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Dilma leaves but problems in Brazil remain


21-06-2016
English | العربية

Rudy Simonassi

Senior Non- Resident Fellow- Global Affairs


Tag: economy Foreign Policy Global Affairs Government Policy International Relations Policy Analysis Research UAE United Arab Emirates
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Millions of Brazilians who went to the streets to celebrate the  removal of President Dilma Rousseff  will not live better. At least 100 million of Brazilians celebrated the beginning of the impeachment procedure and removal of President Rousseff, whom as of 12th May 2016, is no longer  the head of state of Brazil. Many of her compatriots wanted this since January 2015, when Rousseff began her second presidential term.

 

 

According to polls, 61% of Brazilians approve the impeachment and removal of Rousseff as a victory. “But once you go through the euphoria, it comes the tears and a severe hangover,” a comment written for the newspaper Deutsche Welle.

 

 

 

Brazilians will feel they are still at the epicenter of an economic crisis, accompanied by high unemployment and inflation. Citizens will  have to admit that their country has an urgent need for political, financial and social system reforms. Brazillians are quite aware that such reforms must be passed by the National Congress, in which 60% percent of its parliamentary members are associated  with corruption and are being investigated.

 

 

Brazil is now in the hands of former Vice President Michel Temer, whose image is not better than that of Rousseff. Besides his own unpopularity, Temer will have to contend with another problem; the opposition of Rousseff’s Labor Party (PT). The Labor Party is the third force in the Chamber of Deputies, the second force in the Senate, which puts the legitimacy of the new government into question. It is likely that the Labor Party will do everything possible to block the political course of the new president. In this sense, there is nothing new in Brazilian politics.

 

 


It is known that Michel Temer can govern the country between six months and two and a half years - depending on the duration of the procedure for impeachment against Dilma Rousseff. It also known that he doesn’t want to run for election in 2018. Even if he wanted, he couldn’t as after his inauguration as vice president, as Temer received a ban of other political posts for a period of eight years. The ban was imposed because of irregularities in campaign donations during the last election. However  he still had the right to occupy the vacant post Rousseff left, as he was the vice president. 

 

 

 

Temer is a politician with minimal popularity and limited mandate. His only chance to improve his image is to support a reform in The National Congress Right Liberal Party. It is interesting to note that Temer has the support of most deputies and senators in both houses of parliament.

 

 

 

Michel Temer hasn’t yet announced any concrete steps towards a reform. So far, only about liberal changes in economic policy, privatization, a spending cap in the government and verification of social programs. Temer has  also promised support for the investigation of the corruption scandal of "Petrobras" to invalidate his critics.

 

 

 

Yet, in the aura of skepticism after the suspension of Dilma Rousseff, some good news prevails. The first is that complete political paralysis of Brazil is over and the second is that the long winded votes on impeachment procedure ended. At least until the final decision, which will be in a few months’ time

 

 

The impeachment of  Brazilian President Dilma Rousseff has attracted international attention. The United Arab Emirates (UAE), too, has been closely watching developments in Brazil.  The UAE affirmed the importance of the role of Brazil, which is deemed to be the biggest market in Latin America and a main contributor to supporting the global economy.

 

 

 

 

 

 

 

 

 

Brazil is the UAE’s largest trading partner in Latin America. The impeachment of Brazilian President Dilma Rousseff will not benefit the  UAE or the global economy due to the impactthe political crisis is having on Brazil’s currency. The crisis led to gridlock and worsening sentiment about the possibility of solutions being found anytime soon, even post-Rousseff.

 

 

The Brazilian realty and the country’s main stock index have risen on hopes of impeachment and an end to the country’s political deadlock. However  the process remains dogged by uncertainty.

 

 

The structure of trade between the UAE and Brazil remains lopsided, the consequences of an impeachment, which could lead to criminal cases against the successors of Rousseff, may hamper   long-term strategic plans.

 

 

Looking at the issue from from perspective of the GCC in general and UAE in particular the deepening of the Brazlian political crisis  could cause a sudden drop in regional economies and reduced demand for exports between trading partners in Brazil and GCC states, and increased vulnerability to risks arising from international markets.


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