of the Supreme Court.

Rousseff would be banned from public office for eight years if two-thirds of the senators – 54 – found her guilty. She would be acquitted if she managed to obtain 28 votes in favour, including abstentions and absences.

There are multiple factors that could modify the script as well as the final outcome.

Demonstrators supporting the removal of Brazilian President Dilma Rousseff celebrate Sunday Apr. 17 outside the lower house of Congress in Brasilia after it voted to impeach her. “Tchau, querida” (Bye-bye dear) reads one of the signs. Credit: Fábio Rodrigues Pozzebom/ Agência Brasil

The lawmakers pushing for impeachment, who will take power if Rousseff is removed, have all been implicated by the Operação Lava Jato or Operation Car Wash investigation into corruption and could lose their seats as a result of a trial in the Supreme Court, where sitting politicians are tried.

Facing the greatest threat is the speaker of the lower house, Eduardo Cunha, who played a decisive role by speeding things up in the initial phase of the proceedings against Rousseff.

But that role has generated resistance against the impeachment. Cunha, accused of taking millions of dollars in bribes to secure contracts with state oil giant Petrobras, and reported to have illegal bank accounts in Switzerland, is seen as the biggest symbol of corruption, even by some of those who back the president’s removal.

Many members of the Chamber of Deputies took advantage of the moment to accuse Cunha of being a thief or corrupt, when they announced their vote on Sunday. Even some of those who voted in favour of impeachment made an attempt to mark their distance from the speaker of the house.

Deputy Jarbas Vasconcelos, for example, accused Cunha of “casting a stain over” the proceedings and the lower house.

Both of them belong to the Brazilian Democratic Movement Party (PMDB), an ally of the government until last month. If Rousseff is suspended, the party will lead the government and both houses of Congress.

Vice-president Michel Temer, who will become president if Rousseff – reelected to her second term in October 2014 – is impeached, and the president of the Senate, Renán Calheiros, have been signaled as benefiting from the corruption orchestrated by Petrobras, as they both agreed to cooperate with the justice system in exchange for a reduction in any eventual sentence.

The charges and the information provided in the investigation will tend to focus on these three politicians – the vice president and the heads of the Chamber of Deputies and the Senate – as they are in line to replace the president.

Rousseff’s supporters stress that she is an exception among the leading protagonists in this battle for power, as the only one who is not facing corruption charges.

Supporters of Brazilian President Dilma Rousseff displayed intense disappointment on Sunday Apr. 17 outside the lower house of Congress in Brasilia as the voting reflected an overwhelming majority in favour of impeachment. Credit: Fábio Rodrigues Pozzebom/ Agência Brasil

However, she is isolated now because the left-wing ruling Workers Party’s (PT) image has been battered by accusations that it has diverted public funds since it first came to power in 2003 under former president Luiz Inácio Lula da Silva.

New charges and lines of investigation by Operation Car Wash, led by the public prosecutor’s office and the federal police, could modify the political landscape, as has happened in the last few months when it investigated favours allegedly received by Lula from leading construction companies that have carried out large-scale oil industry and hydropower projects.

Another source of uncertainty is the current Superior Electoral Court investigation into the 2014 campaign funds that could invalidate the victory by Rousseff and Temer due to the alleged use of illegal donations coming from bribes from Petrobras contractor companies.

If the 2014 elections outcome is challenged, new elections will be held. But experts believe that this ruling will not come until 2017, and in that case it would be Congress that would elect the new president and vice president who would complete the current term until 2018.

The economic crisis, meanwhile, is only expected to get worse, because an interim government would find it hard to adopt the unpopular measures that economists, and Temer himself, see as indispensable for fighting the recession, such as a fiscal adjustment plan.

A truce is also possible, but it would be hard to accommodate the interests of the nearly two dozen parties in the lower house that helped approve the move to impeach Rousseff. The broad majority that was achieved was due to small and medium-sized parties that joined together with the large opposition parties when the president’s defeat began to look likely.

The big fuel for political decisions lately in Brazil has been the prospect of gaining a share of the power.

The corrosion of the new coalition that would take power will be inevitable, due to internal divisions, the recession and subsequent rise in unemployment, new findings by the corruption investigation and demonstrations by Rousseff’s supporters, which will clearly rise in intensity.

The media, which the left accuses of being biased against Rousseff, Lula and the PT, will likely focus their negative news stories on the new holders of power, accentuating the erosion.

The defence of the president, led by Attorney General José Eduardo Cardozo, disparaged the lower house decision on the impeachment, calling it “purely political” and noting that Rousseff is not facing serious accusations but minor charges which, he said, have “absolutely no background or basis.”

Cardozo argued that this is possible in a parliamentary system, but not in Brazil’s presidentialist system. The proceedings have been criticised as unconstitutional, since Rousseff is not accused of any concrete crime, and a president can’t be impeached only for political reasons, he argued.

These arguments are not likely to modify the Senate’s eventual decision, given the president’s isolation, but they could strengthen the movement against her removal.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

Brazilian President Dilma Rousseff next to advisers with worried faces, after addressing the media, shortly after the announcement of the impeachment trial. Credit: Lula Marques/ Agência PT

By Mario Osava
RIO DE JANEIRO, Dec 3 2015 (IPS)

The aim to impeach President Dilma Rousseff is no longer merely a threat that was poisoning politics in Brazil. Now it may be a traumatic battle, but in the light of day.

On Wednesday, Dec. 2 the speaker of the lower house, Eduardo Cunha, gave the go-ahead to impeachment proceedings to remove Rousseff from office. The motion was introduced by three jurists, including Helio Bicudo, a co-founder of the governing Workers Party (PT), and Miguel Reale Junior, a former justice minister.

Cunha announced his decision shortly after it came out that the PT would vote against him in the lower house ethics council, which is investigating the money he has in Swiss bank accounts, presumably the product of graft and embezzlement in the state oil company, Petrobras – a scandal that has already affected 170 politicians and businesspersons.“The game has changed, there is another chess board now, with some light shining, after months of uncertainty. An impeachment process triggers radical positions not only in Congress, but in society at large. But the hope is that the game will be more transparent, with all the cards out on the table.” -- Fernando Lattman-Weltman

This confirms what the media has been commenting on, but which has not been publicly acknowledged by those involved: that there was a tacit agreement between the presidency and Cunha, which previously stood in the way of legal proceedings that could lead to the removal of Rousseff and Cunha.

Behind the “embrace” between the president and the speaker, both of whom faced the threat of legal action, was Cunha’s opposition to the government, even though he is a member of the Brazilian Democratic Movement Party, the PT’s chief ally in the governing coalition.

The PT has three seats in the 21-member ethics council. Its votes are considered decisive in the case of Cunha, who as speaker of the lower house has the authority to accept or dismiss requests for impeachment of the president.

The three PT members on the council opted to align themselves with the leadership of their party and with public opinion, which is overwhelmingly opposed to Cunha, resisting the pressure from the presidency, which is more concerned about keeping the president in office and cobbling together enough votes to push through the legislative measures needed to help the economy recover from the current crisis.

“The game has changed, there is another chess board now, with some light shining, after months of uncertainty,” said Fernando Lattman-Weltman, a professor of political science at the Rio de Janeiro State University.

“An impeachment process triggers radical positions not only in Congress, but in society at large,” he told IPS. “But the hope is that the game will be more transparent, with all the cards out on the table.”

The analyst said “Cunha is finished, he won’t survive any longer now that he played his last card; he relinquished the weapon of blackmail” – the impeachment of Rousseff that he had been delaying.

The speaker of the lower house, controversial since he was named in February, has been accused of violating “parliamentary decorum” by lying in March when he testified in the committee investigating the Petrobras corruption scandal, claiming he did not have bank accounts abroad.

But the Swiss attorney general’s office refuted his claim several months later, and sent documents about his accounts to prosecutors in Brazil.

Eduardo Cunha, speaker of the lower house of Congress in Brazil, announcing his decision to allow the impeachment trial to go ahead against President Dilma Rousseff. Credit: Alex Ferreira/Cámara de Diputados

Cunha had already been accused of taking bribes from companies that were rewarded lucrative Petrobras contracts, in the testimony given by four people facing prosecution in the scandal, who decided to cooperate with the justice system, revealing what they knew in order to reduce their possible sentences.

This means it is unlikely that he will hold on to his seat in Congress. He will lose it if the ethics council rules that he violated parliamentary decorum and if a majority of the 513 lawmakers in the lower house vote in favour of that accusation.

But his downfall would take several months.

Moreover, he and dozens of other legislators under investigation could go to prison, but only with authorisation by the Supreme Court – the only legal body that can decide whether members of the executive and legislative branches should be tried.

The impeachment trial against Rousseff is more uncertain, according to Lattman-Weltman. The most likely outcome is that the president “will manage to overcome the challenge, after a tough battle with the opposition, and depending on how society reacts.”

The removal of a president in Brazil requires a two-thirds majority in the lower house to authorise the impeachment trial, which is held by the Senate, where a two-thirds majority is also needed to find the accused guilty.

Brazilian President Dilma Rousseff’s political fate will be decided in the next few months in this emblematic building in Brasilia, the seat of the national Congress. Credit: Brazilian Congress

It is a lengthy process, because it begins in a committee of legislators from all parties, represented in proportion to each party’s number of seats in the house. In this case, Rousseff is accused of violating Brazil’s fiscal responsibility law by signing decrees that increased public spending without authorisation from the legislature. The president denies any wrongdoing.

Impeachment requires that a concrete crime be committed during the president’s current term. But it is a political trial, based on criteria that differ from legal trials. Former president Fernando Collor de Mello was found guilty in 1992 by the Senate, which barred him from holding public office for eight years, even though the Supreme Court failed to find sufficient grounds to convict him for corruption.

One serious effect of the new political dispute is its impact on the economy, in recession since 2014, which many now describe as depression. GDP was 4.5 percentage points lower in the third quarter of this year than in the same period last year. Economists forecast a slight recovery in 2017.

