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Mostrando postagens com marcador Brazil. Mostrar todas as postagens
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sexta-feira, 14 de julho de 2017

Rising Powers Quarterly: Brazil's rollback - Andres Malamud

Parece que todo mundo aponta o dedo para o Brasil e diz:
"Querida, encolheram o Brasil!"
Tem um ex-chanceler, que inventou a tal de ativa e altiva -- e que também participou de alguns episódios ainda nebulosos dessa fase -- que vive dizendo que o Brasil se retirou para o seu cantinho.
Existe sim um retraimento, compatível, provavelmente, com a crise econômica desastrosa criada pelos companheiros, que simplesmente destruiram a economia, e mais do que isso, retiraram toda credibilidade externa ao Brasil pelo VASTO, ENORME espetáculo de CORRUPÇÃO que eles protagonizaram. Bando de salafrários.
Paulo Roberto de Almeida
Brazil: Geopolitical Challenges in a Multipolar World - Rising Powers in Global Governance:
 RISING POWERS QUARTERLY
Volume 2, Issue 2, May. 2017


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Brazil: Geopolitical Challenges in a Multipolar World

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Foreign Policy Retreat: Domestic and Systemic Causes of Brazil’s International Rollback

Abstract

Brazil’s rise was a globally acclaimed phenomenon that took place under two consecutive administrations: Fernando Henrique Cardoso (1995-2002) and Lula (2003-2010). Under Dilma Rousseff (2011-2016), though, Brazil’s foreign activism declined dramatically and its international visibility lost luster. This was due to a combination of domestic and systemic factors. This paper identifies these factors and gauges their influence in order to answer a main question: is there anyone to blame or was Brazil’s international rollback bound to happen?

Keywords

Introduction

On September 26, 2016, a historic summit took place in the Caribbean resort city of Cartagena. More than a dozen heads of state, twenty-seven foreign ministers and ten top representatives of international organizations met to witness the signature of a peace agreement between the Colombian government and Colombian Revolutionary Armed Forces (FARC), the oldest insurgent organization in Latin America. The presidents of Argentina, Cuba and Mexico among others, the emeritus king of Spain, Norway’s foreign minister and the secretary general of the UN applauded as president Santos and guerrilla leader Timochenko shook hands. Through live TV broadcasting, the world watched one of the most momentous political events that the region had undergone in decades. It is possible that Brazil’s president, Michel Temer, had been among the viewers since, to be sure, he was not present at the ceremony. Brazil, South America’s putative leader, was absent as its neighbors celebrated the end of the region’s most protracted conflict. Something was wrong.
Between 1995 and 2015, Brazil seemed to emerge as a regional leader and global power (Bethell 2010; Burges 2007; Reid 2014). Brazil’s rise in the region was incarnated in the concept of South America – as opposed to Latin America –, which was masterminded in the 1990s as a response to the North American Free Trade Agreement (NAFTA) led by the United States, and institutionalized in the 2000s through the Union of South American Nations (UNASUR). Brazil’s rise on the global stage was embodied in such acronyms as BRICS (a grouping of large developing economies comprised of Brazil, Russia, India, China, South Africa), IBSA (the three largest democracies of the South: India, Brazil, South Africa), and the environmentally-oriented BASIC (Brazil, South Africa, India, China). Brazil’s emergence was a combined outcome of domestic stabilization, a pro-active foreign policy, a lucky streak of outstanding national leaders, and a permissive international environment. Yet, just when these conditions seemed deep-rooted and Brazil’s rise was taken for fact (Gardini and Tavares de Almeida 2016), everything changed. Two covers of The Economist, the first run in 2009 (“Brazil takes off”) and the second in 2013 (“Has Brazil blown it?”), illustrated the country’s reversal of fortune. A third one (“The betrayal of Brazil”), published in 2016, meant to be the last nail in the coffin.
What had happened? This paper addresses this question in three steps. First, I describe the permissive environmental conditions that allowed for Brazil’s breakthrough onto the global center stage. Second, I examine the domestic resources Brazil was able to mobilize in order to raise its international profile. Finally, I analyze how both environmental conditions and power resources exhausted themselves, which converged with poor leadership to bring about foreign policy retreat.

Systemic Opportunities for Brazil’s Rise1

For a rising power, the permissiveness or restrictiveness of the international system is determined by two factors: polarity and rivalry. Polarity refers to the number of powers that determine the structure of interaction, whether unipolar, bipolar or multipolar. Ceteris paribus, the more the powers the more permissive the system. Rivalry refers to the degree to which the established powers are hostile or friendly to the rising power. This means that opportunities for peaceful rise, especially of middle or regional powers, are expected to improve with multipolarity and when other powers see the newcomer as a potential partner rather than a threat.
In 1991, two events prepared the launching pad for Brazil to take off. At the regional level, the signature of the Asunción Treaty gave birth to Mercosur, a trade deal that upgraded previous agreements with former rival Argentina, bring Paraguay and Uruguay into the group and secured Brazil’s back. At the global level, the collapse of the USSR meant the epitaph of bipolarity and opened the way, after the unipolar moment, for regional and middle powers to step into the forefront.

