BRAZIL GOES OVER THE FALLS

By: Michaell Lange,

London, 24/05/18 –

After 10 years of strong economic growth, nearly full employment rates and a huge prospect for the future, Brazil, the 5th biggest country and the 6th biggest economy in the world, made a sharp turn towards the cliff edge.

Since Dilma Rousseff became the 36th President of Brazil in 2011, a political impasse between her presidency and the congress, brought the government to a halt. Rousseff, a technocrat with no talent for politics and even less abilities to articulate agreements with the opposition, became the pivot of the worst political crises since the military coup in 1964. Her predecessor, Luiz Inácio Lula da Silva, a very charismatic and a master of political articulation, made history by successfully fighting poverty and transforming Brazil’s economy.  Lula however, allowed an old and systematic culture of corruption in the government to carry on freely in order to fulfil his ambitious social policies which lifted over 30 million Brazilians from extreme poverty. Lula left the government in 2010 with over 80% popular approval, and a reputation recognised worldwide for his poverty reduction policies. For the 2010 general elections, Lula appointed Dilma Rousseff as his candidate, and despite never been elected for a public office before, and having very little political experience, Rousseff won the election to become the first female president of Brazil. However, she was very incompetent, she was possibly the most incompetent Brazilian president in history. But, she wanted to combat corruption. For that, she gave total freedom for the federal police to investigate any evidence of corruption in and out of the government. Although, she’s not recognised for that, Rousseff should be known as the mother of the so called “lava Jato” – Operation Car Wash – the biggest corruption investigation in Brazilian history. As the investigations deepened into State and Federal governments, politicians started to panic. The congress united to sort things out by impeaching Dilma Rousseff in a process where 75% of the politicians whom voted for her impeachment, were either under federal investigation or already formally accused of corruption and money laundering. Soon after Rousseff’s impeachment, the president of congress was sent to jail. Lula himself was jailed alongside some of the biggest businessmen in the country.

The new president, Michel Temer, is probably one of the most corrupt man in the land. He also implemented a plan of austerity to reinvigorate the economy by curbing workers rights, raising taxes and cutting social benefits meant to help the poor. It didn’t work. Unemployment rates rose from 4.5% in 2012 to 13% by December 2017. Inflation is at around 10% pushed by almost weekly rise in energy prices. While politicians fight each other in the congress, the economy nosedive. It’s one of the worst economic recessions in Brazilian history and things are rapidly getting worse.

Ten days ago a small group of truck drivers decided to block roads in protest against the rise of fuel prices. The price of Diesel reached R$ 3.80 Reais per litre. On average, a truck (lorry) makes 2.5 kilometres per litre, and drivers are paid about R$2.00 Reais per kilometre, which means an income of R$1.20 ($0.54 Dollar) per kilometre, and that’s before insurance, maintenance, taxes, toll roads, food, and other costs. It’s totally unsustainable!

As of today, with the support of many transport unions from all over the country, truck drivers stopped working nationwide. It’s been four days with only a hand full of trucks being able to deliver goods, these are mainly tankers, escorted by police vehicles to keep airports running. Supermarkets are running out of food and other goods. Petrol stations all over the country are running out of fuel. Perishable food is being wasted. Many slaughterhouses have been forced to stop. Thousands of litres of milk have been wasted daily as there is no way to transport it out from farms to supermarkets. Ports have been unable to load and unload cargo ships as there are no trucks available. Almost the totality of Brazil’s production is transported by road. The strike of truck drivers is causing a total meltdown of Brazil’s economy which could, in a matter of days, develop into a catastrophic social and economic disaster. So far, meetings between representatives of truck drivers and the government have ended without agreement. Authorities are predicting that if the situation remain the same, its a matter of days before the main airports start running out of fuel, and food shortage reach breaking point. If the government don’t find a solution for this crisis quickly, the strike will evolve into a general strike ending either with the collapse of the government or with another military coup. Neither of these options are good to Brazil. To make things more complicated, this October Brazil will vote again on a general election with no candidate with a clear plan to stop the fall before the crash. Many Brazilians fear the country could become another failed state such as Venezuela, many others think Brazil is already at that point. Will Brazil learn the lesson this time? Only time will tell.

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