With unemployment standing at 7.9 percent in October against 4.7 percent in the same month in 2014, and annual inflation at 10 percent, Brazil is suffering one of its worst crises in history. The political chaos is making the situation even worse, by standing in the way of the adoption of necessary measures and generating uncertainty that has led to a reduction in investment, consumption and credit.

To make matters worse, there was a threat of a paralysis of government this month, due to failure to meet the budget’s fiscal deficit target. But the government managed to get approval Wednesday to change this year’s fiscal target, allowing it to end the year with a primary deficit of 31 billion dollars, which eased the tension.

Without that it would be necessary to cut all public expenditure, including water and energy in public buildings and travel by the president herself, such as her trip to the swearing-in ceremony of Argentine president-elect Mauricio Macri on Dec. 10.

It was a triumph by the government, which won approval of several economic measures in the last few weeks, after suffering numerous defeats this year, especially in the lower house, where the speaker has a strong influence.

“Cunha’s leadership is hollow, he no longer has power or legitimacy to demand loyalty from his allies,” said Antonio Augusto de Queiroz, director of documentation of the Inter-Parliamentary Advisory Department.

Given the political bickering and the government’s difficulties, legislators “are responding to pressure from society and from economic players, on the argument that the political crisis must not paralyse the country,” he told IPS.

“All politicians are worried” about the scandal unleashed by Operação Lava Jato or Operation Car Wash, the investigation by prosecutors and police of the fraud and corruption scheme designed to embezzle assets from Petrobras, especially since the Nov. 25 arrest of Delcidio do Amaral, the leader of the PT in the Senate.

Recent laws, such as the one to combat organised crime and money laundering, gave “unprecedented power and instruments enabling them to take action” to oversight and law enforcement bodies like the prosecutor’s office, the federal police and the courts of auditors, “combating the culture of secrecy and strengthening transparency,” with positive effects for politics, said Queiroz.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

Excerpt:

By Fernando J. Cardim de Carvalho
RIO DE JANEIRO, Aug 22 2015 (IPS)

As the political situation in Brazil appears to be reaching a state of unstable equilibrium, or more bluntly, as it is transformed from instability to impasse, the economy continues to deteriorate.

The sharpening of political conflicts that could lead to an outright collapse of the economy seems to have been attenuated by the shift on Apr. 7 of effective political power from President Dilma Rousseff to Vice-President Michel Temer.

Fernando Cardim de Carvalho

Temer was successful in bringing Renan Calheiros, the chairman of the Federal Senate, back to the government camp, in a power-sharing agreement meant to isolate the chairman of the House, Eduardo Cunha, who has assumed a much more radical stance. The arrangement has worked so far.

The pressure on the President to resign or on the appropriate bodies to give cause to initiate impeachment processes seems to have reached its limit. Popular opposition to the federal administration, which has its stronghold in Sao Paulo – as shown in mass demonstrations in March and April and most recently on Aug. 16 – has not seen the snowball growth its leaders expected.

In sum, positions seem to have been hardened as a measure of political accommodation has been reached, with the Brazilian Democratic Movement Party (PMDB) taking the lead on the side of government, and the formal opposition to government, including the nominally leading opposition party, the Brazilian Social Democracy Party (PSDB), rallying to the side of Eduardo Cunha, still their best hope on the way to an impeachment procedure.

Street demonstrations at this point seem to be unable to change this picture. Still, it should be noted that only the opposition has been able to organise large demonstrations. Attempts by pro-government groups to do the same in favour of the government have been few and largely unsuccessful.

In this context, as expected, the Brazilian economy continues to deteriorate. The contractionary impact of fiscal retrenchment has been greater than anticipated because not many people can foresee what will come next. In fact, no one can, even if announced measures will in fact be implemented while current difficulties, including fiscal difficulties, grow further.

The federal government was not able to pass the contractionary measures it argued to be essential, thus creating a ‘Catch 22’ situation in which one expects the success of the government to be very bad for the country but its failure to be even worse. Many economists are predicting a fall in 2015 GDP close to two percent, postponing chances of recovery until at least 2017.

“[Brazil] finds itself at an impasse. No political force seems to be strong enough, or even interested in finding a better and more promising alternative policy strategy”
If this contraction actually happens, it will be one the most serious recessions in recent history, much worse than what happened in 2008 and 2009.

The reasons for this are complex and the government is partly correct to point to the worsening of the external scenario. China can no longer carry Brazil forward. The recovery of the U.S. economy is weak and volatile. Europe is unable to overcome its own fossilised views on the virtues of austerity, causing the whole area to limp around.

Of course, this excuse only goes so far. Many analysts had called the attention of government authorities to the fact that growth during President Lula da Silva’s two terms in office (2003-2011) would vanish in the event that China lost its breath, as has actually happened.

The country lost the opportunity to make the investments, particularly in infrastructure, which could have increased its productive capacity. Efficient industrial policies should have been consistently implemented to that end, public investment should have been expanded, and consistent exchange rate policies should have been sought to change the picture of overvaluation that has been killing local manufacturing, on and off, since the Real Plan was implemented in 1994.

Practically nothing of this was effectively done. Investment plans were announced that had no consequence, local manufacturers became importers on an increasing scale, and roads, ports and energy production fell behind needs, while the government presented policies to increase household indebtedness to expand consumption as a successful combination of economic and social policies.

In the last two years of Rousseff’s first term (2011-2014), these policies were not even successful in increasing growth rates and GDP stalled as the government appealed more and more to tricks, particularly accounting tricks, and the distribution of favours to politically-connected sectors to try to revive the economy.

To a large extent, the turn to austerity was motivated by the failure to revive the economy, which doubled the bet on mistaken policies. Austerity measures in a shrinking economy can only accelerate the fall. But the dissolution of the political power of the president tripled the bet.

No one can believe that the president has the power to effectively pursue an alternative policy path. In fact, if the alternative to austerity is going back to what she did in her first term, the president will not find any supporters, except, perhaps, in her fast-shrinking number of hard-core believers.

So the country finds itself at an impasse. No political force seems to be strong enough, or even interested in finding a better and more promising alternative policy strategy. The more radical opponents – the Workers’ Party (PT) and the PSDB – got lost in a ‘blame game’, trying to pin down which of two presidents, Fernando Henrique Cardoso or Lula, had been worse.

None of them seems to have anything to offer. PMDB does not deal in wholesale strategies, it is more interested in retailing. Given the steep loss of trust in the PT or its leaders, including Lula, the party seems to be excluded from any power arrangement to be designed in the near future (its perspectives for the long-term future are at a minimum very uncertain).

The situation of the PSDB is not much better, because all it has in its favour is the receding memory of the Cardoso period, in which much the same problems were as serious as they are now and the party was as incompetent in pointing to solutions as the PT is now.

In this situation, the PMDB stepped in. It reached some measure of political stability but it has no vision of where to take the economy. Given its structure as a federation of state leaderships, the PMDB deals better with favours than with strategies.

As happened under President José Sarney in the late 1980s, this may be enough – in the best of circumstances – to put the brakes on economic deterioration but not to guide its revival.

The country will survive, of course, as it has done in the past.  The problem is that Brazil has experience of unfortunately all too frequent low-quality political leadership, so even the optimistic analysts can only see hardship ahead. (END/COLUMNIST SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Scale model of one of the offshore oil platforms exploiting Brazil’s “presalt” reserves, on exhibit in the research centre of Petrobras, Brazil’s state oil company, in Rio de Janeiro. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, May 18 2015 (IPS)

Megaprojects are high-risk bets. They can shore up the government that brought them to fruition, but they can also ruin its image and undermine its power – and in the case of Brazil the balance is leaning dangerously towards the latter.

As the scandal over kickbacks in the state oil company Petrobras, which broke out in 2014, grows, it is hurting the image of former president Luiz Inácio Lula da Silva (2003-2011) and his successor, President Dilma Rousseff, both of whom belong to the left-wing Workers’ Party (PT).

In its 2014 balance sheet, the company wrote off 6.2 billion reais (2.1 billion dollars) due to alleged graft and another 44.6 billion reais for overvalued assets, including refineries.

But the real magnitude of the losses will never be known. The company lost credibility on an international level, its image has been badly stained, and as a result many of its business plans will be stalled or cancelled.

The numbers involved in the corruption scandal are based on testimony from those accused in the operation codenamed “Lava-jato” (Car Wash) and in investigations by the public prosecutor’s office and the federal police, which indicated that the bribes represented an estimated three percent of Petrobras’ contracts with 27 companies between 2004 and 2012.

The biggest losses can be blamed on poor decision-making, bad planning and mismanagement. But the corruption had stronger repercussions among the population and the consequences are still incalculable.

It will also be difficult to gauge the influence that corruption had on administrative blunders, which are also political, and vice versa.

Two-thirds of the devaluation of the assets was concentrated in Petrobras’ two biggest projects, the Abreu e Lima Refinery in the Northeast, which is almost finished, and the Rio de Janeiro Petrochemical Complex (COMPERJ), both of which began to be built when Lula was president.

Petrobras informed investors that COMPERJ, a 21.6-billion-dollar megaproject, abandoned the petrochemical portion of its activities in 2014 as they were considered unprofitable, after three years of waffling, and was downsized to a refinery to process 165,000 barrels a day of oil.

It will be difficult for Petrobras, now under-capitalised, to invest millions of dollars more to finish the refinery, where the company estimates that the work is 82 percent complete. But failing to finish the project would bring much bigger losses.

Thousands of workers laid off, economic and social depression in Itaboraí, where the complex is located, 60 km from the city of Rio de Janeiro, purchased equipment that is no longer needed, which costs millions of dollars a year to store, and suppliers that have gone broke are some of the effects of the modification and delays in the project.

The Santo Antônio hydroelectric plant on the Madeira river, in the northwest Brazilian state of Rondônia, during its construction in 2010. Credit: Mario Osava/IPS

The Petrobras crisis is also a result of the crash in international oil prices and of years of government fuel subsidies that kept prices artificially low to help control inflation.

It also endangers the naval industry, which expanded to address demand from the oil company.

