Ricardo Moraes / REUTERS

How to Fix Brazil

Breaking an Addiction to Bad Government

Brazil has rarely had it so bad. The country’s economy has col­lapsed: since 2013, its unemployment rate has nearly doubled, to more than 11 percent, and last year its GDP shrank by 3.8 per­cent, the largest contraction in a quarter century. Petrobras, Brazil’s semipublic oil giant, has lost around 85 percent of its value since 2008, thanks to declining commodity prices and its role in a massive corruption scandal. The Zika virus has infected thousands of Brazilians, exposing the frailty of the country’s health system. And despite the billions of dollars Brasília poured into the 2014 World Cup and this year’s Olympic Games, those events have done little to improve the national mood or upgrade the country’s urban infrastructure. Meanwhile, many of Brazil’s long-standing problems have proved stubbornly persistent: half of all Brazilians still lack access to basic sanitation, 35 million of them lack access to clean water, and in 2014, the country suffered nearly 60,000 homicides.

But Brazil’s biggest problems today are political. Things first came to a boil in the summer of 2013, when the police clashed with students protesting bus and subway fare hikes in São Paulo. Within days, some 1.5 million people took to the streets of Brazil’s big cities to protest a wider set of problems, including the government’s wasteful spending (to the tune of some $3.6 billion) on the construction and refurbishment of a dozen stadiums for the World Cup. In the months that followed, when Brazilian President Dilma Rousseff appeared on television to soothe the unrest, Brazilians across the country drowned out her voice by rattling pots and pans from their balconies. In October 2014, after promising to increase public spending and bring down unemployment, Rousseff managed to win reelection by a thin margin. But she quickly backtracked on her major pledges, announcing a plan to cut state spend­ing and rein in inflation. The public’s anger mounted.

The chaos roiling Brazil is the product of flawed political engineering.

The deathblow to Rousseff’Operation Car Wash, as the investigation has come to be known, found that private companies had been sending politicians cash through intermediaries at Petrobras in exchange for juicy contracts with the oil giant, the board of which Rousseff had led before becoming president. As new revelations involving high-ranking officials hit the Brazilian media over the course of 2015, Rousseff’s reputation suffered irreparable damage; in August of that year, her approval rating sank to eight percent—a historic low. Even Luiz Inácio Lula da Silva (known as Lula), Rousseff’s once wildly popular predecessor, was drawn into the vortex: in March 2016, prosecutors began investigating his ownership of an undeclared property in the beachside city of Guarujá that had been renovated by a construction firm implicated in the Petrobras scheme, among other possible offenses.

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