Regional Rise

Brazil’s peaceful relations with its neighbors are a consequence of having demarcated all its borders at the beginning of the twentieth century. A satisfied country facing no territorial claims, it could afford to build a security tradition based on the absence of strategic enemies. However, the regional scenario used to be far from idyllic.
Until 1979, Argentina was seen as a major security threat, and the possibility of a military confrontation shaped the mission of the Brazilian armed forces. This perception began to change when both countries, under symmetric military rule, signed an agreement on the shared Paraná river basin (Resende-Santos 2002). The following democratic regimes deepened this cooperation path by signing several agreements covering nuclear to trade issues. In 1991, the Common Market of the South (MERCOSUR) was established, and the historic rivalry between Argentina and Brazil was turned into full-fledged regional cooperation. As Argentina ceased to represent a threat, the Amazonian region began to be identified as the main security concern. Following several publications issued by military agencies, a new approach became official in 1996 with the publication of the National Defense Policy (Battaglino 2013). The mission assigned to the Brazilian military was based on a scenario of asymmetric resistance against an extra-regional power intervention in the Amazon, as expressed in the 2005 update of the National Defense Policy and in the National Defense Strategy, issued in 2008. Extra-regional powers are never named but off-the-record statements point to the United States as the greatest source of concern. The national strategy focuses on the Amazon as well as on the so-called Blue Amazon, Brazil’s immense sea shelf and its oil reserves whose recent discovery has influenced the country’s strategic orientation. This involves not only the army but also the navy and air force, who should have conventional capabilities to deny hostile forces the use of the sea and to secure local air superiority (Brasil 2008). Two goals are constant throughout all official documents: keeping the equilibrium between the three forces and fostering the modernization of the military arsenal, often with an eye on the development of indigenous technology.
The absence of enemies in the neighborhood, together with the nonexistence of nuclear powers, have crystallized into a relatively secure environment in which transnational crime is sometimes more pressing than strategic threats. Indeed, trans-border issues such as drug-trafficking and arms-smuggling are increasingly sensitive. Other non-military troubles have sporadically emerged in the neighborhood, such as the negative externalities of domestic instability in contiguous states or the unfriendly nationalization of Brazilian state utilities. The White Book on National Defense, issued for the first time in 2012, reflects the country’s overlapping defense, security and development concerns (Brasil 2012). A significant factor behind this amalgamation is the developmentalist ideology of the ruling coalition, which benefitted from low levels of threat perception to promote the inclusion of the defense area into a national development strategy.
The amalgamation of sectoral interests and policy areas has blurred the priorities of the defense agenda. Hence, the White Book lists four key areas: the (Green) Amazon, the Blue Amazon, the South Atlantic Ocean, and the western shore of Africa. Besides the precedence of responsibility over differentiated geographic areas, each military force has been assigned functional responsibilities: the Air Force is in charge of air control over the Green Amazon and space projects; the Army is responsible for border control and localized intervention in the hinterlands, as well as cyberspace; and the Navy remains in command of the Blue Amazon and its pre-salt oil resources, but also of the country’s nuclear development including its crown jewel, the projected nuclear-powered submarine. As it turns out, organizational politics and developmentalist goals have influenced defense planning no less than strategic priorities.
Besides development, another constant in Brazil’s foreign policy has been the quest for autonomy, whose contours have adapted to changing times. While the country’s stance during the Cold War was labeled “autonomy through distance” vis-à-vis foreign powers and regional rivals, in the first decade after the fall of the Berlin Wall the country’s diplomacy promoted “autonomy through participation” in international institutions and regional organizations (Fonseca Jr. 2004). When Lula came to power in 2003, Brazil’s foreign policy acquired a moderately revisionist tone that was dubbed “autonomy through diversification” of partners and arenas (Vigevani and Cepaluni 2009). “Autonomy through distance” was the diplomatic expression of Brazil’s developmentalism, under which the country accepted the demand for alignment with the United States while trying to use it as bargaining chip for economic advantages. Likewise, “autonomy through participation” implied the adherence to international regimes in order to leverage, not impair, the country’s foreign policy leeway. “Autonomy through diversification” sought the adherence to international norms by means of South-South and regional alliances in order to reduce asymmetries with the developed countries, thus always wedding the quest for autonomy with the goal of development. Unlike most other world regions, security issues were downplayed or combined with other priorities. This calls for attention to context and history, as “where wars have been rare, power has perhaps a softer meaning than elsewhere, and policy options may thus be framed differently” (Malamud 2011: 4). As Hurrell (1998) argues, South America “provides important grounds for doubting that regional ‘anarchies’ are everywhere alike.”
In the current Brazilian view, South America is not just a geographical region (different from Latin America as a whole) but also an autonomous political-economic area, given that U.S. influence recedes as distance from Washington increases. Brazil’s elites consider this subregion to be within the country’s natural sphere of influence (CEBRI-CINDES 2007; Souza 2009), although this perception has slightly changed its value load in recent years as the region was increasingly regarded as a burden rather than an asset (Malamud 2011).
Following Merke (2011), Latin America can be characterized by features that are accentuated in South America. First, in almost two centuries no state has disappeared and only one has been born. Second, the principle of Uti Possidetis (as you possess, you may possess) was agreed on even before the independence from Portugal and Spain and allowed state borders to be delimited much more peacefully than in Europe. Third, Latin America is the world region that contains the most bilateral and multilateral agreements related to the peaceful settlement of conflicts (Holsti 1996; Kacowicz 2005), as well as the “world record of adjudication and arbitration” (Kacowicz 2004: 199). International comparison is stunning: while “there have been some twenty-two instances of legally binding third-party arbitrations or adjudications with respect to sovereignty over territory in Latin America…, similar rulings apply to only one small case in continental Europe…; two among independent states in Africa; two in the Middle East; and three in Asia, the Far East, and the Pacific” (Simmons 1999: 6-7). Fourth, as mentioned, Latin America is a nuclear-weapon-free zone. In summary, state survival has been virtually guaranteed, wars have been rare, and legalization of disputes has been the norm. This does not mean that political violence has been eradicated, but either “there has been a limited conception of force within a strong diplomatic culture” (Hurrell 1998: 532; also Mares 2001) or it has been confined within – as opposed to across – borders (Martin 2006). Therefore, security has acquired a more domestic than international connotation. Brazil is a product of this historical and geographical environment, and as such it carries more resemblances to its neighbors than to either the traditional European states or the new emerging powers.

Global Rise

Brazil’s strategic ambitions were marked by two events. First, the country reverted its longstanding policy of non-interference by contributing troops to, and even assuming the leadership of, the UN Stabilization Mission in Haiti (MINUSTAH), which was established in 2004. Second, it took global center stage in 2010 when, together with Turkey, it sealed a nuclear fuel swap deal with Iran. Indeed, the turning down of the deal by the UN Security Council marked the beginning of the end of Brazil’s international apogee.
In the economic realm, the factor that most boosted Brazil’s foreign reputation was its promotion as a BRIC country (Armijo 2007). A report by the investment firm Goldman Sachs predicted that the combined economies of the BRIC countries would eclipse those of the current richest countries of the world by 2050 because of their rapid growth rates. The report did not advocate the creation of an economic bloc, but eventually the four countries sought to form a “political club” and convert their economic power into geopolitical stature.
Brazil has also shown skills in the realm of commercial negotiations. Although the current World Trade Organization (WTO) round has stagnated, a new collective actor has emerged from it: the Group of 20 (Trade G-20). This bloc of 20-odd developing nations brings together 60 percent of the world’s population, 70 percent of its farmers, and 25 percent of world’s agricultural exports. Its origins date back to June 2003.
The expansion of the Group of Eight (G-8) to the Outreach Five or Plus Five (Brazil, China, India, Mexico, and South Africa), known as the Heiligendamm process and started in 2008, was a further moment for Brazil to celebrate its global rise. Eventually, the country also became a member of the Finance G-20 (more formally, the Group of Twenty Finance Ministers and Central Bank Governors), a group of 19 of the world’s largest national economies plus the European Union.
As to the soft aspects of Brazil’s international activism (Flemes 2007), IBSA became a cornerstone. A limited and “principle-oriented” grouping, the acronym refers to the trilateral developmental initiative between India, Brazil, and South Africa to promote South-South cooperation and exchange that was launched in 2003. This group was publicized as bringing together the largest democracies on every continent of the Southern Hemisphere (Saraiva 2007). It therefore conveyed more powerfully than the BRIC the Brazilian foreign policy banners, such as democracy, respect for human rights, and the peaceful resolution of conflicts.
An even more ambitious dynamic was reiterated at the Copenhagen Summit on Climate Change in December 2009, when the leaders of China, India, Brazil, and South Africa negotiated the final declaration with U.S. president Barack Obama to the exclusion of the European Union, Russia, Japan, and other global powers.
A last conspicuous sign of international recognition of Brazil as an emerging power and regional representative was the European Union’s 2007 invitation for a “strategic partnership.” This is notable because the EU had been reluctant to engage other Latin American countries – especially those of MERCOSUR – individually. The times seemed ripe for Brazil to be considered as a global actor.