Shipyards may dismiss as many as 40,000 people if the crisis drags on, according to industry statistics.

The industry was revived in Brazil as a result of orders for drills, rigs and other equipment to enable Petrobras to extract the so-called presalt oil reserves that lie below a two-kilometre- thick salt layer under rock and sand, in deep water in the Atlantic ocean.

The Abreu e Lima Refinery, which can process 230,000 barrels a day, has had better luck because the first stage is already complete and it began to operate in late 2014. But the cost was eight times the original estimate.

One of the reasons for that was the projected partnership with Venezuela’s state oil company, PDVSA, which Lula had agreed with that country’s late president, Hugo Chávez (1999-2013).

PDVSA never made good on its commitment to provide 40 percent of the capital needed to build the plant. But the agreement influenced the design and purchase of equipment suited to processing Venezuela’s heavy crude. The project had to be modified along the way.

Plans to build two other big refineries, in the Northeast states of Ceará and Maranhão, were ruled out by Petrobras as non-cost-effective. But that was after nearly 900,000 dollars had already been invested in purchasing and preparing the terrain.

The disaster in the oil industry has stayed in the headlines because of the scandal and the amounts and sectors involved, which include four refineries, dozens of shipyards and major construction companies that provided services to Petrobras and have been accused of paying bribes.

But many other large energy and logistical infrastructure projects have suffered major delays. These megaprojects mushroomed around the country, impelled by the high economic growth during Lula’s eight years in office and incentives from the government’s Growth Acceleration Programme.

Railways, ports, the expansion and paving of roads and highways, power plants of all kinds, and biofuels – all large-scale projects – put to the test the productive capacity of Brazilians, and especially of the country’s construction firms, which also expanded their activities abroad.

The majority of the projects are several years behind schedule. The diversion of the São Francisco river through the construction of over 700 km of canals, aqueducts, tunnels and pipes, and a number of dams, to increase the supply of water in the semi-arid Northeast, was initially to be completed in 2010, at the end of Lula’s second term.

But while the cost has nearly doubled, it is not even clear that the smaller of the two large canals will be operating by the end of this year, as President Rousseff promised.

Private projects, like the Transnordestina and Oeste-Leste railways, also in the Northeast, have dragged on as well.

Resistance from indigenous communities and some environmental authorities, along with labour strikes and protests – which sometimes involved the destruction of equipment, workers’ housing and installations – aggravated the delays caused by mismanagement and other problems.

The wave of megaprojects that began in the past decade was explained by the lack of investment in infrastructure suffered by Brazil, and Latin America in general, during the two “lost decades” – the 1980s and 1990s.

After 1980, oil refineries were not built in Brazil. The success of ethanol as a substitute for gasoline postponed the need. The country became an exporter of gasoline and importer of diesel fuel, until the skyrocketing number of cars and industrial consumption of fuel made an expansion of refinery capacity urgently necessary.

Nor were major hydropower dams built after 1984, when the country’s two largest plants were inaugurated: Itaipú on the border with Paraguay and Tucuruí in the northern Amazon rainforest.

The energy crisis broke out in 2001, when power rationing measures were put in place for eight months, which hurt the government of Fernando Henrique Cardoso (1995-2003).

The return of economic growth during the Lula administration accentuated the deficiencies and the need to make up for lost time. The wishful thinking that sometimes drives developmentalists led to a mushrooming of megaprojects, with the now known consequences, including, probably, the new escalation of corruption.

Not to mention the political impact on the Rousseff administration and the PT and the risk of instability for Latin America’s giant.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

By Roberto Savio
ROME, Apr 20 2015 (IPS)

This month’s World Economic Outlook released by the International Monetary Fund (IMF) only confirms that consequences of the collapse of the financial system, which started six years ago, are serious. And they are accentuated by the aging of the population, not only in Europe but also in Asia, the slowing of productivity and weak private investment.

Roberto Savio

Average growth before the financial crisis in 2008 was around 2.4 percent. It fell to 1.3 percent between 2008 and 2014 and now the estimates are that it will stabilise at 1.6 percent until 2020, in what economists call the “new normal”. In other words, “normality” is now unemployment, anaemic growth and, obviously, a difficult political climate.

For the emerging countries, the overall picture does not look much better. It is expected that potential growth is expected to decline further, from an average of about 6.5 percent between 2008 and 2014 to 5.2 percent during the period 2015-2020.

The case of China is the best example. Growth is expected to fall from an average 8.3 percent in the last 10 years to somewhere around 6.8 percent. The result is that the Chinese contraction has worsened the balance of exports of raw materials everywhere.

The crisis is especially strong in Latin America, and in Brazil the fall in exports has contributed to worsening the country’s serious crisis and increasing the unpopularity of President Dilma Rousseff, already high because of economic mismanagement and the Petrobras scandal.“Progressive parties were able to build their success during economic expansion but the Left has not developed much economic science on what to do in period of crisis”

This, by the way, opens up a reflection which is fundamental. From Marx to Keynes, redistribution theories were all basically built on stable or expanding economies.

Progressive parties were able to build their success during economic expansion but the Left has not developed much economic science on what to do in period of crisis. What it tends to do is mimic the receipts and proposals from the Right and, when the crisis is over, it has lost its identity and has declined in the eyes of the electorate.

From this perspective, the situation in Europe is exemplary. All those right-wing xenophobic parties which have sprouted up – even in countries long held to be models of democracy such as the Nordic countries – have developed since 2008, the beginning of the financial crisis. In the same period of time, all progressive parties have lost weight and credibility. And now that the IMF sees some improvement in the European economy, it is not the traditional progressive parties that are the beneficiaries.

The term that the IMF gives to the current economic moment is “new mediocrity” – which is a franker way of saying “new normal” – and it observes that in the coming five years, we will face serious problems for public policies like fiscal sustainability and job creation.

In fact, every day, the macroeconomic figures, which have become the best way to hide social realities, are becoming less and less realistic if we go back to microeconomics as we have done during the last 50 years.

The best example is the United Kingdom, which is the champion of liberalism. Each year it has cut public spending and now claims to have growth in employment, with 600,000 new jobs in the last year. The only problem is that if you look into the structure of those jobs, you will find that the large majority are part-time or underpaid, and employment in the public sector is at its lowest since 1999.

A clear indicator is the number of people who visit the food banks created to meet the needs of the indigent. In the world’s sixth largest economy, their numbers have grown from 20,000 before the crisis seven years ago to over one million last year. And the same has happened all over Europe, albeit to a lesser extent in the Nordic countries.

U.K. economists have published studies on how austerity has affected growth. According to the Office for Budgetary Responsibility, established by the U.K. government, austerity blocked economic growth by one percent between 2011 and 2012. But, according to Simon Wren-Lewis of Oxford University, the figure is actually about five percent (or 100 billion pounds).

In other words, fiscal austerity reduces growth, and this creates large deficits which call for more fiscal austerity. It is a trap that Nobel laureate Keynesian economists Joseph Stiglitz and Paul Krugman have described in detail to no avail. We are all following the “liberal order” of Germany, which think its reality should be the norm and that deviations should be punished.

Now, while we can all agree that much of this is obvious to the average citizen in terms of its impact on everyday life, what is important and new is that the IMF, the fiscal guardian which has imposed the Washington Consensus (basically a formula of austerity plus free market at any cost) all over the Third World with tragic results, has woken up to reality.

Don’t get me wrong – I’m not implying that the IMF is becoming a progressive organisation, but there are signs that an important pillar of neoliberal thinking is vacillating.

Of course, those responsible for the global crisis – bankers – have come out with impunity. The world has exacted over three trillion dollars from its citizens to put banks back on their feet. The over 140 billion dollars in fines that banks have paid since the beginning of the crisis is the quantitative measure of illegal and criminal activities.

The United Nations calculates that the financial crisis has created at least 200 million new poor, several hundred millions of unemployed, and many more precarious jobs, especially for young people. And, yet, nobody has paid, while prisons are full of people who are there for minor theft, the social impact of which is infinitesimal by comparison.

In 2014, James Morgan, the boss of Morgan Stanley, cashed in 22.5 million dollars, Lloyd Blanfein, the boss of Goldman Sachs, 24 million, James Dimon, the boss of J.P. Morgan, 20 million. The most exploited of all, Brian Moynihan of the Bank of America, a paltry 13 million. Nobody stops the growth of bankers.

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

By Fernando J. Cardim de Carvalho
RIO DE JANEIRO, Apr 1 2015 (IPS)

Even moderately well-informed analysts knew that the Brazilian economy was in dire straits as President Dilma Rousseff initiated her second term in office in January.

Unlike her predecessor, Luiz Inácio Lula da Silva (2003-2011), Rousseff had not the same luck with the situation of the international economy. But also, unlike Lula, Rousseff showed herself a poor saleswoman for Brazilian goods and an even poorer manager of domestic economic policy.

Fernando Cardim de Carvalho

There was a strong suspicion that economic policy, especially in the last two years of her first term, had been conducted in ad hoc ways and that serious adjustments would be needed to steer the economy back to working condition anyway. Still, the situation seemed to be even worse than most analysts feared.

More surprising, however, is to find out that Brazilian politics is also in dire straits. Caught off guard by the Petrobras corruption scandal, federal authorities, beginning with Rousseff herself, seemed to become paralysed by the rapid fall in public support, completely losing the power of initiative and creating a dangerous political vacuum in the country.

It is a vacuum rather than a political threat because the opposition seems to be as lost as the president. The political right, never very fond of democratic institutions any way, seemed to be more interested in making the president “bleed” – as stated by Senator (and former vice-presidential candidate) Aloysio Nunes Ferreira, of the Brazilian Social Democracy Party – than with fighting for political hegemony.

Economic problems were certainly fostered by the quality of economic policy-making in the second half of Rousseff’s first term. The realisation that tailwinds created by the Chinese demand for raw materials were no longer blowing led the government to implement a series of measures to stimulate the economy that turned out to be largely useless.

