Deepening Political Risk in Brazil

lula_dilma110710.jpgWho doesn’t love Brazil?  Its raw beauty, bountiful human and natural resources, and strong economy have helped make it the democratic pearl of the BRIC nations.  Few other countries have enjoyed such a prominent winning streak for the national pride, having been awarded the Olympic Games for 2016 in Rio, the FIFA World Cup for 2014, and the all around global appeal of the outgoing two-term President Luiz Inácio Lula da Silva, described by Barack Obama as “the most popular politician on earth.”

Most importantly, the diverse nation of almost 200 million has won the seal of approval from foreign investors, with the Bovespa predicted to rise above 90,000 points next year, a steady 7% GDP growth, foreign reserves topping $250 billion, and recent discoveries of some 15 billion barrels of deepwater oil off its shores.

However with such levels of disproportionate hype, there are some concerns among observers regarding what Brazil will look like without the out-sized personality of President Lula projecting the will of the administration at home and abroad.  His protege Dilma Rousseff, who handily won the presidential election as expected on Oct. 31, was plucked out of obscurity and presented before voters as an extension of Lula himself, and indeed, her victory is seen more as a vote of approval for Lula than a selection based on platform.

Accusations that President Lula is seeking to emulate the Russian model of circumvention around term limits by installing a puppet are not without grounds, and a sense of impending political risk to the calculated balance of democratic governance are making the rounds.

Some of the similarities with Russia are striking:  like Dmitry Medvedev, Rousseff was recruited out of the state-owned energy giant Petrobras – the Gazprom of Brazil – where she served as chair and director.  When Rousseff’s presidential bid was going nowhere (she was virtually unknown to the majority of Brazilians, having never contended for any elected office), Lula took a considerable amount of time out of his presidential duties to accompany her on the campaign trail, successfully leasing his cult of populism to the political newcomer.  Once Rousseff serves a term, the presidency will once again be open for Lula’s return.

Like Medvedev, Rousseff was personally anointed by Lula without consultation or a primary vote from the Worker’s Party (PT), and is known as a stiff and uncharismatic bureaucrat whose dependency upon the former president will be hard to shake off.  Writing on this blog, professor Georges D. Landau argued that problems may arise when voters realize that Rousseff will be unable to replicate the former president’s “kind of highly personalised presidential diplomacy, which favoursform over content (…) It certainly willnot be emulated by Dilma Rousseff, a pallid technocrat who feelsuncomfortable with the vagaries of domestic politics, let alone theinternational variety.

Obviously Brazil is currently nowhere near the Russian model of electoral authoritarianism, with a free and vibrant press, a functioning judiciary, and spirited partisan competition and in the Federal Senate (though flawed, chaotic, and clientelistic, succeeds in legislating through compromises).  On the surface, the political corruption presents a serious problem, but unlike Russia, there are regular prosecutions of the scandals rather than cover ups.

However unlike Medvedev, Dilma has no independent base of support or entourage of liberal leaning advisors – her handpicked team instead represents precisely the elements of the Brazilian political establishment that the international community wishes to avoid. 

Dilma will not be Lula II,” Roberto Mangabeira Unger has told The New York Times.  “She is a differentperson; it’s a different moment, and it’s a different job.”  But whothat person is and how she will govern is largely an enigma.  Thedaughter of a Bulgarian immigrant who had fled persecution by thecommunists in the 1930s, Rousseff grew up in Belo Horizonte in middleclass comfort, complete with piano lessons and French tutors – a far cryfrom the mythic poverty of Lula’s childhood.  As described by reporter Larry Rohter in his new book Brazil on the Rise, during the militarydictatorship she became radicalized, and joined the Marxist-Leninistguerilla group, the National Liberation Command, and later was forcedinto hiding under a false name following a botched bank robbery by herorganization.  Rousseff worked as an economist in a variety of officialposts until she came to the attention of Lula during a 2003 campaign,resulting in a meteoric rise to chief of staff.

Her candidacy was only made possible as a result of corruption scandals which eliminated Lula’s two other successors he had been grooming:  Antonio Palocci and José Dirceu, the latter of whom I would argue could be considered the Igor Sechin of the Brazilian siloviki – corrupt, dangerous, and ruthlessly powerful.  Zé Dirceu, whose intimidating influence over the president-elect became the focus of Jose Serra’s campaign (“A vote for Dilma is a vote for Ze Dirceu,” went one spot), has a seemingly farcical past.  In the 1960s he rose to a high level within the ALN guerilla group, which participated in the abduction of U.S. Ambassador Charles Burke Elbrick, and fled to exile in Cuba where among other murky activities he received plastic surgery to alter his appearance to sneak back into Brazil (not dissimilar from Sechin’s KGB years in Africa).  This year’s election could have been a whole different story if not for his involvement in a massive vote-buying corruption scandal in 2005, forcing a resignation to the backrooms and corridors of power in Brasilia.

The prevailing rumor surrounding Dirceu is that he was incorporated as a member of Cuban secret services during his exile – a role that some critics argue continues today.  While the facts and evidence are patchy on that front, his ties and close relationships with both Hugo Chavez and the Castros is well documented, and there is a sense that Dirceu’s hand was behind Lula’s perplexing embrace of Iran (Lula once shockingly called the Iranian protests “the tears of losers”).  Although with Rousseff, it may be a different story in relations with Tehran, after they spurned her offer of political asylum to a woman that was to be stoned to death for adultery.  Now more than ever, Brazil’s allies and partners are wondering what the country wants to be, what it stands for on the global stage, and what it wants to accomplish.

Rousseff should be given the benefit of the doubt.  Those who have worked closely with her describe an impressive intellectual tenacity of a skillful problem solver.  She has some very big decisions ahead of her regarding the role of the state in a booming economy, and the temptation to politicize Petrobras (which recently funneled almost $70 billion in a share offer) and other state-owned companies and financial institutions will continue to grow.  Whereas Lula was able to enjoy “riding the wave” created by the reforms of his predecessor Fernando Henrique Cardoso, Rousseff will find that hard choices will have to be made to implement further reforms to continue fueling the country’s impressive development.

The cynics might believe that Brazil has gotten a little too much good press for its own good, but it would be a pleasant surprise to see Rousseff come into her own and shake off the burdensome legacy while containing the Brazilian siloviki like Dirceu.  Unlike her predecessor, she will need more than just good luck.