As the Brazilian real depreciated and corruption scandals linked high level government officials – many of which have been arrested – to massive bribery cases at state-controlled oil company Petroleo Brasileiro SA Petrobras (ADR) PBR (NYSE: PBR-A), Brazil’s crisis seemed to be hitting a bottom. However, the base was never hit, and things got worse instead.
As the corruption scandal unraveled, former President Luiz Inácio Lula da Silva was brought in by the police for questioning. In a daring move, current President Dilma Rouseff appointed Lula da Silva as her Chief of Staff, leading many of her critics to accuse her of wanting to shield the former president from prosecution.
Reacting to this appointment, Judge Sergio Moro, who was in charge of the Operation Car Wash ("Operação Lava Jato") investigation, released to the public roughly four dozen tapes featuring phone conversations between Lula da Silva and several high-ranking politicians, government officials, judges and business executives. The tapes led many Brazilians to take the streets. Massive protests against Rouseff crashed with equally massive demonstrations against Moro.
Rouseff has denied all charges, and characterized the impeachment process as a coup attempt (please see footnote on military interventions in Latin America). While fears of a military intervention take over the Brazilian society, how are young people living the situation?
Benzinga spoke with several Millennials in Brazil. While they shared their thoughts and interpretations, they all asked not to be identified, assuring that the political situation was so heated that anything one said could be used against him/her.
Benzinga: Could you explain briefly what’s going on?
A graduate student explained how she understood the issue. “The society is very divided, politically and ideologically. There are constant demonstrations, and it is very common that conflicts between different positions take place at the expense of the real problems that the country is undergoing.”
A government-funded artist shared his view. “The political crisis has made the economic crisis much larger. In the end, we can say there’s a culture of maintaining the crisis to put an end to Dilma’s government.”
“The most ridiculous thing is that Dilma is not being investigated for the Lava Jato Operation. However, the media connects her so much with people involved in the matter, that the crowd believes that all of the left is involved— In fact, most people I know believe Dilma is being impeached because of Lava Jato,” he continued. “One way or another, the idea of a coup is being discussed— a lot! And it’s not an impeachment, because that requires criminal wrongdoing from the President. Since that did not happen, the impeachment is political, and thus, more of a coup than an actual impeachment.”
Another government-funded artist supplemented, “what’s worrying is that people are going crazy, getting into fights in the streets, hitting people wearing red [...] It feels like a very fascist climate.”
In a very short statement, a high-level employee of the Office of the Comptroller General (CGU), a Federal Government agency in charge of “defending public assets and enhancing management transparency through internal control activities, public audits, corrective and disciplinary measures, corruption prevention and combat, and coordinating ombudsman's activities,” said, “Working for the State, I find myself in a complex situation. On the one hand, I see the great agenda in social development, democratization and modernization that Dilma’s administration had – because, even though nobody talks about it, PT governments are very effective in modernizing the management. On the other hand, these practices are corroded by poor political practices.”
Finally, a veterinarian and e-commerce owner stated, “the situation in Brazil is not good; it’s affecting everyone. And, I think the situation cannot be controlled— so many politicians are corrupt, and there’s so much money involved. In addition, there’s not enough information on the media; us, Brazilians, don’t know if everything is true or not, because we don’t trust the politicians.”
Benzinga: How is the political crisis affecting the economy? What about everyday life?
The student cited above said she had undergone no “significant changes” in her life. However, “there has to be constant adaptation in times like this,” she stated.
“The economy is kept on hold [...] The companies investigated in the Lava Jato Operation are the motor of the economy and of the big infrastructure projects in Brazil,” the artist explicated. “As no new projects are undertaken, a lot of people go out of a job— and that makes things even worse.”
“For those who work with culture, things are equally bad. Or worse. Government projects are all on stand-by, the government apparatus is on a hiatus, until the impeachment issue is resolved,” he added.
A well-known financial analyst also shared her experience. “Economically, the situation has not affected me yet, since I still have my job. However, the political crisis has its impacts on the financial world— Many investors left the country, leading to a capital flight, while consumers trimmed their expenses. This led to falling returns, job cuts and, I’m not gonna lie to you, we’re worried about our jobs.”
“Outside the employment context, for my part, I lost credibility in the government. I think it’s a complete lack of respect toward the people, a total hoax,” she added.
Benzinga: People talk a lot about the role of the press in the crisis. What’s going on with the press?
Another college student explained that “the media, as possessor of great power over society, has been standing against the current government and constantly pointing out problems that, according to them, were caused solely by the government.”
The artist then went into Brazilian media, which, he pointed out, is concentrated in the hands of “five powerful families that are constantly intervening in the country’s central decisions.
“To me, what we’re living today is a dispute of narratives,” he added. “The media has divided the country, and has spent years trying to incriminate the PT with all kinds of lies, some more elaborate, other ones, just clumsy.”
“In the end, no one knows what’s really going on.”
The financial analyst briefly talked about the media, which, she assured, “turned all this into a circus, a joke."
Benzinga: What do you think about Lula da Silva’s return and Rouseff’s impeachment?
An environmental engineering student who declared having voted for Lula when he got elected President, assured she would not vote for him again. The PT (Workers’ Party) has been “paying people off with the ‘bolsa familia’ plan, to keep them voting for them.” So, “I would be very glad if she left ASAP,” she added.
The second college student also went into Rouseff’s impeachment. “I do not think we’ll see an impeachment, but I believe that, in the upcoming elections, the PT will have great difficulties to get reelected.”
“Last week, a list that linked about 300 politicians from the opposition party to the Odebrecht Conglomerate emerged but the media did not cover that.”
The vet and e-commerce owner also went into the Lula subject. “Lula is the best president that Brazil has known so far. However, everything that is going on now is a response to the stealing that took place during his government. Dilma, on the other hand, is not doing a good job. Brasil is undergoing one of the largest crisis ever. But, I think her departure, and the ascent of Michel Temer will not help at all.”
Note on military interventions in Latin America: Latin America has witnessed numerous military interventions and coups in the recent past, and the consequences have been dire. The costs were not only economic, but could also be counted in thousands of human lives. Their practices have often been characterized as “State Terrorism.”
For instance, the dictatorship that took place in Argentina between 1976 and 1983 is said to be responsible for the “disappearance” of roughly 30,000 people.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
Image Credit: Public Domain© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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