What Is Going On In Brazil?

June is proving to be a tumultuous month for Brazilian president, Jair Bolsonaro.  Last Friday saw a nationwide general strike, largely protesting against proposed pension reform which would raise the minimum retirement age to 62 for women and 65 for men.  It would also increase workers’ contributions and require workers to contribute to the pension system for 40 years.

Tens of thousands gathered in cities across Brazil to join the strikes organized by unions and left-wing parties; leaving public transport paralyzed, banks and schools closed, and roads blocked.  Striking students faced tear gas and rubber bullets in Rio de Janeiro where, according to estimates, 100,000 joined the strike.

According to the government, the reform would generate billions, saving an estimated $237 billion over the next decade and help to revive Brazil’s stagnant economy following the 2015-16 recession.  This is not the first time pension reform has been attempted. Bolsonaro’s predecessor, Michel Temer failed to pass similar legislation in 2016. The current version has since been adapted by Economy Minister Paulo Guedes.

Critics argue that the pension reform would put the poorest at a disadvantage.  Teacher, Marcio Pereira de Souza believes that big banks and companies are the reform’s beneficiaries, and, crucially, not the workers.  General Union of Workers (UGT) president, Ricardo Patah went further, asserting that ‘Brazil doesn’t deserve this level of disrespect against workers.’  Politicians have also voiced their displeasure, accusing the government of using budget cuts to pressure Congress into passing what, Socialist Party Congresswoman Lidice da Mata described as ‘a perverse project against workers.’  The government, however, has dismissed the opposition’s claims as a ploy to sabotage Bolsonaro’s presidency by delaying the approval of the reform.

As if alleged sabotage was not enough for the Bolsonaro administration to contend with, Justice Minister Sérgio Moro, the hero of Operation Car Wash, has found himself in his own ethics scandal. Moro was the judge who oversaw the criminal investigation into money laundering, bribery and corruption which challenged the impunity of the country’s elite, including popular former president, Luiz Inacio ‘Lula’ da Silva.  However, leaked messages published by The Intercept on 9 June show Moro giving lead prosecutor, Deltan Dallagnol, advice and instructions on how to proceed with cases.  The leaks also reveal that the prosecutors themselves doubted that the evidence against Lula was sufficient to convict him.

Consequently, there have been calls for Lula to be released, particularly from the former president’s supporters.  U.S. Senator Bernie Sanders, in a statement to The Intercept, described Lula’s trial as ‘a politicized prosecution’ and decried the absence of due process and a fair trial.

Some are now calling for Moro to resign as justice minister, including the Brazilian Bar Association, but Moro is dismissing the credibility of the leaks as evidence.  Moro claims that the messages demonstrate ‘no sign of abnormality of directing of actions as a magistrate’ and that his words were taken out of context.

The general strike less than a week after the Moro scandal began to unfurl does not suggest good things for Brazil’s political landscape.  Economist Cosmo Donato diagnosed a ‘political crisis’, and whilst this may be on the extreme side, Brazil could be heading towards one if Bolsonaro does not start to deliver on his election promise of a better Brazil⁠—free of corruption.  Questions over Lula’s trial could equally cast doubt over other Operation Car Wash trials and disrupt ongoing corruption prosecutions. It would be a shame if the good work done by Operation Car Wash was undone because of Moro’s alleged lack of neutrality on the Lula case.  Moreover, if Bolsonaro was involved in the alleged conspiracy, which his promise to appoint Moro to the Supreme Court when a vacancy became available could imply, last year’s election could be nullified and leave Brazilian voters with a deep mistrust of their politicians.

Lula could become a dangerous opposition figure if the verdict on his trial is overturned.  During the strike, thousands wore t-shirts with Lula’s face on in São Paulo, demonstrating that the former president still enjoys at least some popular support.  The political landscape could become even harder to navigate with the emergence of a strong and unified left-wing opposition and Bolsonaro’s dismissal of his Secretary of Government General Carlos Alberto dos Santos Cruz, a prominent moderate, will only exacerbate the issue.  Santos Cruz was fired for failing to align himself ideologically with the far-right president, indicating that Bolsonaro does not welcome dissenting views and suggest that he could sabotage his own presidency if he surrounds himself with yes-men.

In the same way that a lack of opposition within the government could have grave consequences for Bolsonaro, so too could too much opposition in Congress.  Struggling to pass the pension reform could also mean difficulty passing other reforms, reforms that are needed for Brazil’s economic recovery after the recession.  A political stalemate will not resolve anything and would only make matters worse for Brazil. Perhaps listening to criticism of the reform and adjusting it accordingly would allow it, and other reforms, to pass.

Some form of pension reform is certainly needed.  Last year, the pension deficit hit R$ 195.2 billion ($50.85 billion) and is expected to grow to R$ 218 billion ($54.7 billion) this year.  With an aging population, the situation will only worsen as time goes on. Brazil currently spends around 13% of its Gross Domestic Product on social security while the G20 average is 8%, putting Brazil’s spending well above its fellow G20 nations.  It is understandable that pensions would be a target of reforms intended to kick-start Brazil’s economy after the 2015-16 recession and seen as fertile ground for savings.

Education has also been a target for budget cuts.  Last month saw two protests against the proposed cuts, tens of thousands of teachers, students and academics demonstrated, indicating opposition to the Bolsonaro administration’s method of reducing the deficit.  May also witnessed a rally in support of the president on 26 June, but it does not negate the drop in approval ratings to 29% in the same week.

The steady decline of Bolsonaro’s approval ratings is precisely what makes the Moro scandal and its implications for Lula so dangerous for Bolsonaro.  When the former president left office at the end of 2010, he left with an approval rating of 87% and has been described by Barack Obama as ‘the most popular politician on Earth’.

Lula’s release and return to political life would strengthen the standing of left-wing opposition in Brazil.  A strong opposition could encourage compromise and as John Hopkins University’s Director of Latin American Studies explained, Brazilian presidents do not survive the full four years of their terms without political or popular support.  Hopefully, Bolsonaro will realize the necessity of cooperating with the opposition and Brazil will get the reforms it needs.