Brazil’s Rousseff takes nuanced approach to foreign policy

April 29, 2013

Vincent Bevins – Los Angeles Times,  04/25/2013

Shortly before Venezuela’spresidential election, former Brazilian PresidentLuiz Inacio Lula da Silva recorded a video supporting Nicolas Maduro, saying he had “stood out brilliantly in the struggle” for a more democratic Latin America.

Brazilian President Dilma Rousseff, who was endorsed by Lula in 2010, kept silent on the ultimately victorious candidacy of Maduro, the hand-chosen heir of the late leftist Venezuelan president, Hugo Chavez.

The difference in demeanor between the two Brazilian presidents was not surprising to Rousseff watchers. Since assuming office at the start of 2011, she has taken a much more muted approach to foreign policy than Lula, avoiding the type of activism that often annoyed the United States.

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Brazil opens inquiry into claims of wrongdoing by ex-president

April 8, 2013

Simon Romero – The New York Times, 04/06/2013

Brazil’s Public Ministry, a body of independent public prosecutors, has begun an investigation into a claim connecting former President Luiz Inácio Lula da Silva to a vast vote-buying scheme that involved the channeling of funds to the governing Workers’ Party.

The inquiry, which was announced in the capital, Brasília, on Friday and comes after several months of analyzing testimony, opens a new phase in what has arguably been Brazil’s largest corruption scandal, already involving the conviction of Mr. da Silva’s powerful former chief of staff, José Dirceu de Oliveira e Silva, on conspiracy and bribery charges last year.

The move by the Public Ministry, which asked the federal police to carry out the investigation, is thought to be the first time that Mr. da Silva has been directly investigated in connection to the scheme, called the mensalão, or big monthly allowance, for the regular payments that some lawmakers received. The scandal emerged in 2005, during Mr. da Silva’s first term as president. At 67, he remains a towering figure in Brazilian politics.

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Brazil’s leftwing leaders mourn Chavez with not-so-veiled criticism

March 11, 2013

Paulo Sotero – Financial Times, 03/11/2013

Brazilian president Dilma Rousseff declared three days of official mourning in honour of her late Venezuelan colleague Hugo Chávez Frias, who died on Tuesday in Caracas after a two-year public battle with cancer. “We recognize a great leader, an irreparable loss and above all a friend of Brazil, a friend of the Brazilian people,” she said before leading a minute of silence at a meeting with rural leaders in Brasília carried live on national television.

There was, however, an uncharacteristic twist in Rousseff’s expression of condolences. “On many occasions,” she noted, “the Brazilian government did not agree” with the policies of the Bolivarian leader. Insiders say this was not an extemporaneous remark, but a pre-planned statement calibrated for domestic and international consumption.

Rousseff also put some distance between her government and Venezuelan Bolivarians and their allies by returning to Brasília before the official funeral ceremony on Friday, attended by three dozen leaders, including Iran’s president, Mahmoud Ahmadinejad, and Cuba’s Raul Castro.

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Latin America After Chávez

March 7, 2013

The New York Times – Luiz Inácio Lula da Silva, 03/06/2013

HISTORY will affirm, justifiably, the role Hugo Chávez played in the integration of Latin America, and the significance of his 14-year presidency to the poor people of Venezuela, where he died on Tuesday after a long struggle with cancer.

However, before history is allowed to dictate our interpretation of the past, we must first have a clear understanding of Mr. Chávez’s significance, in both the domestic and international political contexts. Only then can the leaders and peoples of South America, arguably the world’s most dynamic continent today, clearly define the tasks ahead of us so that we might consolidate the advances toward international unity achieved in the past decade. Those tasks have gained new importance now that we are without the help of Mr. Chávez’s boundless energy; his deep belief in the potential for the integration of the nations of Latin America; and his commitment to the social transformations needed to ameliorate the misery of his people.

Mr. Chávez’s social campaigns, especially in the areas of public health, housing and education, succeeded in improving the standard of living of tens of millions of Venezuelans.

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Brazil’s 2014 election campaign gets off to early start

February 27, 2013

Anthony Boadle – Reuters, 02/22/2013

Brazil’s 2014 election season got off to an unusually early start this week with the unofficial launch of President Dilma Rousseff’s re-election campaign by her mentor and predecessor, Luiz Inacio Lula da Silva.

Celebrating his Workers’ Party’s 10th year in power, Lula laid to rest speculation that he would run again by anointing Rousseff as the party’s best option to stay in power.

The main opposition party PSDB went on the offensive and attacked the decade of Workers’ Party (PT) rule for undoing its work in laying the basis for Brazil’s financial stability under former President Fernando Henrique Cardoso.

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Analysis: Brazil’s next president will be…

February 25, 2013

Gabriel Elizondo – Al Jazeera, 02/25/2013

There’s a case to be made that no country has lived through as much radical and fundamental positive change in the past 10 years as Brazil.

There has also been an evolution – of sorts – in what Brazilians want and need out of their president.

A decade ago Brazil was a country looking for a charismatic, larger-than-life figure who would lift millions from poverty, take the country to new economic heights, and rattle the cages of the world to take notice of the South American giant.

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Brazil: prosecutor to analyze testimony by suspect about former president

January 10, 2013

Simon Romero – The New York Times, 01/09/2013

The prosecutor general, Roberto Gurgel, said Wednesday that he would analyze testimony in which a businessman convicted in an embezzlement and vote-buying scheme tied Brazil’s former president, Luiz Inácio Lula da Silva, to the scandal.

