Brazil Update: One Month into a Michel Temer Government

Luisa Leme – AS/COA, 06/17/2016

It’s just over a month since Brazil’s Senate suspended Dilma Rousseff for 180 days to hold an impeachment trial. Since then, the government of interim President Michel Temer has chosen a path that focuses on cutting spending on social policies to improve the country’s fiscal situation in the hopes of recovering investors’ trust. Temer took office May 12 and introduced an economic team led by Finance Minister Henrique Meirelles, who promised to “save the country” from its crisis while preserving Brazilian institutions and anticorruption efforts.

But many of the interim government’s decisions have been met with a backlash from voters, the judiciary, and even its own team. Temer not only picked an all-male cabinet, but 15 of the 26 ministers he selected face criminal investigations, with nine of them linked to the Lava Jato corruption scandal.

On top of that, two ministers had to leave their posts afterleaked recordings revealed they planned to use the impeachment process to halt corruption investigations, while the tourism minister resigned today due to links to Lava Jato. Temer himself was also linked to Lava Jato after the former president of the state-run oil transportation company Transpetro accused him of asking for kickbacksfor a mayoral candidate of Temer’s Brazilian Democratic Movement Party (PMDB). The São Paulo electoral court declared Temer ineligible for future office, based on the country’s clean record law, as he was convicted of exceeding donation limits for political campaigns.

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Factbox: Marina Silva’s policy proposals for Brazil

Anthony Boadle and Paul Simao – Reuters, 08/30/2014

Environmentalist Marina Silva unveiled her campaign platform for Brazil’s Oct. 5 presidential election on Friday, boosted by government data that showed the economy had fallen into a recession in the first half of this year.

Following are her main policy proposals aimed at restoring business confidence and investment in Brazil and putting the country on a path to sustainable growth:

ECONOMY: Return to the basic tripod of policies that gave Brazil financial stability a decade and a half ago: fiscal discipline, inflation targeting and a floating exchange rate, ending central bank intervention that has overvalued the real currency.

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Brazil’s economic party ended well before the World Cup was set to begin. What went wrong?

Daniel Altman – Foreign Policy, 2/25/2014

Less than four months from now, billions of people around the world will focus on Brazil as the World Cup kicks off in São Paulo. But some Brazilians are looking forward with as much trepidation as pride, and not just because of their soccer team’s form in recent tournaments. Under the spotlight, their economy may be revealed as much less than meets the eye.

It’s easy to beat up on Brazil these days. Its currency, the real, has lost more than 15 percent of its value in the past year, as has São Paulo’s stock market, and preparations for the World Cup are not exactly on schedule. But just a few years ago, as the world reeled from economic downturns in Europe and the United States, Brazil was the darling of the financial markets. What happened?

In the years leading up to the financial crisis, Brazil had become an attractive option for investors seeking to balance their portfolios. Stock markets in Europe, the United States, and other established economies track each other so closely as to be almost identical. For example, the DAX index of the Frankfurt Stock Exchange had a correlation of 0.95 with the Standard and Poor’s 500 index on a month-to-month basis between January 2005 and August 2008. By contrast, the correlation between Brazil’s Bovespa stock market index and the S&P 500 was only 0.73. For investors who wanted to insure themselves against dips in the big markets, some of Brazil’s stocks were a reasonable option.

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U.S. nominates daughter of Colombian as the new ambassador to Brazil

Elinane Cantanhede – Folha de S.P., 06/06/2013

Liliana Ayalde, 57, career diplomat, will be the new US ambassador in Brasilia. Her “agrément” (authorization) shall be granted by the Brazilian government tomorrow.

Born in Baltimore in March 1956, Ayalde is the daughter of a Colombian doctor and has worked for the USAID, a division of the U.S. government responsible for implementing the country’s foreign aid policy, since 1981.

She served the USAID, for example, in La Paz and Bogota, and in 2005, during president George W. Bush’s term, she was nominated as ambassador in Asuncion. She then returned to Washington through the USAID and since July of 2012, she has acted as Deputy Assistant Secretary for Central America, the Caribbean and Cuba under the Department of State.

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Exclusive: Brazil’s Rousseff to make rare state visit to U.S.

Brian Winter – Reuters, 04/11/2013

President Dilma Rousseff will make the first formal state visit by a Brazilian leader to the United States in nearly two decades, a diplomatic breakthrough for an emerging power that has clashed with Washington but is hungry for closer ties and recognition of its growing prestige.

The trip will occur later this year, likely in October, officials told Reuters on condition of anonymity because the White House has not yet announced the visit. A White House spokeswoman declined comment.

A state visit, which includes formalities such as a black-tie dinner and a military ceremony upon arrival, is usually reserved for Washington’s closest strategic partners.

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Exclusive: Brazil wants Venezuela election if Chavez dies – source

Brian Winter, Ana Flor – Reuters, 01/14/2013

Brazil is urging Venezuela’s government to hold elections as quickly as possible if President Hugo Chavez dies, senior officials told Reuters on Monday, a major intervention by Latin America’s regional powerhouse that could help ensure a smoother leadership transition in Caracas.

Brazilian officials have expressed their wishes directly to Venezuelan Vice President Nicolas Maduro, the officials said on condition of anonymity. Chavez has designated Maduro as his preferred successor if he loses his battle with cancer.

“We are explicitly saying that if Chavez dies, we would like to see elections as soon as possible,” one official said. “We think that’s the best way to ensure a peaceful democratic transition, which is Brazil’s main desire.”

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Arab Spring: winter at Brazil’s foreign ministry

Marcelo Coutinho – Aljazeera, 09/06/2012

The Arab Spring happened and Brazil’s foreign ministry noticed. Our diplomats were unable to handle the situation, did not support democratic movements, and lost the ground it gained over decades in the Middle East.

Whatever name you want to give, the “Arab Spring” is the most significant world event since the end of the Cold War. Nobody predicted it. Civilisation theorists until now, such as Bernard Lewis and Samuel Huntington, claimed it would be impossible that this could happen in Muslim societies.

But after the process began, all the foreign ministries worldwide revisited their perceptions, concepts, and equations and adjusted and adapted their foreign policies in the region, except Brazil.

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