Brazilian President Dilma Rousseff is expected to meet President Barack Obama next week when the Western Hemisphere’s leaders gather for the Summit of the Americas in Panama, in what will be Rousseff’s highest-profile encounter with Obama since revelations last year that the National Security Agency had spied on her.
Made public in the documents leaked by fugitive former NSA contractor Edward Snowden, the spying revelation led to the cancellation of a planned Rousseff visit to Washington, and she’s expected to respond next week to an invitation from the White House to reschedule the trip.
Yet tense relations with the Obama administration are nothing compared with what Rousseff faces at home: two years of virtually no economic growth, a currency that’s plunged 18 percent against the dollar just since Jan. 2, a major corruption scandal and loud calls for her resignation or impeachment. In just the third month of her second four-year term, her approval rating is 13 percent, according to the Brazilian pollster Datafolha, after she won 52 percent of the vote last fall.
And things could get worse. Last month, the government reported that economic growth for 2014 was only 0.1 percent, Brazil’s second-worst performance since at least 1995. Among the BRICs, the acronym representing the large developing countries of Brazil, Russia, India and China, Brazil’s growth ranked last. This year, the country’s economy is expected to contract by 1 percent, according to the current weekly survey of economists by Brazil’s Central Bank.
Yet not all is dark. The financial sector here is robust: The profits of private banks continue to soar, and there’s almost no risk of a systemic collapse of the sort the United States almost caused in 2008 or Argentina experienced in 2001.
Even the corruption allegations swirling around Brazil’s Congress and the country’s huge state-owned oil company come with an optimistic irony: What’s known so far is largely because the country’s independent judiciary and related institutions are doing their jobs, unimpeded. The federal police and the country’s prosecutors are aggressively investigating, and more than a dozen politicians and business executives have been indicted and temporarily jailed – unprecedented for the country.
Recently, the Brazilian Supreme Court authorized the country’s attorney general to expand the investigation to 34 federal legislators, including the leaders of the House of Deputies and the Senate.
In contrast to leaders elsewhere, Rousseff appears to have kept her hands off the probe, something that’s helped her maintain good relations with Washington.
According to an official at Brazil’s presidential palace, Vice President Joe Biden telephoned Rousseff on March 13 to invite her to visit the White House, either for a full state visit in 2016 or a work visit later this year. The Brazilian official told McClatchy that Rousseff probably will answer Obama in person when they meet in Panama.
Also bolstering her standing in Washington is her reaction to recent nationwide protests against her that drew hundreds of thousands of people to the streets from Rio de Janeiro’s Copacabana beach to São Paulo.
Rousseff, who was jailed for three years and tortured during Brazil’s 1964-85 military dictatorship, made no effort to suppress the protests. “We respect the streets, one of the legitimate spaces of popular protest, peaceful and without violence,” she said in a conciliatory statement the next day. “We respect and listen attentively to all voices.”
Many Brazilians criticize her over the corruption scandal, which involves allegations of money laundering at Petrobras, the state-controlled oil company. Rousseff was the chair of the company’s board of directors from 2003 to 2010, when much of the alleged wrongdoing took place. But no evidence has surfaced that she had any direct involvement or knowledge, and she’s avoided interfering, though many people linked to her political party are being investigated.
“The credibility of institutions and the preservation of the rules of democracy are the best antidotes against corruption, intolerance and violence,” she said.
Her approach is in stark contrast to neighbor Argentina’s Cristina Fernández de Kirchner, who regularly lashes out against the media for her country’s problems, and Venezuela’s Nicolás Maduro, who creates conspiracy theories involving the United States to explain his nation’s challenges.
Rousseff’s new economic program also shows a compromising and flexible approach, even if that may be of little consolation to many Brazilians.
Faced with deteriorating government revenues, she made Joaquim Levy, a University of Chicago-trained economist and former executive at Banco Bradesco, her finance minister and placed him in charge of an austerity program.
Such a move has its political risks. Rousseff’s political party, the Workers’ Party, known by its Portuguese initials as the PT, is traditionally leftist. During her most recent presidential campaign, Rousseff portrayed her opponent, Aécio Neves, as the candidate of Brazilian banks and the elite – a charge that could also be leveled at her new finance minister.
Her other main challenge will be working with a difficult Congress with fewer spoils to distribute.
The heads of the Brazilian Congress, both under investigation, belong to the Brazilian Democratic Movement Party (PMDB), a grouping that in theory is part of Rousseff’s governing coalition but also a difficult ally.
The party is so powerful that it doesn’t even send candidates to run for president, choosing instead to co-opt whoever wins. Even U.S. officials have long taken note.
In 2004, a State Department official wrote in a cable obtained by WikiLeaks that “the party survives on a vast grass-roots apparatus built around regional chiefs and patronage networks, which it nurtures by joining the governing coalition at the state or federal level whenever possible.”
During the two terms of Rousseff’s predecessor, Luiz Inácio Lula da Silva, the PT’s dependency on the PMDB grew, a sore point for many of his former admirers.
It continued, “unfortunately for PT, their reliance on PMDB has reached such an unprecedentedly high level that they are in danger of being trapped by their much larger coalition partner’s foibles.”