It was not “heterodoxy” that characterised the policy, it was uninformed wishful thinking. A plethora of measures were taken in isolation, without any apparent unifying strategy behind them, distributed mostly as “gifts” from the federal government (which later contributed to the public perception that corruption became a system of government). “Brazil is living through a very dangerous period right now. Neither the government, nor the parliamentary opposition are led by leaders the population trusts”

Plagued by semi-structural exchange rate problems, whereby Brazilian producers lose competitiveness in the face of imported goods in domestic markets and of other sellers in international markets, the federal administration tried to deal with them piecemeal, mostly through instruments like tax reductions or changes in tax rates.

Obsessed with car production, the government burned resources trying to stimulate production (only to meet increasing resistance of other countries to import them, most notably Argentina), again without any strategy thinking about how these newly-produced automobiles would be used in polluted and traffic-jammed Brazilian cities.

The federal government was not deficient only in terms of strategic thinking but also in terms of home caretaking: all available evidence points to the high probability that tax reductions and other similar measures were decided without any calculation of costs, lost fiscal revenues, and so on.

Anti-cyclical macroeconomic policy in late 2008 relied to a large extent on the expansion of consumption expenditures fuelled by increasing household indebtedness. The increase in non-performing loans and income stagnation made this option more and more unsustainable. Investment, in contrast, public and private, repeatedly frustrated expectations.

Unable to finance badly needed infrastructure investments, the government showed itself to be extraordinarily slow in devising appropriate strategies to attract private investors to implement them. Apparently lost in their own inability to define a way out of the mess, the government “muddled through” situations where more forceful definitions were required, as was the case of electric power.

The list of failures or of situations where the government showed inability to lead is long and well known. What was surprising to some extent was to find out that all evidence suggests that the government itself was unaware of what was going on.

Winning re-election by a narrow margin, President Rousseff, characteristically after a long period of hesitation, decided to take a 180-degree turn, asking a known orthodox and fiscal conservative economist to head an empowered Ministry of Finance, surprising even her supporters who seemed to be perplexed by the need to defend policies that they hotly denounced when presented by opposition politicians.

This picture would be difficult enough to manage without the Petrobras scandal. But Petrobras is not only the largest company in the country, it is practically a symbol of the nationality. Besides, energy was supposed to be Rousseff’s area of expertise and she was in fact responsible for the company’s policies for a while, as Minister of Mines and Power.

An increasingly loud murmur of a possible impeachment of the president led her to equivocal political decisions, beginning with the definition of her cabinet, widely considered to be particularly low quality, and alienating not only her major party in government, the Brazilian Democratic Movement Party, but even the majority of her own Workers’ Party.

The result of such initiatives was illustrated by the twin public demonstrations of Mar. 13 and 15.

On Mar. 13, nominal supporters of Rousseff marched through the streets of most of the largest cities in the country. Speaking to the press, most of the leaders of the march (Lula did not participate) declared conditional support for Rousseff – that is, conditional on the firing of the Minister of Finance and change of newly announced austerity policies.

On Mar. 15, an even larger crowd marched in the same cities declaring unconditional opposition to the president.

Brazil is living through a very dangerous period right now. Neither the government, nor the parliamentary opposition are led by leaders the population trusts. The president is slow and generally equivocal when making fateful decisions. The right-wing opposition seemed to be more interested in enjoying the possibility of enacting a “third” ballot to obtain at least a moral condemnation of the president.

This would be bad enough for a country that has just celebrated thirty years of civilian government. When the economy adds its own heavy problems to the political vacuum, it is impossible not to fear the future. (END/IPS COLUMNIST  SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Sahar Baker (left), with Ahed Baker (right) and sister-in-law in front of their beach camp house, with photographs of the four cousins killed by Israeli gunboats in summer 2014 while playing football on the beach in Gaza. Credit: Khaled Alashqar/IPS

By Khaled Alashqar
GAZA CITY, Mar 3 2015 (IPS)

“I have lost all meaning in life after the death of my child, I will never forgive anyone who caused the tearing apart of his little body.  I appeal to all who can help and stand with us to achieve justice and punish those who killed my child.”

As the tears rolled down her cheeks and with a rattle in her voice, 47-year-old Sahar Baker recalled the last moments of her ten-year-old son Ismail, who was killed along with three of his cousins after being targeted by Israeli gunboats while they were playing football on the beach during the Israeli attacks on Gaza last summer."We will not forget how our children were killed in cold blood without any reason. We hope that the Israeli army commanders will be tried before international justice and that they will be punished for the killing of the children" – Ahed Baker

Sahar’s plea for justice may soon be one step nearer now that the Palestine Government is set to formally join the International Criminal Court (ICC), which deals with war crimes, crimes against humanity and genocide.

Palestinian President Mahmoud Abbas signed the Rome Statute, the ICC’s founding treaty, on Dec. 31, after the U.N. Security Council rejected a Palestinian attempt to set a deadline for Israel to end its occupation of territories it captured in 1967. U.N. Secretary General Ban Ki-moon has said the Palestinians will formally join the ICC on Apr. 1.

Mohammad Shtayyeh, a member of the executive committee of the Palestine Liberation Organisation (PLO), is reported as having said that a first complaint will be filed against Israel at the ICC on Apr. 1 over the Israeli war against Gaza last year and Israeli settlement activity.

Palestinian membership of the ICC “provides an opportunity to raise the issues on Israel’s use of force based on occupation and crimes against the people and the land in Palestine, where we did not have the capacity before to sue Israel for its crimes against the Palestinians,” Palestinian Foreign Minister Riad Al-Malki told the press during a visit to Brazil to attend the inauguration ceremony of President Dilma Rousseff at the beginning of January.

The Baker family, who live in a beach camp in Gaza, is now hoping that Palestinian membership of the ICC will open the door for the prosecution of Israeli leaders and army officers for their crimes.

Sahar’s cousin Ahed Baker, father of Zakaria (10) and grandfather of Ahed Atif (9), shares her pain and bitterness. He is still looking for a way to bring the Israeli army to trial for the murder of his son and grandson, another two of the four young cousins killed on the beach. He told IPS that he and his family would do everything possible to ensure that their case makes its way to the ICC.

Sahar Baker holds a photograph of her ten-year-old son Ismail, killed along with three of his cousins during the Israeli attacks on Gaza in summer 2014. Credit: Khaled Alashqar/IPS

“We will not forget how our children were killed in cold blood without any reason,” said Ahed. “We hope that the Israeli army commanders will be tried before international justice and that they will be punished for the killing of the children.”

Palestinian leaders have long waved the card of membership of the ICC as a form of pressure on the Israeli government in their attempt to secure a Palestinian state.

However, apart from its political and legal benefits, Palestinian membership of the international court has created some serious implications for the Palestinians.

Israel has already frozen the transfer to the Palestinian Authority of tax funds owed to it. These funds are generally allocated for the salaries of Palestinian public employees and government operating expenses in Gaza and the West Bank, and the freeze is hampering the functioning of the Palestinian Unity Government and undermine the already weak public sector in Palestine.

Israel has also indicated that further ‘punitive’ steps will be taken soon against the Palestinians as a result of joining the ICC. Membership of the ICC thus appears to be the start of a new lengthy battle for Palestinians.

Some Palestinian human rights centres, including the Al Mezan Centre for Human Rights in Gaza City, are now working against the clock to compile documentation on the numerous cases of civilians who were killed during last summer’s Israeli war against Gaza, to be able to submit all the documents required for the ICC to investigate war crimes in Gaza and hold Israel accountable.

“Over the long years of occupation, there has been no equity for civilian victims and this, in my point of view, was a key reason that Israel waged three wars in less than five years. In fact, it has been due to the absence of justice and a sense that occupation is immune to accountability,” Issam Younis, Director of the Al Mezan Centre told IPS.

“Going to the ICC will bring justice to victims through international justice and ensure that there are no repeated offences of occupation without accountability,” he said.

According to Palestinian human rights advocates, membership of the ICC carries two overlapping purposes for Palestinian people and their leaders.

For the Palestinian people, of Gaza in particular, it not only opens an important door to achieving justice but also helps to criminalise the entire Israeli occupation establishment and its vicious atrocities against humanity.

For the Palestinian leadership, on the other hand, it seeks to strengthen the political, legal and diplomatic status of Palestine at the international level and pressure Israel to accept the creation of an independent Palestinian state in future negotiations.

What underpins the two goals is a historical desire for real justice and protection. Whether the ICC can deliver, only time will tell.

Edited by Phil Harris   

Farmers with the Landless Workers’ Movement (MST) protest the concentration of land ownership in Brazil, during a Feb. 21 demonstration in support of the occupation of part of the Agropecuaria Santa Mônica estate, 150 km from Brasilia. Credit: Courtesy of the MST

By Fabíola Ortiz
RIO DE JANEIRO, Feb 27 2015 (IPS)

In Brazil, one of the countries with the highest concentration of land ownership in the world, some 200,000 peasant farmers still have no plot of their own to farm – a problem that the first administration of President Dilma Rousseff did little to resolve.

In its assessment of the situation in the 2011-2014 period, the Brazilian Pastoral Land Commission (CPT) found the worst progress in that period in terms of agrarian reform in the last 20 years, one of the church-based organisation’s coordinators, Isolete Wichinieski, told IPS.

“Historically, there has been a high concentration of land in Brazil,” she said. But what is worrisome, she added, is that during the first presidency of Rousseff, whose second term started on Jan. 1, 2015, “land ownership has become even more concentrated.”

“There was a fall in the numbers of new rural settlements and of land titling in indigenous territories and ‘quilombos’ (communities of the descendants of African slaves), while on the other hand, investment in agribusiness and agro-industry grew,” said Wichinieski.

Social movements had hoped that Rousseff, who belongs to the left-wing Workers’ Party like her predecessor Luiz Inácio Lula da Silva (2003-2011), would take up the banner of democratisation of land ownership.

But her government’s economic policies have focused on incentives for agribusiness and agro-industry, mining and major infrastructure projects.

According to the CPT report, during the first Rousseff administration (2011-2014), 103,746 families were granted land under the government’s agrarian reform programme. But that figure is actually misleading, because in 73 percent of the cases, the land settlement process was already in progress before the president took office, and the families had already been counted in previous years.