Brazil’s Domestic Resources2

Social power, or the capacity to make others do something they would not otherwise, rests on three types of resource: coercive or political, material or economic, and persuasive or symbolic (Poggi 1990; Baldwin 2013). In international relations, the first two are often paired, giving rise to a twofold classification: “hard power” is based on the utilization of structural (that is military or economic) means to influence the behavior or interests of others, while “soft power” refers to the ability to achieve one’s goals through co-optation and attraction rather than coercion or payment (Nye 1990). Ideas, institutions, and exemplary behavior or performance are the main instruments of the latter kind of power. As impressive as Brazil may look to the untrained eye, its hard power is often overestimated and most of its international achievements are based on the soft power deployed by its resourceful diplomacy (Burges 2008).
Despite its vast territory, relatively large armed forces and considerable defense budget, the highest in Latin America, Brazil is not – and has no intention of becoming – a military power. Instead, it describes itself as a peace-loving, law-abiding, and benign power (Lafer 2001; Brasil 2008); in the global scale it is a military lightweight. Brazil does not have, nor according to its Constitution is it allowed to have nuclear weapons, which sets it apart from both the established and emerging powers. Despite being the fifth country in the world by area and population and the seventh by the size of its economy, it is not ranked among the top-10 states when it comes to military personnel, military expenditure, arms exports or imports, or participation in peace operations (SIPRI 2012). Moreover, when measured as a proportion of GDP, its military spending is considerably lower than other South American states such as Chile and Colombia (Figure 1).

Figure 1: Military expenditure as % of GDP, selected South American countries, 1994-2016



Source: Elaboration by Júlio Cossio Rodriguez from data of SIPRI (2016).

Brazil also lacks the economic leverage to buy its way into regional or global leadership. Economic growth has been somewhat low and inconsistent even during Lula’s much-praised decade (Figure 2), and it ranks at the bottom amongst the emerging markets. Physical infrastructure is scant and aging (The Economist 2013), threatening to become a bottleneck for development and a drain on national resources. Furthermore, the country’s position in education, innovation and competitiveness rankings is gloomy. This has raised recurring fears of “the curse of the hen’s flight,” which describes “the centuries-old succession of brief periods of strong economic growth followed by phases of stagnation and depression” (Valladão 2013: 89).

Figure 2: Brazil GDP Growth Rate, 2004-2016


Source: World Bank Data (GDP growth, constant 2010 USD).
Unlike Germany’s position in Europe, Brazil is the largest Latin American economy but not the richest. Argentina, Chile, and Uruguay rank consistently higher in terms of GDP per capita and human development, and Mexico and Venezuela do so intermittently depending on oil prices. As a consequence, Brazilian politicians have found it extremely hard to sell domestically the importance of money transfers to neighboring countries, as this would entail sacrificing poor Brazilians to benefit wealthier foreigners.
Given the shortage of hard power resources, Brazil is one of the few emerging countries to have staked its future on soft power (Burges 2008; Sotero and Armijo 2007). This is based primarily on diplomacy, on the wise use of its cultural charm, and on its growing role as a facilitator and cooperation supplier. Successive administrations have put diplomacy to profitable use, managing to translate scale into influence. They have sat Brazil at every negotiation table to address issues as diverse as climate change, world trade, nonproliferation or cooperation for development. In the region, Brazilian envoys have often mediated in third party conflicts through the least intrusive means available. As is proudly said in Itamaraty, the foreign ministry palace, Brazil has a “diplomatic GDP” that exceeds its economic one: in other words, it can punch above its weight because of the high quality of its professional diplomacy. Yet, it was presidential diplomacy that turned out to be decisive in fostering the country’s international reputation (Malamud 2005; Cason and Power 2009). No other country can boast a lucky streak of two exceptional presidents over sixteen consecutive years, plus the initial hopes raised by the election of the first ever woman as president. World class scholar Fernando H. Cardoso and iconic metal worker Luiz Inácio Lula da Silva became symbols, in themselves, of a vibrant and progressive society. Moreover, both of them manifested an impressive dexterity at foreign policy management. Three able foreign ministers, two of which were professional diplomats, contributed to endowing Brazil with towering global prestige. Alas, lucky streaks do not last forever.
Inaugurated in January 2011, Dilma Rousseff was Lula’s choice as the candidate of the incumbent Workers´ Party. Most observers believed that she would follow in his steps, whether on domestic or foreign policy issues. In keeping Lula’s top foreign policy advisor, Marco Aurélio Garcia, Dilma hinted at continuity. However, her visible lack of charisma and her disinclination towards foreign affairs had led analysts to suggest that her foreign policy would be “less of the same” (Malamud 2011). Both handicaps could have been compensated by an able foreign minister empowered by presidential delegation (Amorim Neto and Malamud, forthcoming); yet, Dilma chose a different path. If Lula had only one foreign minister in eight years, Dilma had three in five years – and never fully trusted any of them. Foreign policy retreat was built into the president’s personality; yet, the rollback of Brazil on the global stage was not only due to poor leadership. Dilma’s mismanagement of foreign policy (Cervo and Lessa 2014) combined with structural conditions, both systemic and domestic, that were already becoming unfavorable to Brazil.

The Underlying Causes of Brazil’s International Rollback

The end of Brazil’s golden age does not hinge on a single cause but on a combination of six. As shown above, they can be classified according to two criteria: the opportunities or restrictions provided by the international system, and the type of domestic resources involved. Table 1 displays the resulting matrix of conditions.

Table 1: Matrix of Conditions for Brazil’s Rise



Outcomes Depend On


Opportunities
(Structure)
Resources
(Agency)
Dimensions of social powerPolitical
(Coercive)
Existence of an alternative world power to the hegemonMilitary and technological superiority
Economic
(Material)
Global markets’ demand for Brazilian manufacturesDiversified and competitive productive structure
Ideological / Normative
(Symbolic / Persuasive)
Global space for innovative, green, soft, gentle powersAppealing cultural production and inspirational leadership
The political opportunities for Brazil to rise have been studied in depth by Rodriguez (2012, 2013). He shows that every time that the country increased its international prominence throughout the twentieth century, the underlying reason was the margin of autonomy allowed for by the emergence of a contending power to the global hegemon. Nazi Germany during the interwar period, the USSR at the apogee of the Cold War, and China at the beginning of the 2000s created the conditions, by either holding or distracting the US, for an otherwise weak regional power to intrude into global affairs. If this analysis is correct, China’s current retraction and its unwillingness to geopolitically challenge the US (Urdinez et al 2016) set a limit to how far Brazil can or will dare to go. The only chance to recreate an enabling environment would be for India to come forward as a global power that challenges the status quo, a highly unlikely event in the foreseeable future.

Figure 3: Composite Index of National Capability (CINC), selected countries, 1960-2012


Source: elaboration by Júlio C. Cossio Rodriguez from data of Singer et al (1972, v5.0).
Economic opportunities determine how Brazil connects its productive structure with global markets. By the mid-twentieth century, it did so as a dessert producer: sugar, cocoa and coffee made up to 85% of its exports. After the so-called economic miracle of the early 1970s and the currency stabilization of the early 1990s, Brazil became an exporter of manufactured goods, with the latter accounting for 60% of total exports. After that, the emergence of China led to a reprimarization of exports (Figure 4a) – and, in relative terms, of production. China displaced the developed economies of the West, mainly the US, as the center of a new dependent relationship where Brazil occupied the same peripheral position as ever. Henceforth, Brazil’s emergence as an agricultural powerhouse had deleterious effects upon its productive structure. When China’s growth halved, in the 2010s, Brazil’s economy plummeted (Figure 4b). An international opportunity had inadvertently turned into a restriction.

