Brazil in crisis mode as ruling party sees public trust rapidly dissolving

The bad news just keeps coming for Brazil’s President Dilma Rousseff. On Monday, the treasurer of the ruling Workers’ Party was formally charged with corruption. The day before, enormous anti-government demonstrations filled the streets of more than 160 cities. The economy is faltering, inflation is rising and poverty reduction is at risk of stalling.

Her cabinet are in crisis mode, but they are hamstrung by a fractious legislature and a debilitating scandal at the state-run oil firm Petrobras, which has led to investigations of 34 sitting politicians, including the speakers of both houses of Congress. Just five months into her second term, this is posing difficult questions not just for the president, but for her party – and for Brazil’s 30-year-old democracy.

The latest blow was the formal indictment of João Vaccari, the Workers’ Party treasurer, who is accused of soliciting hundred of millions of donations from Petrobras executives. Prosecutors said they had ample proof that Vaccari knew the money was raised from bribes and kickbacks.

Twenty-six others were charged. More will follow, many of them from the ruling coalition. Rousseff, who was chairwoman of the Petrobras board when much of the wrongdoing took place, is also under pressure. Although she is not under investigation and has denied knowledge of the corruption, members of the public are not convinced.

The Petrobras scandal was high among a long list of grievances that brought people to the streets on Sunday. Estimates of the number of protesters range from hundreds of thousands to more than 1.5 million – huge by any standard. Countless others also came to their balconies and windows to clang their pots and pans in disapproval at government policies. The domestic media reported demonstrations in more than 160 cities.

Workers’ Party struggles

It was a shock for the Workers’ Party, which rose to power through mass mobilisations, but now appears to have lost the streets. Pro-government rallies called by trade unions two days earlier attracted only a tiny fraction of this interest. In São Paulo, the turnout was around 10,000. In central Rio, it was probably less than 1,000.

This was a sad echo of the early years of this century, when the first Workers’ Party president, Luiz Inácio Lula da Silva, drew vast crowds to his campaigns, including students, social activists, union members and anyone hopeful of change. In the past four years under Rousseff, however, the party has increasingly struggled to mobilise even the rank-and-file. The radical left has grown disillusioned by the compromises and failed promises of more than a decade in power, a burgeoning corruption scandal at Petrobras has paralysed the petrochemical and construction industries, choking job creation, and many former supporters who benefited from interventionist social programmes have started to fear they will slip back toward poverty as a result of the worsening economy.

Adding a regional context to these woes, there are signs that poverty reduction is flatlining both in Brazil and Latin America as a whole.

In response to the demonstration of public frustration, Rousseff and her aides are hastily drawing up a package of new measures to address public concerns about bribery, impunity and an economy in the doldrums. But many on the left warn that unmet expectations are the real danger for Rousseff. “The biggest risk for the PT (Workers’ Party) may not be the throngs that occupied the streets, but the crowd that stayed at home,” wrote columnist Eliane Brum, referring to former supporters who no longer feel motivated to march.

Despite Rousseff’s electoral mandate, it will be hard to govern without popular support. “What we have today is an organized and popular right, which can bring thousands of people to the streets, and a fragmented and bankrupt left. This has never happened in the history of Brazil,” said Vladimir Safatle, a philosophy professor at the University of São Paulo. “This is a government that will try to survive, not rule … What we will see now is a complete paralysis, not just of the government, but of the historical development of the New Republic.”

A president ‘virtually under siege’

Rousseff , who has the lowest approval rating of any president in 15 years, has asked for patience in dealing with what she describes as “temporary problems”, but the calls for her resignation or impeachment are growing stronger. There is currently no legal basis for this. Although her close aides have been implicated in the Petrobras scandal, prosecutors said last week that the president is not under investigation. But she may be politically vulnerable because impeachment decisions are made in Congress, where last year’s election weakened the Workers’ Party and left her with a more splintered coalition.

Many on the right sense an opportunity. “The president has become even more trapped. She is virtually under siege, without congressional approval. To see such a situation in only the third month of new mandate means we will have a lame-duck president for a long period,” said Rodrigo Constantino, the president of the Liberal Institute. “The possibility of impeachment has also increased. It is still unlikely, but if the probability was around 10% before, then today it should be closer to 30% and rising.”

The ruling party warn darkly that the opposition is plotting a coup against the president, who won with a narrow but undisputed victory in October. Some among the crowds in Rio on Sunday carried banners calling for military intervention, but such views were on the fringe of bigger rallies in São Paulo and elsewhere. The protests passed peacefully and were described by the justice ministry as “an expression of democracy”.

It has been 30 years since the end of the military dictatorship. Although the flaws in the current system of government, particularly Congress, are increasingly apparent, most institutions remain considerably stronger and less politicised than in Venezuela or Argentina. The danger now is that stagnation and increasingly polarised public opinion could push either the government to crack down on its critics, or opponents to disregard the president’s electoral mandate.

So far that has not been the case. Rousseff and her ministers will hope to placate some of the popular fury with fresh anti-corruption measures, but they are unlikely to prove any more effective than a sticking plaster on a gaping wound. The political paralysis looks set to worsen as the economy continues to flounder. The remaining three and a half years of the president’s mandate will test not only the patience of an increasingly unhappy electorate but also the robustness of a young democracy.