If only the new families settled on plots of their own during Rousseff’s first administration are counted, the total shrinks to 28,000.

The government reported that in 2014 it regularised the situation of just 6,289 families – a number considered insignificant by the CPT.

Since 1995 agrarian reform was given a new boost, with the creation of a special ministry answering directly to the president, and other legal instruments, largely due to the intense lobbying and protests throughout the country by the Landless Workers’ Movement (MST).

As a result, during the presidency of Luis Henrique Cardoso (1995-2003), 540,704 families were given land, and 614,088 were settled on farms during Lula’s two terms (2003-2011), according to the National Institute for Colonisation and Agrarian Reform (INCRA), which reported that 9,128 rural settlements have been created since 2000.

The Dom Tomás Balduíno camp, along the river that crosses the Agropecuaria Santa Mônica estate, next to the first crops planted on the 400 hectares occupied by landless Brazilian peasant farmers. Credit: Courtesy of the MST

In order for land reform to be effective, the CPT argues, more settlements must be created and the concentration of rural property ownership must be reduced in this country of 202 million people. But the organisation does not believe Rousseff is moving in that direction, Wichinieski said.

Agrarian reform was not on the agenda of the campaign that led to the president’s reelection in October, and the new government includes names from the powerful rural caucus in Congress, which represents agribusiness and agro-industry.

The agriculture minister is former senator Kátia Abreu, the president of the National Confederation of Agriculture. She surprised people when she stated in a Feb. 5 interview with the newspaper Folha de São Paulo that there are no “latifundium” or large landed estates in Brazil.

“Abreu has backwards, outdated views of agriculture,” complained Wichinieski. “She denies that there is forced labour in the countryside, she isn’t worried about preserving the environment, and she argues in favour of the intensive use of agrochemicals in food production.”

The conflict over land has intensified, according to the CPT, with the expansion of livestock-raising and monoculture farming of soy, sugarcane, maize and cotton, and growing speculation by large landowners with close ties to politicians.

A typical case

One example is the case of the 20,000-hectare Agropecuaria Santa Mônica estate, 150 km from the national capital, Brasilia, in the state of Goiás, part of which has been occupied by families belonging to the MST.

The property belongs to Senator Eunício Oliveira, considered the wealthiest candidate for governor in Brazil in the last elections.

In the Senate, Oliveira heads the Brazilian Democratic Movement Party, Rousseff’s main ally in Congress. He served as communications minister under Lula in 2004-2005 and last year lost the elections for governor of the state of Ceará.

The landless farmers occupying 400 hectares of the Santa Mônica estate sell their agroecological products in nearby towns, promoting chemical-free family farming. Credit: Courtesy of the MST

Valdir Misnerovicz, one of the leaders of the MST, told IPS that the estate is unproductive and that its only purpose at this time is land speculation.

Strategically located between the municipalities of Alexânia, Abadiânia and Corumbá, Santa Mônica represents the largest land occupation by the MST in the last 15 years.

It all started on Aug. 31, when 3,000 families marched on foot and in 1,800 vehicles to the estate, part of which they occupied.

Since then, more than 2,000 men, women, children and elderly persons have been living in a camp and control 400 hectares of the estate. They are determined to win a portion of the land to farm.

This is one of the MST’s strategies, said Misnerovicz. “We occupy large areas of unproductive land. In the camp we grow a variety of food like green leafy vegetables, manioc, maize, rice, beans and squash. All of the families plant healthy food in chemical-free agroecological community gardens,” he said.

The tents in the Dom Tomás Balduíno camp were set up on the bank of a river that cuts across the estate, which comprises 90 different properties that the senator purchased over the last two decades.

“The day we got there, they tried to keep us out but there were thousands of us. We are never armed. Our strength is in the number of peasants who accompany us,” said Misnerovicz.

In November, a court ruled that Oliveira has the right to recover the property. But the MST leader is confident that despite the risk that the families will be evicted, they will be successful in their bid for the Santa Mônica estate to be expropriated under the land reform programme.

Misnerovicz said the government itself has encouraged the families occupying the land to continue negotiating.

“Then it would be possible, after a year, to make the biggest rural settlement in recent times in Brazil. We were with the president in January, who committed to a plan with targets for settling (MST) families camped around the country,” he said.

INCRA has avoided taking a public position on this specific case. But it pointed out that, by law, “all of the occupied properties are off-limits for inspections to evaluate the situation with a view to agrarian reform.”

The administrator of Santa Mônica, Ricardo Augusto, told IPS that the occupied area is productive agricultural property where soy, maize and beans are grown.

“The purchase of the property was notarised. The MST is not telling the truth. We advocate a negotiated, peaceful solution. Productive, occupied land can’t be expropriated, and there is no interest in selling the property,” he said.

But João Pedro, who was granted a plot of land in a municipality near Santa Mônica, sees things very differently.

During a Feb. 21 demonstration in favour of the occupation, near the camp, the farmer said the families camping there were merely seeking the enforcement of Brazil’s laws: “the land has a social function, and that’s all we want – for the constitution to be applied.”

Edited by Estrella Gutiérrez/Translated by Valerie Dee

The Sauce port industrial complex in the state of Pernambuco in northeast Brazil, where some 200 companies from different sectors will operate. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Nov 8 2014 (IPS)

“If I had to choose today I would stay back home, I wouldn’t come to look for work here,” said Josefa Gomes, who 30 years ago moved from Serra Redonda, a small town in Brazil’s semiarid northeast, to the city of Rio de Janeiro, 2,400 km away.

She reached that conclusion as a result of the changes she has seen in her hometown, population 7,000, during visits to her family in recent years. “Everything has changed, now people have electricity, there’s work in the flour mills, shoe factories, or farming cooperatives,” she told IPS.

Besides, thanks to paved roads and buses that pass frequently, it only takes 40 minutes to reach Campina Grande, a city of around 400,000, from her town. “It used to take over an hour,” she said.

The economy of the northeast, Brazil’s poorest region, has been growing since the past decade at a pace much higher than the national average, which has been nearly stagnant since 2012, due to the slowdown in the traditional motor of the economy: the south.The northeast is enjoying strong economic growth that has reduced the gap with the most developed part of the country, the south and southeast. The progress made and the expectations of further advances strengthened regional support for Rousseff.

The southern state of São Paulo is in recession. Its industrial output accounted for over 31 percent of the national total in 2011, compared to 38 percent 10 years earlier, according to an Oct. 6 study by the National Industrial Confederation.

The 7.7 percentage points lost were distributed among other states, including the nine states of the northeast.

That trend has been exacerbated since last year by an industrial crisis whose epicentre is São Paulo. Brazil’s industrial production fell 2.9 percent in the first nine months of this year, compared to the same period in 2013.

The country’s industrial decentralisation, added to other factors, has reduced the economic inequality between Brazil’s regions, at the expense of the traditional industrial centres of this Latin American powerhouse of 200 million people.

The dichotomy in the economic geography fuelled the opposite behavior of voters in Brazil’s recent elections. President Dilma Rousseff was reelected with 71.7 percent of the vote in the northeast in the Oct. 27 runoff.

But her triumph was threatened by a broad opposition majority in São Paulo, where 64.3 percent of voters backed her rival, the pro-business Aécio Neves.

The electoral divide in Brazil tends to be attributed to the government’s social programmes, especially Bolsa Familia, which have pulled some 36 million Brazilians out of poverty during the governments of the left-wing Workers Party led by Luiz Inácio Lula da Silva since 2003 and Rousseff since 2011.

A rural settlement in the state of Pernambuco, in the northeast of Brazil, with tanks to collect and store rainwater and make it potable, which form part of the small community infrastructure projects that have mushroomed in the region. Credit: Mario Osava/IPS

The northeast is enjoying strong economic growth that has reduced the gap with the most developed part of the country, the south and southeast. The progress made and the expectations of further advances strengthened regional support for Rousseff.

Bolsa Familia funnels some 440 million dollars a month to the northeast, where the monthly cash transfer is received by 6.5 million families – nearly half of the programme’s recipients nationwide.

But that is only one-sixth of what is received by the 8.8 million retirees and pensioners of the region, from the social security system, economist Cícero Péricles de Carvalho told IPS.

Moreover, of Brazil’s five geographic regions, the northeast generated the most formal sector jobs in the past few years. There are currently nearly nine million workers with contracts in the region – double the number at the start of the 21st century, he said.

“The number of formal sector jobs in the construction industry alone increased from 195,000 in 2003 to 650,000 today,” Carvalho said.

The greater number of formal sector jobs means better wages, which also rose thanks to the policy of increasing the minimum wage adopted by Lula and Rousseff, besides improved access to bank loans – all of which has driven up buying power and consumption.

“The additional income, also from scholarships and pensions, which doubled between 2003 and 2014, and the new jobs have fuelled demand tremendously, because the beneficiaries don’t save, they spend everything on consumption,” said Carvalho, a professor at the Federal University of Alagoas, a small state in the northeast.

The rise in consumption bolstered commerce, which has in turned driven the expansion of networks of supermarkets and new industries to meet the growing demand, like factories of construction materials, clothing and food.

Another reason for the expansion was the Growth Acceleration Programme, implemented since 2007 and consisting of a set of economic policies and investment and infrastructure projects ranging from small community endeavours to giant megaprojects like the diversion of the São Francisco river, which includes the construction of 700 km of channels and tunnels to carry water to 12 million people.

“That unexpected dynamic has generated economic development as well as social inclusion, with social gains that aren’t limited to income,” such as the increase in access to electricity through the programme “Light for all” or the expansion in health and education coverage, Carvalho said.

Nevertheless, living standards in the northeast are still far below the national average, and the difference has only been reduced slowly, also because the region’s economic growth has been concentrated in the coastal areas, he added.

Deindustrialisation

Brazil’s process of deindustrialisation has also affected the northeast, but to a lesser degree than in São Paulo and with better prospects for the future, another local economist, João Policarpo Lima of the Federal University of Pernambuco, told IPS.