Figure 4a: Brazil-China Asymmetric Interdependence

Figure 4b: Brazil-China Growth Correlation


Source: elaboration by Joaquim Cadete from data of the World Bank and Brazil’s Central Bank.
Ideological/normative opportunities are more slippery than political and economic ones. After Trump’s retreat from the Trans-Pacific Partnership (TPP) and his threat to withdraw from the Paris climate agreement, it is less clear than ever whether there exists a global demand for softer, greener, gentle powers – even less whether there is still appeal in boasting to be a “rainbow nation.” In the new perplexing scenario, it is hard to see how Brazil could insert itself successfully into a new, attractive narrative.
Domestic resources do not foster optimism either. The geopolitical resources Brazil counts on are reduced. A military dwarf in global terms, it devotes less than 1.5% of its GDP to defense. Brazil’s troops numbered around 320,000 in 2012, a figure closer to those of its smaller neighbors than to those of the world´s great powers (Figure 5). Furthermore, as more than 80% of the military budget is spent on salaries and pensions (FIESP 2011), logistical means are both inadequate and antiquated. Plans to build a nuclear-powered submarine have been allegedly underway since 2008, when a contract was signed with France. However, there are no prospects that the project will be completed before 2027 – if ever. Given Brazil’s military weakness, its only advantage is that it faces no strategic threats. Yet, its low military investment means that the country is unable to project force or influence strategic decisions far away from its own borders.

Figure 5: Military personnel in selected countries, 1930-2012


Source: elaboration by Júlio C. Cossio Rodriguez from data of Singer et al (1972, v5.0).
Economic resources are also scarce. Participation in global trade is much smaller than the country’s world share of GDP or population: it stands slightly over 1% vis-à-vis 3%, a figure lower than fifty years ago that puts the country at 22nd in world rankings (WTO 2012). The re-commodification of the economy and exports (Figure 6a), together with the asymmetric association with China, has become a burden for development. Underdeveloped infrastructure, technological backwardness, and limited innovation compound a gloomy picture (Figure 6b). Without either a productivity revolution or the advent of a new giant market for its commodities, Brazil’s economy is not expected to reach consistent growth in the coming years.

Figure 6a: Brazilian Exports by Economic Sector, 1964-2012


Source and elaboration: MDIC/SECEX

Figure 6b:


Source: http://www.economist.com/news/special-report/21586680-getting-brazil-moving-again-will-need-lots-private-investment-and-know-how-road, accessed 5 July 2017.
Finally, soft resources of power have been depleted. If humanitarian interventionism or international cooperation for development were once thought of as a means for regional leadership and “global protagonism” (Harig and Kenkel 2017; Pinheiro and Gaio 2016; Stuenkel 2011), those times seem to be over. Dilma drastically reduced the budget for humanitarian assistance and cooperation aid already in 2013 (Figure 7), and her successor continued this trend. The unhappy end of Rousseff’s mandate, which combined her lackluster performance with the darker reputation of her accusers, not only stained Brazil’s standing abroad but also produced an inward looking reflex that manifested itself in a wider retraction from global affairs. Even though Brazilian citizens chair important organizations such as the WTO and the Food and Agriculture Organization (FAO), Itamaraty’s influence has receded to unexpected magnitudes.

Figure 7: Brazil’s Humanitarian Donations to African Countries, 2010-2014


Source: http://www1.folha.uol.com.br/mundo/2015/03/1606466-brasil-recua-e-reduz-projetos-de-cooperacao-e-doacoes-para-a-africa.shtml, accessed 2 July 2017.
The rise of Vice President Michel Temer to the presidential office, which followed the ousting of Rousseff through congressional impeachment, was the last nail in the coffin of a twenty-year period of international prestige. Not only was Brazil nowhere to be seen when most of the Latin American presidents and several world leaders convened in Colombia to witness the signature of the peace agreement between the government and the FARC, but a few months later Temer declared that he would not attend the 2017 summit of the G20 in Germany due to domestic issues. On the international stage, Brazil no longer bites, nor does it kiss.

Conclusion

Insufficient resource endowment and cumulative policy mistakes mounted over increasingly unfavorable international conditions to produce foreign policy retreat and, ultimately, Brazil’s international rollback.
A permissive systemic structure took root between 1991 and 2011: the end of the Cold War, the emergence of China, and a global appetite for softer forms of power fostered Brazil’s rise. The rainbow giant seized the opportunity by capitalizing on its material – mainly natural – and symbolic – mainly cultural – charm, potentiated by shrewd presidential and professional diplomacy, to get a seat at every negotiating forum that opened up. However, its domestic resources were exhausted almost at the same time as the international conditions reverted to unfavorable, mostly due to the global financial crisis and China’s change of development model. The combination of unfavorable conditions at home and abroad determined Brazil’s drastic rollback from the international stage.
True, Brazil still is – and is expected to continue to be – a large country, a regional power, and an actor with a global voice. If demography is destiny, Brazil will eventually rebuild an international position of prestige for itself. In the foreseeable future though, its chances to become a regional leader or a global power are rather dim.

Notes

1 This section draws partially on Malamud (2011), Malamud and Alcañiz (2017) and Malamud and Rodriguez (2014).
2 This section draws on Malamud and Alcañiz (2017)

Acknowledgements

A previous version of this paper was delivered at the 58th ISA Annual Convention, Baltimore, Maryland, February 22-25, 2017. I am grateful to Isabella Alcañiz, Octavio Amorim Neto, Anna Margheritis, Iver Neumann, Anthony Pereira and two anonymous reviewers for comments and encouragement, and to Júlio Cossio Rodriguez for his invaluable research partnership. I acknowledge the support of FCT project UID/SOC/50013/2013 and ITN-Marie Curie Actions PITN-GA-2013-607133

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About the Author:

Andrés Malamud

Andrés Malamud (PhD European University Institute, 2003) is a senior research fellow at the Institute of Social Sciences of the University of Lisbon. His research interests include comparative regional integration, foreign policy, EU Studies, and Latin American politics. His work has been published in Latin American Research Review, Cambridge Review of International Affairs, Journal of European Integration, Latin American Politics and Society, and European Political Science among other journals.

segunda-feira, 26 de junho de 2017

Brasil: existe uma crise da democracia ou do sistema político? - Paulo Roberto de Almeida


Brazil as a Failing State
(or, is it already a Failed State?) 

