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Introduction. Accountability Institutions and Political Corruption in Brazil.. tion to democracy in raised expectations of increased transparency .. sures by helping to identify institutional flaws, as well as by building politi-.
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The fact that our currency was extremely depreciated when Lula assumed office in precisely because of the electoral terrorism produced by the media in the previous year due to the expected victory of the PT candidate in the presidential elections facilitated this task. It allowed the president to raise the real wage as the exchange rate overshooting was reduced.

At the end of his first term, in , following a developmentalist inspiration, the Lula government launched an ambitious program of public investments called the Growth Acceleration Program, a substantial package of investments, about 13 percent of GDP, expected to be implemented over 4 years, in infrastructure transport, energy, water and sanitation. Throughout this period, the rapid pace of the world economy and the enormous increase in the prices of commodities exported by the country contributed to the relative tranquility of the external accounts, including the possibility of accumulating a significant amount of foreign exchange.

In Lula's second term, the launch of the My Home My Life program, a huge and ambitious program to build highly subsidized popular housing, completed this non-liberal facet of the Lula governments. The blowing up of the international crisis at the end of led to a halt in this process, because, thanks to a mere demonstration effect, the domestic credit market froze.

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The situation was soon overcome with the use of public banks to resume the flow of loans. In addition, measures to subsidize the consumption of sectors with a high multiplier effect, such as the automobile and household appliances industries, and a substantial expansion of credit to the lowest income strata provided an impressive recovery, causing GDP to grow 7. When Dilma assumed office in , the consequences of the crisis were beginning to arrive more incisively.

The conciliatory model, which had hitherto worked, combining improvement in the living conditions of the lower classes which also involved greater possibilities of social ascension through changes in higher education promoted by the then minister of education Fernando Haddad , without disturbing the interests of those above and without decisively altering the financially structured framework of the accumulation process, began to fall apart. From to , more than 2 million jobs were created per year.

Subject: Corruption

Federal spending on social programs was moderately increased, the minimum wage was significantly improved, consumer credit was expanded and a significant number of the very poorest Brazilians would be lifted out of abject poverty. There were also progressive measures adopted such as a law giving full labour rights to domestic workers and programmes to increase diversity such as quotas for blacks, indigenous peoples and the poor in higher education and the public service.

Interest rates are among the highest in the world and over 40percent of government receipts are used to pay off the national debt.

The ostensible economic success of the PT governments frequently exaggerated by government supporters also cloaked important structural faults. The light- and heavy-industrial base grew very moderately while the PT governments aggressively promoted agro-business and the mining sector, leaving the country subject to fluctuations in international markets.


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As Ruy Braga and other researchers have shown, almost all of the 2 million jobs created per year were poorly paid and precarious in sectors such as telemarketing and domestic service. By , 44 percent of the economically active population was still informal, that is, without formal labour rights and benefits.

The emphasis on agro-industry and mining, the creation of precarious low-wage jobs, and reliance on orthodox financial policies would make Brazil particularly vulnerable to the downturn in the world economy which reached Brazil in In the political realm, PT governments successfully forged alliances with centrist and conservative parties not only to guarantee their electoral viability at executive levels but also to obtain majority support for legislation in the Congress. Key ministerial and bureaucratic positions were filled by either PT militants, many of them ex-union leaders, or members of allied political parties, creating a veritable bureaucratic machine organically linked to the party that was not immune to the existing widespread practices of various forms of corruption.

While guaranteeing electoral viability, such alliances alienated the PT rank and file, handcuffed the government in advancing its overall program and ended up fomenting the power of conservative politicians that would later betray the PT.

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As a result, mass social struggles were largely absent until the economic crisis arrived with full force in Brazil in There were no substantial challenges to the ideological dominance of neoliberalism and traditional economic structures or attempts to reform the distorted political system that allowed disproportionate power to corrupt clientelist politicians. LA: We are living in a time when the crisis has clearly become a springboard to attack rights, introduce austerity measures and consequently increase financial gains and income concentration, not to mention how it was used to built the image of a new president who could put the country back on track.

In , the government imposed a year freeze on social spending and passed a labour reform that shatters the foundations of labour rights and alters the very nature of formal employment. We are on the verge of pension reform. Theories from the left state that the political and economic measures Dilma introduced after being elected conflicted with her own manifesto. That line of action, closer to right-wing than to left-wing politics, is believed to have eroded support from both the left and also the population electing Dilma; at the same time, it did not gain support from the financial market and the business community in general as it would be expected.

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The reasons for this shift are not very clear to me. We should also keep in mind that Dilma had started a titanic fight with the financial market a few years earlier, when she lowered the benchmark interest rate and the prices of financial services. What remains unclear as well is the shift of investors and the national elite—if this term can still be used to describe dominant groups—from walking side by side with the PT until then to joining the plot that brought down Dilma.