There are large-scale projects that will accelerate industrial expansion when they come fully onstream, he said. They include a refinery, a petrochemical plant and the world’s biggest Fiat assembly plant, being built in the northeast state of Pernambuco, which has grown the most in the past few years.

Large companies have set up shop in two port-industrial complexes: Suape in Pernambuco, and Pecém in the neighbouring state of Ceará. Suape also attracted more than 100 companies, including a major shipyard and the biggest flour mill in Latin America, besides the refinery and petrochemical plant.

Meanwhile, in São Paulo the strong opposition vote and the vehement rejection of the Workers’ Party, Lula and Rousseff were connected to the economic losses.

In protests in the city of São Paulo before and after the elections, demonstrators chanted increasingly hate-filled slogans against the “nordestinos” for “selling” their vote in exchange for Bolsa Familia, which provides an average monthly stipend of 70 dollars.

The industrial setback was especially felt in the sugarcane industry, which produces sugar and ethanol and represents 80 percent of the agricultural economy of São Paulo, said businessman Maurilio Biagi Filho of Ribeirão Preto, a city known as the “sugarcane capital”.

“The sector is caught up in a serious crisis that has given rise to a sense of desperation and will take many years to overcome, even if measures are adopted to bring about a recovery,” he told IPS.

The business community and analysts blame the crisis on gasoline price controls implemented by Rousseff to curb inflation. Ethanol, the cost of which is rising, has been unable to compete with the subsidised fossil fuel prices.

The situation was aggravated with the drop in sugar prices since 2010 and this year’s drought, which led to water rationing in more than 130 towns and cities in the state of São Paulo.

Dozens of sugar mills went under or suspended production in the past few years, while many others accepted legal accords to avoid insolvency proceedings or were purchased by foreign corporations. An estimated 300,000 jobs were lost.

The magnitude of the crisis and the perception that it is largely due to the government “influenced voters (in São Paulo), especially in the interior,” Biagi concluded.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

By Fernando J. Cardim de Carvalho
RIO DE JANEIRO, Oct 30 2014 (IPS)

The tight race between incumbent President Dilma Rousseff of Brazil’s Workers’ Party and her opponent, Aecio Neves from the centre-right Brazilian Social Democracy Party (PSDB) party, ended on Sunday, Oct. 26 with the re-election of Rousseff.

As happens in cases of re-election, the new government is, for all purposes, inaugurated immediately, because there is no need to wait until the legal date of January 1 to begin forming the new government and making necessary decisions.

Fernando Cardim de Carvalho

Neither is there a honeymoon in a re-election: voters expect work to begin and some results to show right away.

There is no doubt that Rousseff faces a difficult period ahead. The economy has ground to a halt during 2014 and the perspectives for 2015 are not much better. During practically the whole of the first semester, inflation remained near or above the ceiling of 6.5 percent that was set by the government itself, and the perspectives for next year are not good either.

Balance of payments positions are not comfortable, marked by very high deficits in current transactions and dependence on capital inflows. Social inclusion programmes that were very successful in the recent past may be near exhaustion and will need an upgrade.

Finally, a huge deal was made during the electoral campaign of corruption cases in the administration and in state enterprises, notably Petrobrás, the Brazilian oil company, raising issues that will have to be dealt with by the incoming administration.“There is no doubt that Rousseff faces a difficult period ahead. The economy has ground to a halt during 2014 and the perspectives for 2015 are not much better”

This does not address, of course, another set of difficulties related to the formation of governments in the Brazilian political system, requiring coalitions to be formed with political parties that look like being for rent rather than available for political debates around principles or programmes.

Let us be clear: the situation is uncomfortable on many fronts but is far from catastrophic, no matter how dramatic opposition speeches have tried to suggest.

Things are far better than in Western Europe, for example, where a second recession is very likely to happen in the near future in economies already devastated by the irrational adherence to austerity policies imposed by some governments led by Germany. But the problems the new government will have to face cannot be underestimated either.

Focusing only on the economic challenges, Rousseff’s first task is to try to escape the curse the Brazilian economy has been facing since it achieved control of inflation twenty years ago.

The Real Plan, named after the new currency that was introduced in 1994, was based on the access to cheap imports obtained by liberalising foreign trade and an overvalued currency. To maintain overvaluation it was necessary to attract foreign capital inflows, which required high interest rates (higher than that paid in other countries). High interest rates were also necessary to control domestic demand so that no significant pressure would be applied on domestic prices.

However, exchange rate overvaluation and high interest rates reduced the competitiveness of local producers, particularly in the manufacturing sector, which are very sensitive to exchange rate behaviour.

As a result, the Brazilian economy has lived on a see-saw in these twenty years, alternating periods where devalued exchange rates have allowed some industrial expansion at the cost of accelerating inflation with periods of controlled inflation at the cost of industrial stagnation.

Fernando H. Cardoso was imprisoned by this dilemma, as was Lula da Silva. So was Rousseff in her first term, when she, to her credit, realised that the country had to escape the trap but was unsuccessful in finding the way to do so.

With the international economy in a weak condition, and which is forecast to last, Rousseff has to find a way to promote growth without fuelling higher inflation and increasing external vulnerability, that is, without raising the volume of imports when exports are stagnating.

Bringing the inflation rate down is also needed. Societies tend to have long memories (see how the Germans still react to the hyperinflation they experienced a century ago). A large number of Brazilians still remember how unbearable life was when inflation was in the two-digit figures a month.

We are not anywhere close to repeating that experience, but it has made Brazilians alert and sensitive to any signs that government may be lax in fighting inflation. Besides, 6.5 percent a year for more than three years in a row does add to significant loss of purchasing power for fixed incomes and for those wages and salaries that are not compensated by more generous increases.

Even the greatest triumph of the Workers’ Party administration – social programmes – may be near exhaustion.

The Food and Agriculture Organization of the United Nations (FAO) has announced that hunger is no longer an issue for Brazil. Of course, this is great news but it also means that social policies will now have to be designed with higher aims, to improve the quality of life for the populations that were upgraded by past programmes.

Jobs, education and health are much more difficult to address than extreme poverty, the reduction of which could be dealt with cash transfers. Even if no other important problem was on the agenda, this is a tall order for any political leader, but it is even more so for a re-elected president.

Brazilian citizens are impatient to see how Rousseff will meet the challenge. (END/IPS COLUMNIST SERVICE)

(Edited by Phil Harris)

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Post-election garbage outside a voting station in a populous neighbourhood of Rio de Janeiro, a day after the first round of Brazil’s presidential elections – a metaphor for the dirty campaign. Credit: Tânia Rêgo/Agência Brasil

By Mario Osava
RIO DE JANEIRO, Oct 7 2014 (IPS)

The dream of electing Brazil’s first black president, an environmental activist from the Amazon jungle, lasted only 40 days and was frustrated in Sunday’s elections. In the end, it is the two parties that have dominated Brazilian politics for the last 20 years that will face off in the second round of voting on Oct. 26.

Former environment minister Marina Silva, who was briefly the frontrunner in the polls after she was named presidential candidate by the Brazilian Socialist Party (PSB) on Aug. 16, saw her popularity plunge in the last three weeks. She came in third, with 21 percent of the vote.

Aecio Neves of the Brazilian Social Democracy Party (PSDB), which governed Brazil from 1995 to 2003 under former president Fernando Henrique Cardoso, and President Dilma Rousseff of the Workers’ Party (PT), garnered 33.5 and 41.6 percent of the vote, respectively.

Improvisation, a result of her sudden designation as candidate and the diverse coalition that backed her up, headed by the party that thrust her into the race, may have contributed to her failure and makes the political future of the black former Amazon activist unclear.

If projections are borne out, the economy will be the central focus of the new campaign, which will be the sixth time since 1994 that the PSDB and the PT, both of which have a social democratic orientation, face off at the polls.Improvisation, a result of her sudden designation as candidate and the diverse coalition that backed her up, headed by the party that thrust her into the race, may have contributed to her failure and makes the political future of the black former Amazon activist unclear.

But in elections characterised by sudden shifts, such as Silva’s rise and fall, a new surprise could come from a scandal at Brazil’s state-run oil giant Petrobras, involving billions of dollars in kickbacks over the last decade.

During part of that period, Rousseff chaired the Petrobras board.

The investigation is in the hands of the police and the legal authorities. But the names of some politicians and companies implicated in the scandal have been leaked to the press.

The fear, especially in the government, is that other information will come to light.

The opposition criticises the current administration for what it calls errors in the management of the economy, which it says have led to the current stagnation, high inflation, fiscal deterioration and imbalances in the external accounts.

But Rousseff, for her part, can point to the low unemployment rate – just five percent in August – the result of the generation of millions of jobs during the nearly 12 years of PT government, as well as the progress made in income distribution and poverty reduction.

The results of the Oct. 5 elections also reflect a geographically and socially polarised country. In the industrialised south and the state of São Paulo in particular, the strong desire to unseat the PT gave rise to a “useful vote” cast by many who, as they saw Silva’s popularity decline, threw their support behind Neves. In the state of São Paulo, Neves took 44 percent of the vote, compared to Rousseff’s 22 percent.

The PT’s strongest backing is in the impoverished Northeast, which has only slightly more voters than São Paulo. The president took nearly 60 percent of the vote in the Northeast, Brazil’s poorest region.

The country thus remains ideologically divided, since the first victory by former president Luiz Inácio Lula da Silva (2003-2011).

The two rivals are now both hoping to win the support of Silva and the coalition that backed her, headed by the socialists, which could be decisive in the runoff.

The difference between the moderate left-wing Rousseff and the business-friendly centrist Neves in the first round was 8.37 million votes, while Silva took 22.17 million votes.

What is still unclear is the direction that will be taken by the heterogeneous coalition headed by the PSB. In 2010, when the environmentalist ran for president as the Green Party (PV) candidate, she won 19.3 percent of the vote and remained neutral during the campaign for the runoff between candidates of the same two parties as today.