Paulo Roberto de Almeida
Political sociologist, university professor (Uniceub)
 [draft paper]

1. Brazil: the democracy that failed
I started this draft text, for the purpose of delivering an oral statement, some three months ago, around March. At that moment, the second title was not the question of Brazil being already a Failed State, but just a doubt, expressed with this almost affirmative interrogation: “will it become a Failed State?” It may be the case, judging by recent developments in the last few weeks, in the political, judicial, and police spheres, all of them very busy with too many cases of corruption, protests, and institutional impasses. So, in less than three months, I had to rephrase and strengthen my title, just to emphasize the true state of political affairs in my country: the scenario is deteriorating rapidly, to say the least.
With this new introduction, in the form of the above paragraph, I will have to be direct, sharp and may be unduly severe: Brazil is, if not already a Failed State, at least a Failing State, in many dimensions of this concept. In fact, its political system, under whatever criteria we may choose, has already failed. This is the result not only of the kleptocratic behavior exhibited by some of its members, but also because of the very well known rent-seeking attitude of many, if not all, representatives of the Brazilian elites, entrepreneurs, politicians, trade-unionists and the rest. The present scenario is on the verge of anomie, not only because of episodic factors, such as the current political crisis or economic recession, but because of a structural deterioration of Brazilian institutions, despite an apparent resiliency of its formally democratic architecture. The true Brazilian crisis nowadays is of a moral order, the very glue that maintains a nation united behind its values and principles: Brazilian citizenship today does not trust anymore any of the three branches of government, the Executive, the Legislative and the Judiciary.
Brazil is a deteriorating polity that, in view of the lack of any real consensus around the necessary reforms in its ailing institutions, promises to continue to be weakening gradually for the next few years, towards its first two hundred years of existence as an independent nation, and irrespective of the general elections in 2018. Indeed, in 2022, income per head of the average Brazilian will be the same, perhaps even less, than its level attained ten years before; the state of its public debt will be on the verge of bankruptcy, if not already insolvent; and the ominous fragmentation of its political system will be worsening to the point of a governance disaster.
Those are threatening features that pale when confronted with the moral dereliction of our so-called political elites, together with the promiscuous capitalists and bankers that have been funding the former, in a rare neglect of duty (perhaps it was intentional) for a country formally modern, proud of its democratic institutions, and possessing one truly sophisticated State among developing countries of the Western Hemisphere, if not in the global South. Has Brazil become a toxic State?
The question is this: is it true that we are a consolidated democracy, possessing a functional State, and exhibiting strong institutions, capable of cleaning the rotten apples that sometimes embeds and plagues the governing and representative bodies of this State?  I am not sure of that, in view of last two years of troubling developments in the sphere of governance. Taking into account the whole set of evidences raised by the Federal Police, the Public Prosecutors and the Judiciary, not only limited to the very well known “Car Wash operation”, my preliminary conclusion can be only one: if Brazil is not yet in a condition of a Failed State, it is already showing various evidences to be a Failing State. How did we arrive at this horrible state of affairs, of not having a stable government and a performing representative institution, even after applying the second impeachment procedure since the early nineties, or perhaps precisely for that?
In one dimension, that of public accounts and macroeconomic management, Brazil has had a perfect storm, a self-inflicted crash course on how to destroy an entire country in half of a presidential mandate, and on how to implode a whole economy in less than four years, even if the process took a little longer to be built. In another dimension, that of its polity, Brazil showed itself as a well prepared country in terms of erosion of normal rules of governance, a perfectly fitted country for a schizophrenic process of dereliction (especially in the moral sense of that word).
In terms of the social impact of this political decay, there was an improvised combination of corrupt representatives and a greedy class of high State technocrats that lead the game towards the 2016 impeachment, which did not inhibited the continuing political crisis afterwards. Just to mention the State bureaucracy, almost privileged as the French enarchie, it is easily recognized that we do have many mandarins who are perfectly able and capable to conduct a very crude process of deepening of the already very unequal income distribution in Brazil, through very high wages and an infinite number of benefits that take a large part of the current expenditures in the budget. And, last, but not the least, during the entire Lula years and the disastrous one and half mandate of his successor, we assisted a truly “scientifically planned” scheme of high corruption in every sphere of the public administration, going each time more high and deeper in the scale of an organized gang robbery during the last decade and half.
How we could arrive at that? How we became so recklessly delinquent in terms of political governance and economic corrosion? Why our Weberian State was so rapidly and irresponsibly destroyed by a gang of political maffiosi that took the country by assault from 2003 up to 2016 (at least)? How could Brazil take a leading role in the unhappy championship of world corruption? How a bunch of confirmed kleptocrats stole the State and the Brazilian society during so many years? What all that means for technocrats like me, for academic people like you, for all of us? What we, Brazilians and our foreign friends, can do in face of it?
The reasons for that dire state of affairs are multiple and variable, along the last two or three decades, but can be summarized in two or three explanations: one is the very backward Weltanschauung – if the concept applies – of our political elites, which does not merit this qualification, as they are mediocre, ill-prepared, totally rent-seeking and opportunistic; the other is the schizophrenic character of our Constitution, a true monument to political demagoguery and economic populism, constantly refurbished and expanded by a bizarre coalition of professional politicians and Gramscian literati, both acting on the premises of politically correctness; and, the third reason, is certainly the conquest of the State by a truly criminal organization acting under the disguise of a political party. This third factor acted as the decisive trigger for the first two to be pushed forward, and exert a portentous influence on the whole process of deterioration.
Let’s examine each one of those features, and try to devise a realistic picture of the Brazilian political decay over the last two decades, the irresistible descent into economic anomy and political chaos that characterizes the current state of affairs in the country. I will be perhaps a little bit impressionistic, more than crudely objective, but I will try to support my arguments with empirical data and statements of fact. A brief exposé of the moral, political and economic situation is necessary to present a real picture about the awful situation we are enduring right now.
To be true, it is impossible to understand the political history of Brazil since the beginning of the millennium if we do not admit that Brazil and the Brazilians where governed, since 2003 and up to May 2016, by a criminal organization, one mafia-like association that implemented a carefully plan to rob the State, private and public companies and the entire population during its entire stay at the head of the Executive.

2. The scenario built by the new Barbarians
Brazil became, without any intended or declared purpose to do so, one of the most corrupt political systems in the world, a distinct characteristic that I’m not proud at proclaiming it openly. Ours is certainly the most corrupt political system in our own Hemisphere, and one of the most active protagonist of large scale corruption in other continents, most notably in Africa. This was done after that one of the most corrupt companies in the world, the construction company Odebrecht, established an almost complete network of corrupted practices in Africa and in many countries in Latin America. This was done in some countries in particular, that is, African Portuguese-speaking dictatorships, for one side, and the so-called Bolivarian States in our continent, for the other, besides of course the most ancient dictatorship in the region, the tyrannical regime of the Castros in that unhappy island of Cuba. Those who doubt the extension of the money laundering, traffic of influence and recurrent bribery involved in all kinds of Brazilian undertakings abroad, during the Lula era, have better to read the book by the journalist Fabio Zanini, Euforia e Fracasso do Brasil Grande: política externa e multinacionais brasileiras na era Lula (São Paulo: Contexto, 2017), where some of the biggest operations lead by BNDES – US$ 14 billion, for more than 500 projects in 11 countries from Africa and Latin America – are carefully documented.
It is not a novelty nor a surprise to verify the extraordinary coincidence of this large web of corruption with the activist foreign policy that we have had over more than a decade, more precisely between 2003 and 2016, when the so-called “active and proud diplomacy” – ativa e altiva – was in place, largely conducted by Mister Lula, by the foreign minister Celso Amorim and other Worker’s Party apparatchiks. They have done that with the total cooperation of the company King of Corruption in Brazil and elsewhere, Odebrecht.
No, I’m not blaming Odebrecht for our entrenched, pervasive and extended corruption, a feature with which this company is more than familiar since three generations at least. I’m blaming for that the very heart of the matter, the mafia-like political party that was in charge of the State from 2003 and 2016, and which profoundly transformed the nature and the functioning of the political corruption in Brazil, making it an all-encompassing, an incredibly vast, a widespread undertaking, a scientifically calculated and implemented enterprise, enforced without exceptions in every sector of our public life for the whole duration of that period.
That was not the sole product of this criminal organization. It was also responsible for the worst, longest and more profound recession of our economic history, this one which provoked two successive falls in the GDP growth rate, making them present minus 3,8% in 2015, and minus 3,6% in 2016, provoking a decline of 10% in our average income per head, in the whole producing what I have called The Great Destruction, after other experiments known as Great Depression or the Great Recession (see Paulo Roberto de Almeida, The Great Destruction in Brazil: How to Downgrade an Entire Country in Less Than Four Years”, Mundorama, n. 102, 1/02/2016, link: http://www.mundorama.net/2016/02/01/the-great-destruction-in-brazil-how-to-downgrade-an-entire-country-in-less-than-four-years-by-paulo-roberto-de-almeida/).
The particular feature of our current economic crisis is that it didn’t emerge out of an international crisis, a world economic shock or anything of this kind. It was entirely created in Brazil, 100% home made, by the incredible incompetence and corruption of the PT’s apparatchiks and their allies in the economic private and public sectors. According to one of our best economists, Alexandre Schwartsman, Brazil is going through a retrocession of seven years in only three years, counting with the virtually no growth this year of 2017. He denounces the argument of PT’s economists that blame the current state of economic affairs on the “austerity measures” being taken by the acting government. That is utterly false, as the public expenditure was maintained at their high levels of recent years, including a raise in social security payments and similar disbursements. Investment of course was cut down to minimal level, if any today, but in fact it was collapsing since 2013, thanks to the complete mismanagement of the national economy since the impeached president started to have a say in public policies (and I put that since the very beginning, middle of 2000s).
The fact is that Brazil was thrown in unsustainable fiscal policies since that moment, which combined with a spectacular rise in State intervention to produce what we have today: the worst recession in our history, which risk being with us well beyond 2020, probably receding only after we commemorate our first two centuries of an independent nation, in 2022. How we came at that? Some of the blame comes from the endless love that Brazilians have for the State, any State, at any point of our history. But much more came out from the exceedingly great obsession that lulopetistas and their allies have shown in connection with a undisguised desire for control of the society and its economy, which can be explained by the truly Stalinist nature of this party, or at least, of many of its leaders (who could be said to be a kind of neo-Bolsheviks, eager to become the bourgeoisie of third persons capital).

