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Will Brazil’s Democracy be Toppled?

By DailyForex.com

Seems every day, another crisis takes place somewhere in the world. The latest distress is engulfing Brazil, the world’s fifth most populous country and eighth-largest economy.

The last calamitous seven days have shaken the country to its core and has left Brazil’s president, Dilma Rousseff, fighting for her political life.

Both former president Luiz Inacio Lula da Silva and president Rousseff, who was appointed by Lula as his successor in 2010, are under scrutiny along with key figures in their Workers' Party government. The investigation — known as Operation Car Wash or "Operacao Lava Jato" — is looking into a massive corruption scandal at Brazil's state-run oil company, Petrobras.

The past week ended with Da Silva being prevented from taking up a cabinet post as a result of his alleged involvement in the scandal and sets Rousseff against impeachment charges in Congress that could see her forced out of office next month. Almost every corner of the political system is under the cloud of scandal including not only Rousseff’s moderately left-wing Workers Party, or PT — which is rampant with serious corruption — but also the vast majority of the centrist and right-wing political and economic factions working to bring down PT which is equally fraudulent.

The week began with the country’s a large anti-government protest and ended on Friday when federal deputies sacrificed their usual Friday day off to begin debating Rousseff’s fate. It was decided that these extraordinary sessions will be held every Monday and Friday in an attempt to force a vote on impeachment by mid-April.

Who is Behind the Protests?

Several critical questions arise about the protests: Who is behind them, how representative are the protesters of the Brazilian population, and what is their actual agenda?

One theory espoused by The Intercept points the accusing finger at the anti-PT power people who, together with the country’s “intensely concentrated, homogenized, and powerful corporate media outlets,” are composed mostly of the nation’s wealthier, white citizens who have adopted animosity toward PT and anything that is closely connected with the party’s anti-poverty programs.

According to the news site, Brazil’s corporate media outlets are “acting as de facto protest organizers and PR arms of opposition parties” with the country’s top four newsmagazines posting covers with inflammatory attacks on Dilma and Lula. The site claims that the business interests owned and represented by those media outlets are almost uniformly pro-impeachment and were linked to the military dictatorship.

The Intercept finds it farfetched to believe that the influential figures agitating for Dilma’s impeachment are motivated by an authentic anti-corruption crusade since the factions that would be empowered by

Dilma’s impeachment are no less implicated by corruption scandals than she is and five of the members of the impeachment commission are themselves being criminally investigated as part of the corruption scandal.

Rousseff’s government was unsteady during the week with the economy set for another year of 3.5% contraction and Congress holding back from passing any legislation. Dilma managed to get Lula sworn in as a government minister, a move that would both strengthen Rousseff’s government and shield Lula from prosecution. But no sooner had the swearing-in ceremony finished, than a court injunction blocked his appointment which was upheld two days later by the Supreme Court.

Government Supporters March

However, in a major show of support for Rousseff and Lula, close to 275,000 government supporters, including trade unions and leftwing movements, took to the streets on Friday night. The numbers were considerably smaller than the anti-government protests the Sunday before, but they managed to impress the media with their force in not accepting Rousseff’s impeachment.

In the meantime, foreign investors are placing their bets against Dilma. Brazil’s currency, the real, which fell almost 50% against the dollar last year as the economy shrank by 3.8%, started to surge last week as Rousseff’s demise appeared more probable and on Thursday, the stock market posted its best performance since 2009.

With its worst recession in 25 years, the political crisis in Brazil is far from over and the question still remains whether a democratically elected left-wing government can ever be maintained in South America.

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