The political drama in Brazil could result in the demise of the BRICS concept and troubles ahead for Russia’s economic relationship with its biggest trading partner in Latin America.
Dilma Rousseff, President of Brazil, signs the Paris Agreement on climate change at the UN headquarters on Apr. 22. Photo: AP
Attempts to impeach Brazilian President Dilma Rousseff on charges of corruption and embezzlement of budgetary funds have attracted international attention. Russia, too, has been closely watching developments in Brazil, a BRICS member and Moscow's biggest trading partner in the Western Hemisphere.
The question that many people have is whether or not the effort to impeach Rousseff has been ideologically motivated. In late April, she made a short speech at the United Nations, accusing her political opponents of plotting against her and attempting to carry out a coup. She did not receive significant international support, despite the negative consequences of a possible impeachment and change of government in Brazil.
Instead, 342 members of the National Congress (the country’s lower house of parliament) voted in favor of impeachment, making the resolution binding. Now the senators in the upper house are required to vote on this resolution. Despite all this, Rousseff expressed confidence that she would remain at her post at the end of this impeachment process. In fact, in an interview with CNN, she said that she would “fight impeachment.”
Weak arguments of Rousseff’s opponents
Zbigniew Ivanovsky, director of the Center for Political Studies at the Institute of Latin America, says that the reasons behind Rousseff’s impeachment are not immediately obvious. “The fact is that the charges, which have been officially announced, contain no accusations of corruption,” notes Ivanovsky.
Indeed, Rousseff’s opponents were not able to prove any links to the president in the corruption scandal involving Brazil’s largest energy company – Petrobras, and thus, other accusations were brought up to serve as the basis for starting the impeachment process. According to what is publicly known, Rousseff is suspected of misusing public funds, as well as misleading people about the true situation of the state budget.
The well-known Chilean political scientist and sociologist Patricio Navia believes that an independent prosecutor should have led the investigation against Rousseff. If he presented irrefutable evidence of her guilt, then Rousseff should really have been removed from power before her term ended. However, Navia says that no such evidence has been presented, and this entire political process is just an opportunistic maneuver undertaken by the president’s opponents.
Both Ivanovsky and Navia agree that the very investigation carried out against Rousseff is questionable, because it was headed by such politicians as current Vice-President Michel Temer, and the speaker of Brazil’s lower house of Congress, Eduardo Cunha, who has also been accused of corruption and money laundering. “The vice-president, who ran with her during the elections became her enemy,” says Ivanovsky, noting that as a result, the entire country risks being left without any leader at all.
As for Temer, Navia says that he had the opportunity to put forward his own candidacy in the 2014 elections. However, at that time, having considered all the options and taking into account the relatively high level of popularity enjoyed by Rousseff, he chose another option and ran in tandem with her, as her vice-president. Now Rousseff’s ratings have fallen because of the deep economic crisis in the country, Temer has suddenly turned from being an ally to a bitter enemy.
The impeachment of Rousseff would open up an easier path for him to the presidential palace than participation in elections. In case of Rousseff’s early departure, he automatically becomes the head of state.
Moscow’s conspiracy theory about Brazil
However, Russian and Latin American experts have different views as to the origins of the current political crisis in Brazil.
“The basis of all this are the political and economic interests of the Americans, who are not particularly pleased with what has been happening in Brazil over the last fifteen years, when the government was headed, and still is run, by Dilma Rousseff from the center-left Workers’ Party,” said Vladimir Travkin, chief editor of Latin America magazine.
During the U.S. presidency of Barack Obama, Latin America was overshadowed by the Arab Spring, problems in Afghanistan and Ukraine, Travkin says. During that time, Brazil became an active member of the BRICS, and established long-term relationships, including economic and political ones, with Russia and China. The BRICS had become a new platform for discussions, which was an alternative to the current financial system based on the U.S. dollar. According Travkin, this seems to have caused great irritation in Washington.
