In 2001, the British economist Jim O’Neill coined the term BRIC nations to describe the rapidly developing global economies of Brazil, Russia, India and China, with South Africa being added in 2010.
In the first of a five-part series looking at how far these countries have come, Albie Mills discovers how Brazil’s use of the rule of law could have wider implications for corruption continent-wide.
Picture the scene: Tony Blair and John Bercow are in prison. David Cameron has been impeached, Theresa May faces impeachment proceedings and she is about to be wiped out at a general election with around 3% of the national vote in polls. No, it’s not Momentum fan fiction. It’s the British equivalent of what has happened in Brazil since it’s christening as a BRIC nation in 2001.
Much like Tony Blair did in 1997, Luiz Inácio Lula da Silva (Lula for short) walked into the Brazilian presidency in 2003 on a wave of optimism and as the candidate for the Partido dos Trabalhadores (PT), the Brazilian Workers’ Party. He introduced popular policies such as Minha Casa Minha Vida, a housing programme that brought millions out of poverty and popular education reforms such as Bolso Familiar. When he left office in 2011, he had approval ratings close to 85%, almost unheard of in liberal democracies, particularly after eight years in office. The pro-cyclical policies employed by his government brought a vast economic boom, in which Brazil’s GDP grew from $508bn at the start of his term to $2.6trn at the end, that extended into Dilma Rousseff’s tenure and brought her the same kind of adulation that Lula had enjoyed.
However, it has all turned sour since then. Since 2014, Brazil has experienced a mammoth recession and the anger and hardship that this recession is causing has also fed a desire for transparency in government. As in many Latin American countries, slush funds (caixa dois) have always oiled the wheels of government. However, the term ‘slush fund’ doesn’t really do justice to the bribery scandal at the heart of Brazilian government for the past fifteen years. It all centres around Petrobras, Brazil’s semi-nationalised petroleum company, and Odebrecht, Latin America’s largest construction company, responsible for much of Rio de Janeiro’s Olympic infrastructure and Caracas’ metro system. The scheme involved bribes paid to government officials in exchange for construction contracts with Petrobras.
This may seem like nothing new. Indeed, Mariano Rajoy has just been unseated as Prime Minister of Spain for his role in a similar kickback scandal, the Gürtel Case. However, the scale of the scandal in Brazil is what makes this case so terrifying. Lula accepted, personally, a beachfront apartment from OAS, a subsidiary of Odebrecht as well as numerous donations to the PT from Odebrecht. Rather more unfairly, Dilma Rousseff was impeached in 2016 for massaging economic figures, something employed by chancellors worldwide, though she was doubtless swept up by the tide of anger surrounding her party’s actions and the general state of the Brazilian economy. The most heinous examples of caixa dois are to be found, however, in the Movimento Democrático Brasileiro (MDB), Brazil’s centre-right party. Michel Temer, Brazil’s current MDB President, has had impeachment proceedings brought against him for accepting $40m in donations from Petrobras, $5m personally for resolving the tax issues of JBS, a meatpacking firm, as well as obstruction of justice because he heavily reduced the funding for the police team investigating him. According to recent polls, around 81% of the Brazilian population want Temer impeached, which may have happened earlier had the money-laundering, tax-evading ex-Speaker and MDB MP, Eduardo Cunha, not brought impeachment proceedings against Rousseff rather than Temer.
You’d be forgiven for asking where the positives are in Brazil’s acute fall from grace. Well, if Operação Lava Jato (Operation Carwash), the investigation into this particular scandal, succeeds in bringing justice to the mountain of government officials embroiled in this case it will be an example of something rather new in Brazil and, more widely, in Latin America itself: the primacy of the rule of law. Already, it has had a huge effect on Latin American politics. Pedro Pablo Kuczynski has been toppled from his post as the Peruvian President due to his implication in the Odebrecht scandal whilst Mexico’s President Nieto, Colombia’s President Santos and Venezuela’s President Maduro have all been brought into this scandal and, of course Cunha and Lula have been served lengthy prison sentences with, hopefully, one to follow for Temer once he leaves office. Of course, Brazil risks shooting itself in the foot. Operação Lava Jato has often been compared to Italy’s Clean Hands Movement in the 1990s, from whose murky waters rose a certain Silvio Berlusconi. To compare Jair Bolsonaro, the frontrunner in this year’s Presidential elections, to either Berlusconi or, indeed, Donald Trump, would be unfair to both the Italian and the American. The wealthy, far-right senator has tapped into evangelist conservatism in Brazil through his appalling views on abortion and homosexuality and his sinister sympathies for the military dictatorship in the latter half of the twentieth century. Nonetheless, the Brazilian presidential system dictates that in round two, the disparate voters who support a vast range of parties will, most likely, rally around the moderate candidate in the second round, as happened with Emmanuel Macron in his battle against Marine Le Pen in France.
Brazil is learning its lesson in many ways. The typical Latin American lenience towards corruption has been blown out of the water by a case that is far more disturbing than any Brazilian voter could ever have imagined. With the exception of President Maduro in Venezuela, South American government is becoming more democratic and peaceful and lurches less and less from one autocratic solution to the other. The Portuguese term ‘para a inglês ver’ (for the English to see), denotes the mask that Brazil shows to the world while unrest stirs at home, most recently exhibited by the World Cup and the Olympics. This mask has slipped. Brazilian society and politics has changed forever. Let’s hope for Brazil and Latin America’s sake that it is for the better.