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Brazil's Rousseff is impeached

Donna Bowater
August 31, 2016

After a protracted debate over Dilma Rousseff’s ouster, the country’s first female president is impeached by a vote of 61 to 20. Donna Bowater reports from Brazil that the way forward for the country remains unclear.

Brasilien Präsidentin Dilma Rousseff
Image: Reuters/J. Marcelino

Ever since the lower house voted to open impeachment proceedings against Dilma Rousseff by 367 votes to 137 in April, the writing has been on the wall.

Carried by the momentum of anti-Workers' Party criticism - which has been driven by a failing economy and unprecedented revelations of corruption - many saw the final result as inevitable, despite union-led and popular protests in Rousseff's defense.

But eight months after the impeachment request was first filed, and three months after Rousseff was suspended from office, opinions still diverge about the fall-out from removing the president.

Michel Temer, who was Rousseff's vice president before taking over during her suspension, has now formally assumed the presidency to see out the rest of her term until 2018. Temer was sworn in a few hours after the Senate voted 61-20 to remove Rousseff from office.

Belonging to Brazil's biggest party, the Brazilian Democratic Movement Party (PMDB), Temer's tenure marks the end of 14 consecutive years of Workers' Party rule and the new president is soon expected to represent Brazil at the G20 summit in China.

His presidency will be short-lived as he is ineligible to run for office at the next election following his conviction under campaign funding laws. But in the short-term, his priority will be economic recovery against the backdrop of a severe recession, in which two million jobs were lost over the past 12 months.

In his first words after being sworn in, Temer said he would reduce red tape, cut unemployment, and "put Brazil back on track."

Brasilien Interimspräsident Michel Temer
Interim president Michel Temer, who will now formally assume the presidency for the rest of Rousseff's termImage: Getty Images/AFP/E. Sa

Positive impact on Brazil's economy?

While analysts expect the downturn - prolonged by the political uncertainty of the impeachment process - to continue into 2017, investors are likely to view the end of Rousseff's trial as a chance for stability.

"Most organizations we work with are keen for the process to be concluded," said Emil de Carvalho, executive director of S-RM, a business intelligence and risk consultancy in Rio de Janeiro, who predicted more mergers and acquisition deals as investor confidence recovers.

"Although there are very few Temer supporters per se, the business community appears hopeful about the increased political stability his investiture is expected to bring."

Others point out that Temer's arrival in office back in May coincided with a slight improvement in some areas of the economy, such as in inflation and the strength of Brazil's currency, the real.

However, the outlook remains bleak for the world's fifth largest country with the OECD estimating negative growth in 2016 and 2017, and yet higher levels of unemployment.

Meanwhile, the ongoing Lava Jato ("Car Wash") corruption inquiry, which has uncovered billions of dollars in bribes within the state-controlled oil company Petrobras, is expected to continue to taint Brazilian business.

Brasilianische Börse Bovespa in Sao Paulo
Uncertainty over Rousseff's government has weakened investor confidence in BrazilImage: AFP/Getty Images/Y. Chiba

"The [impeachment] process has been unsurprisingly traumatic for Brazil as it compromised decision-making, investments and the implementation of much needed political and economic reforms," said Eduardo Valle, senior consultant at Speyside Corporate Relations.

"However, Temer and his government, once confirmed as no longer interim, will have to deal with a number of challenges and skeletons in the closet, including the ongoing economic crisis and decreasing market confidence and support."

Many are optimistic that the Lava Jato investigation will continue unearthing corruption under the new regime, while Temer will face the lingering question over the legitimacy of his position and Rousseff's impeachment.

A weakened Workers' Party

However, one of the biggest questions hangs over the future of the center-left Workers' Party, which won four consecutive elections and has led the Brazilian government since the election of Luiz Inacio Lula da Silva in 2002.

While the party is expected to offer a robust opposition to the new government, others fear that the impeachment debacle will be a stigma for those running in local elections in October.

"I think the Workers' Party will survive but not like it is today," said Carlos Pereira, professor of political economy at the Getulio Vargas Foundation (FGV) think tank.

"Only those politicians who are financially dependent on the Workers' Party will remain. Those who have greater electoral and financial viability outside of the Workers' Party will look for other alternatives.

"I believe that coalition presidentialism will return to its normal standard, a standard of cooperation, predictability of behavior, sharing of power, construction of more homogenous coalitions."

Protests erupt for Brazil's Dilma Rousseff

'Impeachment will affect the entire political system'

Yet while the government and the markets try to return to business as normal, the impeachment of Rousseff is expected to inspire a fresh wave of protests by her supporters, who re-elected her with 54 million votes in 2014.

Even before the impeachment vote took place, there were clashes in Sao Paulo where an estimated 5,000 took to the streets on Monday, as police resorted to tear gas and sound bombs, and protesters set fire to tires and trash.

On Tuesday, the Landless Workers' Movement said protesters had closed roads in Sao Paulo, Porto Alegre and Fortaleza. "The acts of today are expressions of resistance against a coup under way in Brazil," the movement said. "A coup against the sovereignty of the popular vote, but also against social rights."

At an anti-impeachment protest outside the Senate in Brasilia on Monday night, supporters warned that Rousseff's impeachment would set a new standard for future elected presidents to be ousted.

"The impeachment will have an effect on the whole political system because the Workers' Party was an essential part of it," said Lincoln Secco, author of "History of the Workers' Party" and history professor at the University of Sao Paulo.

"Today, a significant part of the population is without representatives and loses interest in the elections."

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