Brazil: The Crisis Deepens

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A critical look at the situation in Brazil

Brazil: The Crisis Deepens

Written by Celso P. Santos exclusively for SouthFront; Edited by Viktor Stoilov

The discrediting is plaguing the government everywhere and undermines the foundations supporting the President. A job which copyrights are reserved by Dilma Rousseff. In December, the loss of good paying stamp of the country by a second international agency of the degree of risk classification, signals another step towards the bottom of the well which shows deeper.

In politics, an impeachment knocks and even if it didn´t come to fruition, the government will come out of this badly injured. Without a minimally reliable parliamentary base, with his party (PT – Workers Party) mired in scandals of corruption and its main ally, the PMDB party, blowing up the bridges of partnership. A chaotic situation, largely resulting in misguided attitudes of the President as regards to the relationship between the Executive and Legislative powers, for a lack of intimacy with the craft of politics and overall fitness for the exercise of authoritarianism. That’s the pride of the company – antipathy and harshness.

Economic crisis, inflation, unemployment

When it comes down to the economy, projections of the financial institutions show a drop in the Gross Domestic Product (GDP). Analysts consulted by the Central Bank envision decrease of 3.19% in 2015. To make matters worse, another negative mark is expected in the upcoming year. Economists also predict a fall around 2.04% of GDP 2016. The confirmation of the projections may cause the Brazilian economy to shrink for two consecutive years, an unprecedented scenario since the effects of the crash of the New York Stock Exchange in 1929.

The unemployment rate will reach 10% in 2016. In August, the unemployment level was 8.7%, the highest level of the series started in 2012. The number of unemployed people reached 8.8 million, an increase of 2 million, which in total is the equivalent to the population of Sweden. The increase in food prices is much higher than the official inflation.

What is the way out? This time, to try to end the crisis, governments avail themselves of the famous ‘fiscal adjustment’. To ensure stability, the elites and the powerful finance parties and candidates in the electoral process. Worldwide, both the coalition governments as the “pure blood” apply these settings. In Europe, they are called “Austerity Plans”.

A bitter tasting medicine

Brazil is no different. Among other measures, the President Roussef implemented the Provisional Measures that hinder access to death pensions, unemployment insurance, social security benefits and salary bonuses. The government has also cut more than $22,5 billion (education, health, social benefits, housing, etc.) this year alone, and intends to recreate the CPMF (financial transaction tax). Recently, there was a cut of $2,5 billion of the Family Bag Program.

In 2014, the Federal Government spent $245 billion in interest and repayments of the Public Debt, representing 45% of the entire budget effectively executed throughout the year. That amount is 12 times what was allocated to Education, 11 times the Health expenditures, or more than double the spending on Social Welfare (data of the Citizen Audit of Public Debt).

Among the society, the opinion polls indicate that never before in the country’s history a President has remained for so long with such a degree of unpopularity. Less than 10% of Brazilians are satisfied with the performance of the ruling re-elected by the majority just over a year. Mood swings caused by evidence that the President, when candidate lied and, therefore, sought to manipulate the choice of the electorate. Act committed in possession of the full consciousness on the part of Dilma Rousseff.

As it turns out, the facts don´t produce good news for the President. Not a result of chance but as a result of work erected by herself.  No hard and coordinated measures, the economic situation in Brazil is getting worse, and amid a recession of major proportions, the country even risks being seduced by the Bolivarian economic heterodoxy adopted by our brothers Venezuelans and Argentines with tragic consequences.

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