But the situation was very different back then. Silva presented herself as a third alternative, criticising the polarisation between the PT and the PSDB, and setting forth her own proposals.

Dissatisfied with the PV, she abandoned the Greens to create the Sustainability Network, aimed at promoting socioenvironmental sustainability and a new way of doing politics.

But her group did not achieve the necessary 492,000 signatures to become a political party because the electoral court failed to validate 95,000 signatures. Silva then decided to join the PSB, which named her vice presidential candidate on the ticket led by socialist leader Eduardo Campos.

However, Campos died in a plane crash on Aug. 13 and Silva replaced him as presidential candidate. Seen as the leader who best represented the widespread discontent that fuelled the June 2013 nationwide protests, her popularity soared, until she was ahead of Rousseff in the opinion polls.

But the future of Silva, who took only two percentage points more of the vote than in the 2010 elections, is now cloudy. Her political and personal weaknesses were revealed by the harassment from her opponents, especially the Rousseff campaign, which mounted aggressive ad attacks against the other woman in the race.

For example, the PT charged that Silva would eliminate the Bolsa Familia programme, which provides cash transfers to nearly 14 million poor households, would reduce investments in pre-salt oil fields exploration, and would hand power over to the bankers.

Under Brazil’s election laws, Silva’s team had just two minutes of electoral programming on nightly television – hardy enough time to defend herself from the allegations, let alone set forth her environmental proposals, which brought her international renown, or other attractive points on her platform, such as a “renewal of democracy”.

Because free electoral programming time in Brazil is proportionate to the parliamentary representation of each coalition, Rousseff had 11 minutes a day of broadcasting time.

For the second round, the time allotted is the same for both candidates: 10 minutes each.

But the ambiguous policy proposals and reversals that marked Silva’s campaign also hurt her image. She started out by reversing her stance just after the socialist party officially announced its support for same-sex marriage and other rights for homosexuals. She later fell into other contradictions regarding her record in the Senate.

Nor did Silva perform well in the televised debates.

It is not yet known whether she will stay with the PSB, which was left without a strong leader to hold it together, or will go it alone with her Sustainability Network. The socialists seem to be coming apart: Some of the PSB’s leaders have already come out in favour of Neves, while others have ties to the governing PT.

On the economic front, Silva’s advisers are close to their counterparts in the PSDB, which would push her towards supporting that party’s candidate in the second round. To that is added the accusations by the PT, which include the label “neoliberal” because of Silva’s economic orientation.

Backing either of the two candidates still in the race would hurt her central stance, which is to lead a third route to overcome the polarisation between the PT and the PSDB while renovating and cleaning up Brazilian politics.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

The Sixth BRICS Summit which ended Wednesday in Fortaleza, Brazil, attracted more attention than any other such gathering in the alliance’s short history, and not just from its own members – Brazil, Russia, India, China and South Africa.

Two external groups defined by divergent interests closely watched proceedings: on the one hand, emerging economies and developing countries, and on the other, a group comprising the United States, Japan and other Western countries thriving on the Washington Consensus and the Bretton Woods twins (the World Bank and the International Monetary Fund).

The first group wanted BRICS to succeed in taking its first big steps towards a more democratic global order where international institutions can be reshaped to become more equitable and representative of the world’s majority. The second group has routinely inspired obituaries of BRICS and gambled on the hope that India-China rivalry would stall the BRICS alliance from turning words into deeds.The stature, power, force and credibility of BRICS depend on its internal cohesion and harmony and this, in turn, revolves almost wholly on the state of relations between India and China. If India and China join hands, speak in one voice and march together, then BRICS has a greater chance of its agenda succeeding in the international system.

In the event, the outcome of the three-day BRICS Summit must be a disappointment to the latter group. First, the obituaries were belied as being premature, if not unwarranted. Second, as its more sophisticated opponents have been “advising”, BRICS did not stick to an economic agenda; instead, there emerged a ringing political declaration that would resonate in the world’s trouble spots from Gaza and Syria to Iraq and Afghanistan.

Third, and importantly, far from so-called Indian-China rivalry stalling decisions on the New Development Bank (NDB) and the emergency fund, the Contingency Reserve Arrangement (CRA), the Asian giants grasped the nettle to add a strategic dimension to BRICS.

With a shift in the global economic balance of power towards Asia, the failure of the Washington Consensus and the Bretton Woods twins in spite of conditionalities, structural adjustment programmes and “reforms”, financial meltdown and the collapse of leading banks and financial institutions in the West, there had been an urgent need for new thinking and new instruments for the building of a new order.

Despite the felt need and multilateral meetings that involved developing countries, including China and India which bucked the financial downturn, there had been no sign of alternatives being formed.

It is against this backdrop – of the compelling case for firm and feasible steps towards a new global architecture of financial institutions – that BRICS, after much deliberation, succeeded in agreeing on a bank and an emergency fund.

From India’s viewpoint, this summit of BRICS – which represents one-quarter of the world’s land mass across four continents and 40 percent of the world population with a combined GDP of 24 trillion dollars – was an unqualified success. The success is sweeter for the National Democratic Alliance (NDA) government led by the Bharatiya Janata Party (BJP) because the BRICS summit was new Prime Minister Narendra Modi’s first multilateral engagement.

For a debutant, Modi acquitted himself creditably by steering clear of pitfalls in the multilateral forum as well as in bilateral exchanges – particularly in his talks with Chinese President Xi Jiping, with Russian President Vladimir Putin and with Brazilian President Dilma Rousseff – and by delivering a strong political statement calling for reform of the U.N. Security Council and the IMF.

In fact, the intensification and scaling up of India-China relations by their respective powerful leaders is an important outcome of the meeting in Brazil, even though the dialogue between the Asian giants was on the summit’s side-lines. Nevertheless, Modi and Xi spoke in almost in one voice on global politics and conflict, and on the case for reform of international institutions.

The new leaders of India and China, with the power of their recently-acquired mandates, sent out an unmistakable signal that they have more interests in common that unite them than differences that separate them.

Against this backdrop, Indian Prime Minister Modi’s outing was significant for other reasons, not least because of the rapport he was able to strike up, in his first meeting, with Chinese President Xi. The stature, power, force and credibility of BRICS depend on its internal cohesion and harmony and this, in turn, revolves almost wholly on the state of relations between India and China. If India and China join hands, speak in one voice and march together, then BRICS has a greater chance of its agenda succeeding in the international system.

As it happened, Modi and Xi hit it off, much to the consternation of both the United States and Japan. They spoke of shared interests and common concerns, their resolve to press ahead with the agenda of BRICS and the two went so far as to agree on the need for an early resolution of their boundary issue. They invited each other for a state visit, and Xi went one better by inviting Modi to the Asia-Pacific Economic Cooperation meeting in China in November and asking India to deepen its involvement in the Shanghai Cooperation Organisation (SCO).

Modi’s “fruitful” 80-minute meeting with Xi highlights that the two are inclined to seize the opportunities for mutually beneficial partnerships towards larger economic, political and strategic objectives. This meeting has set the tone for Xi’s visit to India in September.

Although strengthening India-China relationship, opening up new tracks and widening and deepening engagement had been one of former Indian Prime Minister Manmohan Singh’s biggest achievements in 10 years of government (2004-2014), after a certain point there was no new trigger or momentum to the ties. Now Xi and Modi are investing effort to infuse new vitality into the relationship which will have an impact in the region and beyond.

As is the wont when it comes to foreign affairs and national security, Modi’s new government has not deviated from the path charted out by the previous government. BRICS as a foreign policy priority represents both continuity and consistency. Even so, the BJP deserves full marks because it did not treat BRICS and the Brazil summit as something it had to go through with for the sake of form or as a chore handed down by the previous government of Manmohan Singh.

Before leaving for Brazil, Modi stressed the “high importance” he attached to BRICS and left no one in doubt that global politics would be high on its agenda.

He pointed attention to the political dimension of the BRICS Summit as a highly political event taking place “at a time of political turmoil, conflict and humanitarian crises in several parts of the world.”

“I look at the BRICS Summit as an opportunity to discuss with my BRICS partners how we can contribute to international efforts to address regional crises, address security threats and restore a climate of peace and stability in the world,” Modi had said on eve of the summit.

Having struck the right notes that would endear him to the Chinese leadership, Modi hailed Russia as “India’s greatest friend” after he met President Vladimir Putin on the side-lines of the summit.

India belongs to BRICS, and if BRICS is the way to move forward in the world, then BRICS can look to India, along with China, for leading the way, regardless of political change at home. That would appear to be the point made by Modi in his first multilateral appearance.

By IPS Correspondents
RIO DE JANEIRO, Aug 23 2013 (IPS)

The controversy is on: the authorities in Brazil say there are not enough medical professionals, and to resolve the problem, they decided to import this “non-traditional product”. Doctors, on the other hand, are opposed to both the diagnosis and the treatment. But there is one thing everyone agrees on: the areas suffering from a shortage of health professionals are the poor suburbs and impoverished areas in the hinterland and remote border areas. The situation in Brazil as compared to itself and to other countries can be seen in this series of interactive maps and graphs.

Data: Fabíola Ortiz. Design: Ignacio Castañares

ASA rainwater tank. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Jul 31 2013 (IPS)

The decisions taken by the Brazilian government in the fight against drought in the country’s semiarid Northeast are an example of the disconnect between politicians and the citizens, which triggered an unexpected wave of protests in June.

Even though the centre-left government of Dilma Rousseff embraced a solution that emerged from civil society – distributing rainwater collection tanks – it did so in a way that ignored essential aspects of the successful decade-long initiative, the organisers complain.

“They didn’t listen to us,” said Naidison Baptista, one of the leaders of the Articulação no Semiárido Brasileiro (ASA) – the “Brazilian semiarid network” made up of nearly 1,000 non-governmental, community, labour, religious and smallholder farmer groups that was created in 1999 to provide clean water to poor rural families in drought-prone areas.

Rousseff announced in July 2011 that by the end of her term in 2014, her government would distribute 750,000 rainwater tanks in the Northeast, through the “Water for All” programme, as part of the government’s poverty eradication efforts.