The businessman, Marcos Valério de Souza, received a 40-year sentence in October after he was found to have operated much of the scheme, the mensalão, or “big monthly allowance,” named after payments received by legislators.

The Supreme Court’s trial of suspects in the scheme resulted in the conviction of senior figures, including Mr. da Silva’s former chief of staff, who was sentenced to nearly 11 years in prison. In testimony, Mr. de Souza said he deposited funds in 2003 for Mr. da Silva’s “personal spending,” in an account controlled by another aide to the former president. After Mr. de Souza’s assertion, Mr. da Silva said he could not “respond to a lie.” Mr. Gurgel said no decision had been made on a formal investigation.

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Dilma faces mounting difficulties

January 3, 2013

The Economist, 12/13/2012

The administration of President Dilma Rousseff and the ruling Partido dos Trabalhadores (PT) have been put on the defensive following a new corruption scandal as well as recent fall-out from the largest corruption trial in Brazilian history, known as the mensalão (“big monthly stipend”), in which several PT officials have been sentenced to prison by the Supreme Court. Moreover, Brazil’s economy is struggling to recover from a slowdown that began in 2011, despite the government’s stimulus measures. Even though unemployment is at historically low levels, these developments threaten to erode Ms Rousseff’s popularity and complicate the political scene in 2013.

Political rivals from allied parties and the opposition also have begun to stir. In addition, the president faces a mobilisation of political forces in Congress which are opposed to her recent veto of parts of a controversial oil royalties bill. All this points to a more fluid political environment than previously expected in 2013, when Ms Rousseff will be preparing the ground for a re-election bid at the October 2014 elections.

In the latest corruption case, a federal police investigation code-named Porto Seguro has led to arrests and the indictment of several government officials, including the head of the president’s office in the state of São Paulo, Rosemary Nóvoa de Noronha; the deputy attorney-general, José Weber Holanda; and brothers Paulo Vieira and Rubens Vieira , who were political appointees at Brazil’s water and aviation regulatory agencies, respectively.

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Erosion of regulatory agencies becoming apparent

January 3, 2013

The Economist, 12/23/2012

Following dismal GDP figures for the third quarter, driven by the fifth consecutive contraction in investment, the question of what is hampering investment in Brazil has come to the forefront of the policy debate as its performance will be one of the key aspects shaping the country’s economic outlook in 2013 and beyond. The Economist Intelligence Unit has recently revised down its estimates for GDP growth for 2012 (to 1%) and 2013 (to 3.5%), on the back of Brazil’s lacklustre performance so far this year and a weaker outlook for both private and public investment.

There are several theories about the reasons for the fall in private investment in Brazil. Prominent among these are the structural problems facing the productive sector, such as the lack of infrastructure; the high burden of the tax system; costly and relatively unskilled labour, coupled with rigid labour legislation; and an overvalued exchange rate in recent years (although this has eased somewhat since March), with imported goods supplying a greater share of consumer demand than locally produced goods. There is also a growing view that the government’s hyperactivity—it has implemented a spate of apparently unrelated stimulus measures since mid-2011 (many of which have been announced shortly after the publication of disappointing data)—is increasing uncertainty and causing companies to hold off on their investment plans. Another factor is that Brazil’s macroeconomic policy mix is changing, and this is also creating uncertainty. Despite the authorities’ assertions to the contrary, there is mounting evidence that the exchange-rate regime is moving to a quasi-fix with an adjustable band, rather than the floating regime that has been pursued for over a decade. Uncertainty over exchange-rate policy is problematic as many companies need to import capital goods in order to invest. Last but not least, there are the concerns over the government’s protectionist stance, including the adoption of local-content requirements that affect major exporters such as Embraer, Brazil’s aviation company, which needs to import most of its production inputs.

One often overlooked issue in this list of factors that may have contributed to the recent fall in the investment rate (to below 19% of GDP, from 22% before the 2008 Lehman crisis) is the extent to which Brazil’s institutions have been eroded in the last few years. During the 1990s, the government of Fernando Henrique Cardoso (1995-2002) promoted a major overhaul of the economy, not only laying the foundations for macroeconomic stability, but also creating the institutional framework to sustain a favourable business environment following the ambitious privatisation programme undertaken at the time. The creation of regulatory agencies, staffed by technical rather than political appointees, was an important achievement. The appointment of managers and directors with extensive private-sector experience to head major public-sector financial institutions, such as Banco do Brasil, was also a step forward, following Brazil’s previous record of highly politicised public financing decisions, which had led to a series of losses and recapitalisations of the public banks.

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Brazil’s attorney general says he’ll look into allegations against popular ex-president

December 20, 2012

AP/Fox News, 12/19/2012

Brazil’s attorney general said Wednesday he will look into allegations that  popular former President Luiz Inacio Lula da Silva knew about a massive  cash-for-votes scheme in Congress that led to the recent convictions of 25  people in a landmark trial.

Roberto Gurgel said he’ll examine statements by businessman Marcos Valerio  that Silva approved of the so-called “mensalao” monthly payout scheme and that  he used cash from it for personal expenses while in office. Silva denies the  allegations.

Valerio was sentenced to more than 40 years in prison and fined $1.3 million  for being what the Supreme Court called the “operator” of the scheme that gave  legislators cash handouts in return for their support of Silva’s policies after  he took office in 2003. Valerio made the allegations against Silva in testimony  to federal prosecutors last September, after he was already convicted but before  he was sentenced. His detractors say that indicates his testimony cannot be  taken seriously.

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