3. A schizophrenic Constitution, deepening our failures
Much, if not most, of the problems that afflict an already completely failed political system, and a business environment that is a kind of Dante’s inferno for the entrepreneurs, derive and arise from our Constitution. The 1988 Chart, described by one of its distinguished makers, as a “citizen Constitution”, is in fact the strongest enemy of the common citizen. Many features give the rationale for this harsh judgment. First, its prolixity, absolutely exclusive in the annals of the world constitutional history: hundreds of articles, hundreds of caputs and paragraphs, dozens of items and sub-items, and plenty of transitional dispositions, that regulate, probably abusively, each and all aspects of the Brazilian life, of the life of its citizens. The citizenship has strong enemies, first of these a powerful bureaucracy, besides the corporatism, the nepotism, the patrimonialism, and every other disease of our political and electoral system. Second, the intrusive character of the economic dispositions of the Constitutions, perpetuating the old Portuguese centralism and dirigisme, according to which no undertaking, no private initiative, no economic entrepreneurship can be performed without an official permission, a royal edit, a State decree or any other form of government rule. Third, by its delusional benefits given to every one of the Brazilian citizens – a generous social security system, especially towards public officers, a kind of health and educational free lunch (everything is open to all citizens, irrespective of its costs), and many other features, of course utopian by nature – the Brazilian Constitution constitutes a perfect recipe for a permanent rise and expansion of public expenditures, a circumstance that responds for the current recession and the almost certainty that with this kind of constitutional arrangement a sustained economic growth is an almost impossibility in Brazil.
The fact that the Constitution was discussed and enacted before the fall of the Berlin Wall, that is, the complete failure of socialism and State guidance in general, explains some of the lasting negative effects of its most important political and economic dispositions. But that was not enough: even with the demonstrated schizophrenic character of many of those economic and political dispositions approved in 1988, in the quarter of century afterwards, the institutional scenario in Brazil was compounded by a hundred new constitutional amendments, modifications, additions and substantive changes in the original text, giving new rights, innovative benefits, another set of entitlements, all consolidating a web of privileges and favors, politically, economically, if not morally questionable, making of the Constitution a perfect device to obstruct a sustained effort for the development of Brazil.
Fernando Henrique Cardoso, immediately after inaugurating its first mandate, started to change, and eliminate, the most evident discriminatory dispositions of the Constitutions towards business activities and foreign investments. Unhappily, he could not privatize the giant dinosaurs of the public system, the gigantic Petrobras, and the whole set of State banks (do Brasil, Caixa and BNDES) that were at the center of the monstrous corruption developed in the following years, revealed by the Car Wash investigations. Lula and Dilma administrations were totally comfortable with the gigantic superstructure of the Brazilian State, and with the “detailed rights” given by the Constitution to “all citizens” (but reserving some of its best benefits to the mandarins of the Republic, and the Nomenklatura associated with the governing party, political allies, and apparatchiks in general. Brazilian Constitution offers ample chances for corruption, influence peddling and all kinds of traffics inside and outside of.
Recently, three personalities from the civil society (Modesto Carvalhosa, Flávio Bierrenbach, and José Carlos Dias) proposed, in a newspaper article (“Manifesto à Nação”, O Estado de S. Paulo, April 9, 2017), the elaboration of a new Constitution, based on those simple facts:
Deriving from an agreement among the forces that disputed power after the dictatorship, the 1988 Chart was filled with ad-hoc arrangements (casuísmos) and corporative interests. It has established an absurd political system that feeds itself from a pseudo party system, excessively fragmented and captured by the interests of corporations and politico-criminal factions. This makes excessively costly the governance, creating a toxic relationship between the branches of government, which reinforces corruption, influence peddling and the devastating shortfalls in the public accounts.
(…) The incurable vices of the 1988 Chart were compounded by anomalous 95 amendments since its promulgation, whereas there are more than one thousand new proposals of constitutional amendments [waiting discussion].

They pledge then for an original, independent, exclusive and autonomous Constituent Assembly, because the normal Congress and the representatives elected under the current rules would not be able to properly change the existing Chart in every inconsistent disposition it exhibits in its present form. They propose, also, a complete set of political reforms in order to eliminate the incongruences of the political system, including the Party Fund and the public financing of campaigns.