It would seem that accusing the United States of plotting against Rousseff, is an obvious exaggeration, another conspiracy theory. After all, the Americans were focusing on other regions under presidents George W. Bush and Barack Obama. As a result, they were not able to put Latin America back on the agenda (with the exception of improving relations with Cuba). Moreover, Washington is satisfied with the current level of relations with the leftist government of Brazil.
In 2015, Rousseff paid a visit to the U.S., during which she was able to restart bilateral relations, significantly expanding mutual trade and cooperation in investment and infrastructure projects. This trip alleviated the tensions between Brazil and the United States, which originated in 2013, when Rousseff had canceled a planned state visit to Washington after the U.S. intelligence agencies had been eavesdropping on her telephone conversations and reading her correspondence.
Opportunity for unscrupulous politicians
In Latin America, in contrast to Russia, politicians and experts are not inclined to see the hand of Uncle Sam in every political crisis (with the exception of Venezuelan President Nicolas Maduro, and the populist leaders of Bolivia, Nicaragua and Ecuador).
According to Navia, the Brazilian crisis is the result of behind-the-scenes games of Brazilian politicians. Given the sharp decline of the regional economy and increasing corruption scandals, they saw opportunities to seize power, bypassing the democratic elections. Knowing that in free elections, the voters were unlikely to vote for them, they chose another strategy – digging up dirt on their political rivals.
This trend certainly threatens democracy across the entire continent. Brazil, though divided by a linguistic barrier from other Latin American countries, has a common border with the 10th and 12th largest countries of the continent. Its economy accounts for 55 percent of the GDP of Latin America, and it is home to half of the continent’s population.
Thus, this political earthquake in Brazil would send tremors throughout Latin America, and would potentially have a negative implications for countries outside of the region.
“The impeachment of Brazilian President Dilma Rousseff will not bring any benefits to Russia,” says Vladimir Sudarev, expert on Latin America and professor of MGIMO University. “Brazil is Russia’s largest trading partner in Latin America.”
The expert points out that the structure of this trade remains lopsided – Russia delivers mainly fertilizers, while Brazil provides meats and fruits. However, during Rousseff’s visit to Moscow in 2015, important agreements were signed, based on cooperation in high-tech. In particular, Russia seeks to take advantage of Brazilian experience in offshore oil drilling from ultra-deep deposits, while Brazilian partners are interested in Russia’s space exploration achievements.
The consequences of an impeachment, which could lead to criminal cases against the possible successors of Rousseff, may hamper such long-term plans of Russia and Brazil.
Blow against the BRICS
However, the political crisis in Brazil does not threaten only these projects. It could turn into a strong blow against the BRICS, whose member states are also experiencing serious difficulties, due to the economic downturn in Brazil, as well as slowdowns in China and Russia.
The BRICS, an association of five major emerging national economies (Brazil, Russia, India, China and South Africa) was seen as one of the most promising global economic and trading unions a few ago. However, today it seems to be not in the best shape, with many experts and economists have been changing their views about its prospects. For example, in November 2015 Goldman Sachs closed its fund that was making investments in the BRICS countries.
Moreover, Goldman Sachs economist Jim O’Neill, who coined the term “BRIC,” said that Brazil and Russia could soon “be excluded from this club.” South Korea and Taiwan might replace them and lead to the emergence of the new abbreviation – TICKS (Taiwan, India, China, South Korea, and South Africa). Investors are now putting more of their money to work in the TICKS than in the BRICS. The change of government in Brazil, with its unpredictable implications, can only accelerate this trend.
“Russia had attached great importance to the construction of the BRICS,” says Alexey Portansky, lead researcher at the Institute of World Economy and International Relations. A great deal of money was spent on holding meetings between the heads of BRICS countries in Russia, with Moscow having spent a lot of effort to create a counterbalance to the U.S. Today the financial flows are again moving towards the developed markets, which affects the BRICS as well, the expert argues.