In my earlier articles, I’ve written about the US Presidential Primaries where now only 5 candidates remain and the JNU protests in my homeland, India. This time, I’m writing about something huge currently taking place in Brazil and no, it’s not about football.
Brazil has gone into crisis mode after their popular former president Luiz Inácio Lula da Silva, fondly called Lula, was arrested on the charges of corruption in the biggest scandal in the history of Brazil, the Petrobras scandal. After the warrant was issued, President Dilma Rousseff, made Lula her chief of staff, giving him immunity from the civilian courts. Rousseff herself is a protegee of Lula and therefore most people agreed that the move was a ploy to save Lula from the damning charges. The opposition wasn’t amused and neither are the majority of the people who started protesting, demanding Lula be tried in a civilian court, especially that of Judge Sergio Moro, who has spearheaded this campaign against the beneficiaries of the Petrobras scandal. The fact that Dilma Rousseff herself was the chairman of Petrobras when the scandal took place isn’t helping her at all. As this news spread among the protesters, they also demanded the resignation of Rousseff. Rousseff has flatly refused to resign, thus commencing a political crisis of sorts.
Now you may have many questions in your mind. Why should I even care about Brazil, a country in a continent I won’t ever visit? The answer for this is that Brazil is a permanent member of BRICS, the organization with rapidly growing economies consisting Brazil, Russia, India, China and South Africa. Whatever that’ll happen there will at least have a slight effect in these countries. One more question might be, what exactly is the Petrobras scandal? You can read more about that here.
The main topic here is populism. There are a lot of fringe and major political parties in every country which pander to the needs of the people at that time, going by emotion rather than logic. Many of the policies they undertake are very popular at that time, but lose their sheen in the future. I’ve always been an opponent of populism and I want to show the boons and banes of the same using Brazil as an example.
Brazil’s parliamentary structure is quite similar to that of the United States: there’s the President, the Senate and Governor for every state. But instead of having just two parties like the US, Brazil has a multiparty system, like India. Until 1985, Brazil had a virtual military rule, with only the military being allowed to have a political party. After years of austerity, the military decided to end their rule and instead the democratic system was started.
Most of the presidents tried hard to combat inflation, but the changes started coming when Lula, a former union leader, won the elections in 2002 representing the Workers’ Party. The Workers’ Party is a self described socialist party which takes a left of center approach to politics.Lula revamped the economic policies started by his predecessors and introduced a lot of social reforms such as Boba Familia, which gives direct cash benefits to poor farmers and Fome Zero, which tries to give access to free food. Such policies are called populist policies. They have their repercussions later.
Lula was then replaced by Rousseff. To draw parallels, imagine Kanshi Ram as the Prime Minister of India and after 10 years, his replacement is Mayawati. That’s exactly what happened.
Growth was high during Lula government. This is because the government had just come out of a debt crisis. Much like how growth was high during the UPA 1 government in India. It was high not because of the government, but despite them.
Let me prove this point.
Things have become worse recently. Above is the budget deficit. You all can see that deficit has recently grown out of hand. Rousseff has to borrow money just to run her country. She is creating a kind of an illusion that the country working properly but in order to do so is following really bad macroeconomic policies. A deficit this high will spiral the country back into debt and would cause a depression.
The growth rate of Brazil in 2011 was 3.9%. In 2014, it was 0.1%. I talked about future repercussions earlier. Well, here they are. Populism failed in Brazil to the point that the people are now demanding impeachment of Rousseff.
Well, I hope the case of Brazil makes every populist voter rethink his stance.
I agree that I went offbeat on this topic, but I’ll be back with another mainstream topic later. Probably on Trump.
**John Oliver covered a bit of this in his segment. You can watch that here.
With valuable inputs from Kartikeya Jain.
Opinionated Moderate 