Dilma’s fall: The wrecking of an inspiring left-wing experiment by Alfredo Saad Filho

December 20, 2015
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By: Alfredo Saad Filho (Professor of Political Economy at the Department of Development Studies, SOAS University of London).

Brazil’s Supreme Court has ruled that Congress must restart impeachment proceedings opened by the Chamber of Deputies against President Dilma Rousseff of the Workers’ Party (PT). The deepest political crisis since the restoration of democracy, in 1985, is entwined with the most severe economic contraction in a generation, due to the turmoil in most middle-income countries, and to an ‘investment strike’ targeting the President’s downfall.

The country’s descent has been turbo-charged by a relentlessly negative media campaign, supplemented by a succession of corruption scandals orchestrated by overtly partisan judges and a runaway Federal Police. They are seeking to prosecute every instance of bribery and illegal finance touching the PT, however indirectly. In the meantime, scandals involving the opposition remain un-investigated.

The number of Brazilians who rated Rousseff’s administration “bad” or “very bad” fell to 65 percent, from 71 percent in August, according to a Datafolha poll conducted from Dec. 16 to 17

Corruption in Brazil is always nauseatingly entertaining, but it cannot be eliminated one scandal at a time. Corruption belongs to the machinery of the state; it links politics with business life and it buttresses the country’s inequality generating social structures. It is, then, unsurprising that, in the 1990s, when the PT chose to win elections instead of being honourably defeated, it had to find ways to fund its campaigns, behave ‘responsibly’ and distribute favours, just like the other parties.

Lula’s rise

This strategy worked. Lula was elected President in 2002, starting a succession of administrations that tended to follow the path of least resistance: there has been no serious attempt to reform the Constitution, the state or the political system, challenge the ideological hegemony of neoliberalism, reform the media or transform the country’s economic structure. The PT also maintained the neoliberal macroeconomic policy framework imposed by the preceding administration. The PT’s unwieldy political alliances led to a form of ‘reformism lite’ that alienated the party’s base and provoked the opposition into escalating attacks since 2005.

In the meantime, however, the resources made available by the global commodity boom consolidated Lula’s position. In 2006, the government introduced an economic policy inflection including bolder industrial and fiscal policies, higher public sector investment and stronger distributive programmes. The ensuing dynamics supported Brazil’s rapid recovery after the global crisis. The country was anointed as one of the BRICS, and Lula became a global statesman. Yet, the political divide deepened. The opposition crystallised around a neoliberal alliance led by finance and the international capital, populated by the upper middle class, and cemented by a choleric media.

… And Dilma’s fall

Dilma Rousseff’s first administration (2011-14) tilted economic policy further away from neoliberalism, aiming to shift the engine of growth towards domestic investment and consumption. It introduced capital controls, reduced interest rates, and created new investment programmes. This strategy failed. The global crisis tightened Brazil’s fiscal and balance of payments constraints; quantitative easing in the advanced economies destabilised developing country currencies, and strident critiques of ‘interventionism’ limited investment. Brazil’s prospects deteriorated further as China’s economy cooled and commodity prices fell.

The opposition used these difficulties to justify an all-out attack against Dilma, demanding the restoration of neoliberal orthodoxy. Under siege, Dilma’s economic team leaned back towards neoliberalism, but this policy shift only increased the confidence of the opposition, that redoubled its effort to win the 2014 elections.

In the meantime, the judiciary tightened the screws around the PT. Successive corruption scandals emerged and, in June 2013, vast demonstrations erupted in the country. They encompassed a mélange of themes centred on ‘competent government’ and ‘corruption’, exposing tensions due to the economic slowdown, the government’s isolation and its failure to improve public services.

Dilma was narrowly re-elected through a mass mobilisation triggered by left perceptions that the opposition would reverse the social and economic achievements of the PT. However, Dilma immediately faced escalating political and economic crises. Her desperate response was to invite the banker Joaquim Levy to the Ministry of Finance, and charge him with implementing an orthodox adjustment programme that alienated the PT’s social base. Then another scandal captured the headlines.

The Federal Police’s Lava Jato operation unveiled a large corruption network centred on the state oil company Petrobras and including colossal robbery and illegal political funding. Blanket media coverage focusing on the PT destroyed the government’s credibility and catalysed the emergence of a right-wing opposition demanding Dilma’s impeachment.

Examination of their grievances fills a laundry basket of dissatisfactions articulated by expletives, but there is no plausible legal argument supporting the President’s impeachment. The process is entirely political and degrading for democracy, but it is likely to succeed in one way or another.

What now?

This dégringolade suggests five lessons.

First, under favourable circumstances, PT policies disarmed the right and disconnected the left from the working class. However, once the economic tide turned, the confluence of dissatisfactions overwhelmed the PT, and there was no one left to support its administration.

Second, while the PT governments reduced the income gap between the upper middle class and the poor they also increased the ideological distance between them, as the former drifted to the extreme right while the latter became inert.

Third, despite its volcanic energy, the new right is devoid of support outside the élite. There is not, then, a crisis of the state, but a crisis of government that cannot be addressed in the absence of economic growth. However, growth is unlikely to return while the PT remains in power.

Fourth, the extinction of Kirchnerismo in Argentina, the disintegration of Chavismo in Venezuela, and the trials of the PT suggest that transformative projects in Latin America are bound to face escalating right-wing resistance. It follows that the pursuit of ever-broader alliances is not necessarily stabilising, because they are prone to internal collapse. Instead, the sources of social, political and institutional power must be targeted through ambitious shifts in the economic base, international integration, employment patterns, public service provision, structures of representation and the media.

Fifth, Brazil is entering a long period of instability; the emergence of a new political hegemony may take years, and it is unlikely to favour the left. In the meantime, we can expect constant entertainment reading about surreal scandals. Unfortunately, the stakes are too high for comedy, and the ongoing impeachment process is not about corruption. It is about a right-wing coalition wrecking an inspiring left-wing experiment in one of the most important countries in the Global South.

This article, abridged by the writer for The BRICS Post, draws upon a longer piece posted on the website of SOAS, University of London.