That would have been a major triumph for the ASA movement, which had distributed 476,040 rural water tanks as of Jul. 17 – nearly half of its goal of one million.

ASA’s tanks, along with the 750,000 promised by the government, would mean total coverage for the poor rural population in need of water in the Northeast, the country’s poorest region.

Brazil’s semiarid Northeast region, as large as Germany and France combined, is home to 22 million of the country’s 198 million people, including 8.6 million peasants, according to the 2010 census.

But the water tanks offered by the ministry of national integration, which is in charge of the government programme, are plastic, made by industrial companies, and are distributed through state and municipal governments.

“It is the old model, without participation by the people,” Baptista told IPS.

He said it was a return to a paternalistic relationship based on government donations, which generates dependency by the beneficiaries, because they don’t know where the tanks came from or how to maintain them.

“If they don’t get involved in the construction process, they don’t take proper care of the tanks,” he said.

The ASA tanks, by contrast, are made of prefabricated cement slabs produced by local workers and installed by the families themselves, who receive training in water management to make the rainwater they collect last for the entire eight-month dry season, and to ensure that it is always potable.

This way, the tanks give a boost to the local economy, by using materials and services from nearby suppliers and increasing remunerated employment in a job-scarce market.

“It is an endogenous, autonomous solution that helps people live in the Northeast’s semiarid conditions and distributes income,” Baptista stressed.

He said the government programme, on the other hand, focuses the funds on a handful of far-away companies and strengthens the traditional “drought industry” – an expression that refers to the exploitation of tragedy by local elites who charge high prices for the dirty water distributed by trucks, benefit from federal aid, or dole out food, water or jobs to potential voters in an election year.

Besides, a plastic water tank costs 5,090 reals (2,300 dollars), according to the ministry of national integration – more than twice the cost of a cement tank. That, multiplied by hundreds of thousands, reflects “big profits for industry,” Baptista said.

ASA launched a campaign against the PVC water tanks after the government shifted to plastic tanks in late 2011.

The movement complains that the plastic tanks exclude the local population from the process of installing and maintaining the tanks and sharing their knowledge and training.

The national government argues that large-scale industrial production is necessary to accelerate distribution of the tanks for collecting and storing water for household and agricultural use at a time of prolonged drought.

But Baptista said that argument is false, because ASA can mobilise up to 3,000 local organisations and expand its activities, if it has the financing.

The government’s decision required institutional changes, because it transferred the reins of the project to local governments, at the expense of civil society organisations.

A first consequence was that the ministry of social development suspended its financial support for the “One Million Water Tanks” (P1MC) programme that ASA has been carrying out since 2003 with funding from a diverse range of sources, including banks, companies and foreign donors, as well as the national government.

But a Dec. 20, 2011 demonstration by some 15,000 people in Petrolina, a city in a major irrigated fruit-growing area in the Northeast, forced the ministry of social development to backtrack and sign a new agreement with ASA.

The plastic tanks, which began to be widely distributed last year, have met with rejection in some communities. A few city governments, in Serra Talhada in the state of Pernambuco, for instance, have also refused to accept them.

The plastic is deformed by the hot sun and “the water heats up, it hurts your stomach,” complained Rosalina Maria de Jesus, an indigenous woman who said she was “70 years old, more or less,” belonging to the Pankararú people in Pernambuco.

Industrially-produced tanks deformed by the sun were replaced by new ones from the factories and the problem was corrected. But many people continue to believe that they cannot withstand the tropical sun for long.

In some towns, the tanks pack the central square for weeks or months because of how slowly the municipal governments distribute them to rural families. In one case, in Maracás in the state of Bahia, 830 PVC tanks caught fire after spending 40 days in a municipal lot.

The cement tanks, which have been proven to last for decades, were created by a young peasant farmer who migrated to São Paulo in 1955, where he learned to make pools.

After returning to Bahia, he invented the prefabricated slabs with which it is possible to make, in a few hours, the cylindrical tanks that are eradicating thirst and saving the lives of children previously cut short by contaminated water.

The two kinds of tank are now operating side by side in the Pankararú village, as they are in many other municipalities.

But critics say the plastic tanks reflect the penetration, in the government, of the old conception of “fighting drought” that led to failure after failure in the Northeast.

The biggest current project in that respect is the diversion of the São Francisco river, designed to pipe water to 12 million people, mainly in cities, in the Northeast.

The megaproject, which got underway in 2007, has drawn public criticism because of its growing costs, currently estimated at 3.7 billion dollars, and the constant delays in the construction of the 713 km of canals, aqueducts and tunnels, raising fears of another “white elephant” in the Northeast.

Rather than “fighting drought”, the focus of ASA is on promoting “coexistence” with semiarid conditions, whose most noteworthy example is the rainwater tanks that serve the rural population, the hardest-hit by drought.

The ambiguity of the Rousseff administration, which earmarks tiny amounts of financing to civil society projects like ASA in comparison to its huge investments in megaprojects, is one element that has fuelled the protests that have filled the streets of Brazil’s cities for the last two months.

People are growing more and more sceptical, believing that national decisions have turned into business opportunities between government leaders and large companies.

The leaders of South America’s Mercosur trade bloc decided to set up a committee to facilitate the incorporation of new members, adopt a mechanism to defend democracy in case of a coup, and ban vessels from the Malvinas/Falkland Islands from docking in member countries’ ports.

Mercosur leaders express solidarity with Argentina's historic claim to the Malvinas/Falkland Islands. Credit: Office of the Uruguayan president

At Tuesday’s summit, the presidents of Argentina, Brazil, Paraguay and Uruguay also signed a free trade agreement with Palestine, seen as mainly symbolic, and expanded the list of products from outside the bloc that will pay import tariffs.

In their speeches, the Mercosur (Southern Common Market) leaders acknowledged the contradictions and hurdles faced by the region’s largest trade bloc, while stressing the need to continue to forge ahead with the process of integration.

At the bloc’s headquarters in Montevideo, host President José Mujica met Cristina Fernández of Argentina, Dilma Rousseff of Brazil and Fernando Lugo of Paraguay, as well as Hugo Chávez of Venezuela and Rafael Correa of Ecuador, whose countries are in the process of joining as full members.

“Our path is full of contradictions and difficulties,” Mujica said. “Woe to us if the contradictions disillusion us and we abandon this project. We would soon become a leaf in the wind, in this world of colossal forces.”

The Uruguayan president emphasised that the bloc represents not only economic, but political, integration. “Without politics, there will be no Mercosur in the long run, and there will be no convergence, because this is not only an economic equation.

“Alas for us if we fail to understand that the underlying issue is a question of power, and that this question makes it necessary to move towards convergence,” he said.

Mujica also confirmed the creation of a high-level committee to analyse the admission of Venezuela and Ecuador as full members.

Venezuela, whose admission process began in 2006, is only awaiting approval by the Paraguayan Congress, where legislators opposed to the left-leaning Lugo hold a majority. For its part, Ecuador formally requested full membership on Tuesday.

Chávez said the incorporation of his country as a fifth full member has been blocked “by just five lawmakers” in Paraguay.

“These people who have been opposing (Venezuela’s admission) for five years, I don’t know if they are aware of the harm they are causing, not to Venezuela, but to everyone, to the Paraguayan people themselves,” he said. “There are only five people who don’t want it. I think that behind them there must be a very powerful hand, moving who knows what mechanisms of pressure,” he maintained.

Chávez underlined that Venezuela’s incorporation would mean “opening Mercosur to the Pacific.

“We are members of OPEC (Organisation of Petroleum Exporting Companies), we have gas and energy reserves, we have things to contribute,” he added. “We have to expedite this, spurred on by the global crisis that is threatening us.”

Lugo also referred to the case of Venezuela and the resistance put up by a handful of legislators in his country.

“This government of Paraguay is respectful of its institutions, but it is making an effort to strengthen integration. The incorporation of Ecuador and Venezuela would work in favour of our bloc,” he said.

Rousseff, meanwhile, highlighted the agreement reached at the summit “to expand the list of products included in the common foreign tariff” applied to imports from outside Mercosur, and to adopt various mechanisms to foment intra-bloc trade.

Correa, for his part, stressed the signing of the “Montevideo Protocol”, a mechanism providing for a mutual response in defence of democratic institutions in case of a coup d’etat in any of the member countries.

The summit agenda, which was to include public ceremonies, such as the signing of the agreement with Palestine – signed in private in the end – was interrupted by the tragic news of the death of Argentina’s deputy trade secretary, 33-year-old Iván Heyn. The newly appointed official was found hanged in his room in the Montevideo hotel where most of the Argentine delegation was staying. The police said his death appeared to be a suicide, but that the investigation continued.

When Fernández was notified, she was so upset that her private doctor was called to attend to her.

Malvinas/Falklands

The summit also approved a resolution to close the bloc’s ports to vessels flying the Falkland Islands flag. The islands, known as the Malvinas in Argentina, have been held by Britain since the 1830s, and were the subject of a brief war between the two countries in 1982, when Argentina sought to assert its sovereignty over them.

In a column posted on the Uruguayan president’s web site Tuesday, Mujica explained his decision to ban the boats from docking in Uruguay, arguing that his country’s foreign policy has always been based on national interests, but also on the principle of solidarity with the region.

Mujica said solidarity with Buenos Aires also benefited Montevideo. “Uruguay’s political history shows that every time relations with Argentina have soured, the economy and labour have been enormously impaired,” he wrote.

Fernández expressed her appreciation for the member countries’ decision to block boats from the Malvinas.

The Malvinas “are not just an Argentine cause, but a global cause, because (the British) are taking oil and fishing resources, and when they need more resources, whoever is the strongest will go to find them whenever and however,” she said, as Rousseff nodded.

“When they sign something involving the Malvinas, they are doing so as if the Malvinas belonged to them. There are many countries here with great natural wealth, and this wealth must be defended. Let’s be smart enough to understand that, by taking care of each other, we are taking care of ourselves,” she added.

At the end of the summit, Mujica handed over the rotating six-month presidency of the bloc to Fernández.