4. The conquest of the State by the political mafia of PT
Brazilian political decline is not exclusive in historical record. Before us – and certainly after our sad experience – many other countries meet similar trajectories full of failures, breakdowns of institutions, economic catastrophes, diplomatic fiascos and were put on the verge of bankruptcy, if not national disasters. Mussolini’s Italy, Hitler’s Germany, Peron’s Argentine, Imperial China, African dictatorships, Latin American caudillo states, Oriental despotisms, we can identify many other disappointments on the path of normal processes of political and economic development. What characterizes all and each one of those breakdowns in normal statecraft is the absence of the rule of Law. And that is what distinguished the successive governments of PT, between 2003 and 2016, and perhaps still exercising protracted effects in the current political system.
When I started to work with the Presidency, in 2003, not as a diplomat, because I was considered a persona non grata in Itamaraty – having signed some too realistic articles on the ordinary leftism of the PT, and its anachronistic diplomacy – but as a simple technocrat, in the Strategic Affairs Unit, leaded by one of the governing troika (all three left the government after a few years), I was surprised, first of all, by the monumental incompetence of the apparatchiks engaged in Lula’s government. In the first two or three years – before I left the Presidency myself – the most plausible explanation for the complete ineptitude of the first measures taken by his governments that I could found was that the apparatchiks were equally clumsy, incompetent, totally unprepared for the normal work in the State bureaucracy. I was completely naïve, but after the first large-scale scandal, the Mensalão crisis, in 2005, I took a more realistic picture of what was happening: the ineptly devised measures, decrees, provisional acts, and other regulations by Lula government were not the result of the stupidity of those freshly arrived in the government. No! They were the intended purpose of their peculiar expertise in just one thing (or many of the sort): theft, robbery, fraud, pilfering, etc.
Current and future historians of Brazil have a large and difficult task ahead: revise and rewrite our political history between 2003 and 2016 (and probably also before and after of those dates). This revisionist endeavor is imperative for one single reason: it is impossible to explain many of the undertakings, initiatives, and other high-ranking measures taken by the three and half lulopetistas governments if we not take for granted the fact that Brazil and Brazilians were governed during those years by a mafia-like gang of criminals, a group of political crooks who took the country as hostage of their felonies and totally delinquent governance. I made very quickly the complete circle of my explanation for those apparently unexplainable inept measures adopted since the first days of their administration: the “economic crimes” committed in almost every sector of the State action – energy, labor, industry, social affairs, communications, including foreign policy – were not the side-effect of inconsequent and unprepared apparatchiks, but they were the direct result of purposeful activities pushing towards the assault of the State, its state companies, not forgetting the very nation, private companies and citizens.
What was the result of the lulopetista dominance over the State? Public organizations and associated businesses under this scheme suffered the plunder by the neo-Bolshevik party in order to consolidate the intended monopoly of power they were planning since the beginning. Those actions were not something improvised, but common crimes, directed to the logical consequence of those acts: amass a vast treasury of financial resources, with which to keep the State, its institutions, and the nation, under their control. And the treasury is vast in Brazil.
There are 154 federal state companies in Brazil and hundreds of subsidiaries: Petrobras, for instance, has 43 subsidiaries (some being sold now, after the most awful plundering ever seen in its 60 year history). Eletrobras, the energy holding, has almost 40 dependent companies, Banco do Brasil almost 20, and so on. Each one served as platforms for a combined assault by a bunch of rascals, party nominated administrators, trade-union maffiosi put at their Counsels or governing boards, and many apparatchiks lacking any managing competence. Their function was just one: sack funding for the party and themselves. The total debt of those 154 State companies grew from 142 billion reals in 2009 to more that 540 billion in 2015, and the personnel expanded from 430 thousand in 2006 to more than 550 thousand in 2015; their combined negative assets grew by more 153% in the period, from -9,7 billion reals to -24,6 billion. Many of those companies are now totally dependent of the National Treasury, and State banks will have to be capitalized, replenished by the additional taxation for the foreseeable future. Brazil will not recover before five to ten years, and even after that, per head income will be the same as that of ten years before.
This was not the result of any foreign financial crisis, but a totally home made disaster, what I call the Great Destruction. But that is only part of the whole picture of the Great Robbery in Brazil during Lula years. The active participation of promiscuous capitalists in the criminal endeavor is of course an important element of the horrible story Brazil has endured under the mafia-like gang of PT apparatchiks, commanded by the big bosses of this pro-totalitarian party. Another new feature, that has no precedents in the economic history of the public administration in Brazil is that the two – Antonio Palocci and Guido Mantega – PT financial ministers were actively devising new “legal” methods – decrees, provisional measures, even laws – for a continuous flow of State money and private “contributions” in favor of the party.
By doing so, by practicing what could be called a higher stage in the scale of corruption in Brazil and elsewhere, Lula and PT’s governments can be said to be at the origin of a new pattern of organized crime in the political sphere: the institutionalized crime, a kind of combination of mafia-like practices – that is, a mixture of charismatic and patrimonial established methods – with some Weberian procedures – that is, rational-legal – that represent a superior step in the sordid art of collective robbery. In Marxist terms, one could even advance a sort of Engelsian qualitative transformation of the political corruption in Brazil, according to a new evolutionary scheme: from the former, traditional artisanal mode of production of corruption – made individually by “normal” politicians – to the new, scientific, industrial mode of production of corruption, in large scale, at every level of the State, its public companies, and also the private sector, plundered or voluntarily engaged in the Great Brazil Robbery.

5. What’s the way out of this?
Argentinians, when confronted with a similar (perhaps worse) dereliction of their political class, in the burning succession of crisis in 2000 and 2001 – five presidents in a month or so –, adopted, out of the free and spontaneous mass demonstrations, this apt recommendation: “Sack them all!” (Que se vayan todos!). There is no such thing in Brazil, yet, but perhaps we are not very far from this kind of reaction. The informed public opinion, the middle class citizenship, and even common citizens, have already manifested their dismay with the political class. In São Paulo, a “manager” was elected mayor, instead of one from the old traditional politicians. Perhaps the same will occur in the 2018 general (presidential, governors, Congress) elections: candidates with current mandates will probably be rejected in favor of a “new” kind of political elite, the “managerial class”, that is, real administrators with some political feeling. This is a possibility, not a prediction…
Brazil is a sui generis case among Latin American countries, having none, or few, of the caudillo traditions of many of its neighbors, though exhibiting the same patrimonialistic deformation of many countries in the region and elsewhere. This very old sin on Portuguese origins, patrimonialism is at the core, and at the very heart of the institutional deterioration in Brazil. But not the traditional form of patrimonialism, which was somewhat modernized during the modernization of the Brazilian State, between the Vargas era (1930-54) and the military regime (1964-1985). Under the lulopetista regime (2003-2016), patrimonialism assumed a gangster-like character, not very far from the “República Sindical” model of the Peronist regime in Argentina. In the case of Brazil, it was a kind of Peronism without doctrine – the “justicialismo”—and a vulgar version of the Syndical Republic. Worse still: in the case of PT regime in Brazil, there is large evidence of the clandestine influence of Communist Cuba in the governments of Lula and Dilma, of course in a disguised form.
Recent events in the political process presented a combination of legal and institutional developments arising from the 2013-2014 crises – street manifestations and a very controversial election campaign – and the intervention of illegal, criminal, covert operations of political financing in an already very corrupted environment. The succeeding process of impeachment against Dilma – because of responsibility crimes linked to irregular use of state banks and the budget iself – was conducted according to the institutional rules, albeit the Supreme Court has, itself, violated de Constitution at least twice, followed by a botched decision by the electoral court in the case of the notorious botched elections of 2014. Notwithstanding the formal compliance with some legal rules, the 2014 presidential election was a demonstration of how corrupt, and corruptive, can be the party politics, and how submissive to this dirty system can be the superior tribunals in Brazil.