To this day, I see no convincing explanation for that. Almost all the explanations are based on cultural approaches: due to being closer to our slavery heritage than bourgeois parameters, the elite is said to hate the upward mobility of the poor. I honestly consider this explanation quite inconsistent with the pact in place until then.

The fact is that Dilma introduced a series of incentives for investment, but the investor community did not show up. Why was the pact broken? With that in mind, it fuelled the crisis itself as a means to destabilise the political scene and bring about a policy change. The economic crisis not only fuelled anti-worker measures, but also intertwined with arrangements among actors with different interests who managed to foster an institutional crisis that culminated in the impeachment.

This means the crisis should be seen as another element of a larger plot that has led to the demise of a specific form of government and development conducted by the PT. Little by little, it weakened the alliance between the dominant class and the PT administration, as well as the alliance between the PT and its popular social base.

If these groups had supported the PT administration during the years of economic growth, their support began to collapse when the economy showed signs of recession. The ruling classes were the first to dissent. Parallel to that, a new cycle of discontent broke out among the class of salaried employees that had sustained the PT administration. This found expression in strikes and rebellions. Two polar opposite contingents from different social classes began to form.

The first was born from the bourgeoisie which was becoming increasingly opposed to Dilma. The other, consisting of salaried employees, increased their discontent since the new government policies only impacted the working class. During this time, the bourgeoisie realized that Dilma would be incapable of implementing the policies of social destruction to the extent that they wished she would. Basically, they took it upon themselves to significantly decrease their salaries, partially repeal their labour rights, reform the pension system, and privatize whatever was left of the state-owned companies.

The June protests cemented the already deep social and political discontent. Despite this political landscape, Dilma was re-elected in after an uphill battle. It was intended to placate the bourgeoisie whose political discontent was growing. Parallel to this, in an inverse reaction, the government increased the discontent of the working class, unions, and social movements that had up until then been supporting PT administration.

The Operation was conducted almost exclusively for the purposes of investigating crimes of corruption committed by the PT. Making it impossible to offer a regressive and neoliberal program that could have had social and popular legitimacy, the dominant class scrutinized the grifting ways of the PT.

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MB: Brazil suffered the impact of the crisis in the form of a brusque drop in the economic growth rate in but it then appeared to be making a swift recovery largely due to trade flows with China. The effect of those compensatory factors gradually began to wear off and from on the economic indicators began their trajectory of descent, showing that the economic crisis was to have its most profound effects in the period to come.

The crisis strongly broke the bases of social support of the federal government, then in the hands of Dilma. The worsening economic crisis in the presidential election year of made it very difficult for Dilma to get re-elected.


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There was a notable drop in votes cast for the PT in industrialized areas of the Southeast that had traditionally supported the party. After winning by a very thin margin an election in which she had employed a far more radical discourse of social commitment to grassroots interests, Dilma began her second mandate by abandoning those election campaign appeals and endeavoring to respond to pressure from the dominant class by committing to an economic agenda embracing austerity. Although Dilma brought in a CEO from the largest private bank, Joaquim Levy, as her finance minister, and began her second term by cutting pensions and unemployment benefits, throughout various fractions of the bourgeoisie seem to have surmised that the PT was no longer capable of ensuring social peace, nor of carrying forward its latter-day agenda in the rhythm and depth that were required.

But the profile of the protesters was very different. The anti-corruption and anti-Dilma demonstrations were basically performed by petty bourgeoisie and middle class. The repercussions of the economic crisis had been perceived first by the sectors with higher salaries or small businesses, which had been more taxed than in the previous years. This middle class also seems to consider the increase in the consumption power of the lower-wage sector of the working class, during the PT governments, as something they paid for. With the recession, the government felt pressured to stop investing and to embrace austerity measures that would secure some growth in the industrial sectors.

The domestic market had grown in the past due to a general increase in purchasing power; at the same time, industry was not willing to translate these gains into overall investment in its own productive forces. I believe that the key problem here was very political, in the sense that the developments of the crisis and the way Dilma tried to handle it with an austerity approach shows how much the PT governments had come to trust the Brazilian bourgeoisie and see it as a partner, rather than a force to keep in check and, especially, confront.

By positing the government as the horizon of party politics, both the party and the government became enmeshed in a subservient position to capital. Rather than managing the economy through public investments that increase the economic participation of the working class, and securing, even expanding their rights, the government opted to trust the industry associations and corporations.

At the same time, the party had already forsaken its role in organizing the working class against this. RN: The effects were slow to arrive in Brazil, among other reasons, because of what the Lula government did right: the wealth distribution and public investment of those years made the internal market strong enough to withstand the international conjuncture. Yet it all was dependent on the commodity market, and nothing was done to decrease that dependence; again, no plan B, as if it could last forever.