6. Reforms: what is possible and what is impossible?
But, the crucial question, in face of the current crisis, is: what could be the structural reforms that Brazil needs, in order to overcome the current state of paralysis, anomie, dissatisfaction? This situation of disarray is, in fact, a reflection of a double process: the worst economic recession ever in our economic history, and a completely failed, prone to corruption, political system. There are plenty of needed reforms, but one surpasses every other: the reduction of a monster, the Brazilian State. Indeed, Brazil has endured, since the 1985 democratization, a regular, constant, progressive encroachment of the State over the lives and work of millions of citizens, or better, everyone and each one. Technocrats of the public agencies, political representatives, social engineers of the Executive, labor and or environmental prosecutors are permanently engaged in all kinds of regulation, supposedly to protect society from itself.
Let’s record just a few examples of the schizophrenic character of some State regulation in Brazil, either federal or local, that afflicts normal economic activity or renders impossible the life of micro or small entrepreneurs. Many years ago, in the spirit of the ultra-regulatory 1988 Constitution, a Congressman from the PCdoB (the small “Maoist” Communist Party of Brazil), later a minister in the PT’s government, succeed in approving a law that prohibits in the whole Brazilian territory the introduction of self-serving pumps in gas stations, with the declared intention of preserving thousands of low-pay jobs. The same political figure also achieved to approve the maintenance of other low-pay jobs in the urban Brazilian transportation system: the collectors of fares in every buses of the Brazilian cities. With this, only now, in 2017, the Justice in São Paulo city, acting under demand from the new “manager-mayor” of the capital, João Doria (a prospective president in 2018), declared unconstitutional a law from the City Assembly that kept in “employment” thousands of fare collectors in the city buses, irrespective of the dissemination of pre-paid chip cards and electronic registers at the vehicles; almost every city in Brazil carry heavily subsidies to the transportation companies, another source of corruption and political trafficking in Brazil.
Last innovation, in Brasilia, was a new law, from the local assembly, destined to introduce a compulsory registration of every Uber private driver in the federal district: with that, they will probably obliged to pay some sort of tax allowance or stipend to continue to exert their job. One driver, animated by this fascist mind, sued Uber in the local justice in order to receive all the benefits provided by the truly fascist Brazilian Code of Labor (enacted by the New State dictatorship in 1943, and inspired in the Mussolini’s Carta del Lavoro): vacations with 1/3 added pay, the usual 13rd wage, subsides for lunch, gas and other benefits. The same applies to the many “feudal” corporations still active in Brazil: lawyers, architects, engineers, economists, doctors, all of them functioning as an “Order”, allowed to collect annual fees from their “protected” professional category. A “trade-union contribution” (imposto sindical) is still in force, and an annual payment equivalent to one-day labor of every worker is collected to be distributed by the Ministry of Labor to trade unions at the various levels (category, federal states, confederations and national trade unions (centrais sindicais, at least seven), every one living on this paying roll, without any control from the Accounting Tribunal. “Corporative” is the other true adjective of the Brazilian Republic.
We can now pursue this analysis by exploring the kind of restructuring which is needed to improve, even minimally, the current state of (non) affairs in Brazil, one of the very difficult places in the world to conduct business, according to the reports related to this domain; a quick look at the World Bank’s Doing Business, or at the Fraser Institute’s Economic Freedom of the World can corroborate this evaluation. Either Brazil undertakes an entire set of reform, or it will be condemned to endure a very long period of low growth, not to mention severe crises Greek-style or decay as durable as Argentina’s. I will divide my suggestions into two classes of reforms: those possible, or at least “doable”, and those impossible, or utopic. Let’s go:

Possible reforms:  
1) A radical shrinking of the weight of the State over the productive life of the nation, starting by the reduction to half in the number of ministries, with a proportional elimination of a wide range of public entities. Decrease in the Kafka-like bureaucracy of the Federal Revenue Service. End of any type of privileges linked to public functions.
2) Reduction and simplification of the fiscal charge, which is very difficult because of various levels of taxation in the federation and regional differences in fiscal repartition of the receipts; therefore, the reform could start by a linear decrease in the various rates, for instance 0.5% annually during a ten-year period, while a discussion on the quality and amount of each type of taxation, and its appropriation by states and municipalities, can take place in a orderly manner.
3) A new fiscal deal: suppression of the unconstitutional figure of conditional budget allocation by the Executive, as well as pork barrel individual additions to the budget, which has to applied and implemented exactly as approved by the Parliament;
4) Elimination of the complete machine for governmental self-propaganda, only allowed information campaigns with a true finality of public order (vaccination, and natural catastrophes, for instance); communication is well served by private channels.
5) Resumption of a general reform in the social security systems, unification of the common and public sector schemes, elimination of all residual privileges, and the establishment of a sustainable intergeneration mechanism, compatible with the moving demography and the sectorial financing of the new system.
6) A complete revision in the National Health Service, nowadays working under a fictional non-paid, universal access system, towards a market-based, multiple system of insurance companies, with subsidies only for the confirmed low income strata.

Impossible reforms: 
1) A political reform aimed at the complete elimination of the Party Fund, a State sponsored stipend to every party recognized as such by the Electoral Tribunal, which is an inducement to the creation of new legends, and the fragmentation of the existing parties, giving financial support to “for-rent-parties” (or, an electoral business of the worst sort); current system allows a total segregation between the party machine and the electorate, which is, in sum, a rent-seeking approach to politics. No public financing of campaigns of any kind: parties are private law undertakings.
2) Immediate extinction of 50% of all commissioned jobs in the public sector, in all levels and spheres of governmental activities, with a concomitant establishment of a parliamentary and executive commission designed to reduce and align the remaining jobs, to be filled by open meritocratic recruitment, without the current stability at entrance; complete interdiction of reciprocal nepotism and other forms of preference.
3) Education: creation of a new class of teachers and professors, paid according to merit and benchmark results, without stability, but with a constant program for training and capacitation, proportionate to remuneration.
4) Privatization of every public or state company not linked to an essential and exclusive public service (defense and justice, for instance).
5) Elimination of all tax and fiscal exemptions, and other privileges, linked to the so-called “religious entities”, now turned into a thriving “industry”. The same applies to trade unions, another “big industry”: elimination of the “syndical taxation”, complete freedom of association, no public resources whatsoever for the “centrals”.

This is my personal list for reform in Brazil, that could be integrated to an agenda for reform during the next few years, if – and that’s a Big If – there could be any chance of real consensus among political elites and entrepreneurs in that direction. We all know that reforms, in general, are always difficult, as Tocqueville recognized in relation to the transition from the Ancien Régime to a constitutional system in his own country, France. If not implemented as a result of a consensual governance outlook among the governing or dominant elites, reforms become disruptive, and are usually initiated after a deep societal crisis, which is perhaps not yet the case in Brazil, at least not in the same extension that those that occurred in recently in Greece, in Argentina, and currently in Venezuela.
Could Brazil descend into the chaos that those countries were, or are today? Not of this kind, at least in the foreseeable future, although disruptive events cannot be at all excluded. What instead could happen in Brazil would be a protracted crisis made of low growth, partial or imperfect sectorial reforms, and a clear loss of legitimacy of the three branches of government. Worse, the current political mess in Brazil offers plenty of raw materials for all types of dark humor, that is political jokes of a derogatory nature against government and State institutions. In fact, political humorists in Brazil do not need to invent or create anything, do not have to have any inspiration for their jokes: all they need is offered on total freedom and gratuity by the official institutions and their representatives. To be true, those public figures constitute an unfair competition and an informal concurrence to professional humorists. That’s not a joke, it’s a political tragedy!

Paulo Roberto de Almeida
Brasília, June 12, 2017