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Amid Division and Paralysis, an Isolated Rousseff Confronts Scandal and Her Own Troubled Legacy

Paulo Sotero

Director Paulo Sotero authors this piece for The Huffington Post discussing President Dilma Rousseff's challenges in the near future with the recent scandals and economic woes.

Amid Division and Paralysis, an Isolated Rousseff Confronts Scandal and Her Own Troubled Legacy

 

Millions of Brazilians will sing and dance in the streets in the pre-lent festival of Carnaval starting this weekend. This year, however, there is no way to escape the harsh realities of a government paralyzed by division, scandals, and an economy on the verge of recession. The sharp increase of the inflation rate to 1.24 percent in the month of January, or 7.14 percent in the past 12 months -- well above the Central Bank's target limit of 6.5 percent -- did not come as a surprise to Brazilians. According to a new survey, 86 percent of them believe prices will keep rising in 2015 as the government puts in place an austerity strategy described by President Dilma Rousseff in the first cabinet meeting of her recently inaugurated second term as "corrective" and "indispensable" to restore the country's financial health. The expectation of continued price hikes will complicate the task of the team led by Finance Minister Joaquim Levy to stabilize the economy and restore confidence among Brazilian and foreign investors in the country's capacity to resume sustainable growth in the years ahead. Some 90 percent of those surveyed said they expect salaries not to keep up with inflation, which implies rising social tension and trouble ahead within the government coalition led by the Workers' Party (PT).

Brazilians' overall perception of the economy has turned sharply negative, according to a telephone survey called Radar Ideia Popular conducted by Ideia Inteligência, with a sample of 78,222 people in 259 cities in all regions of the country from January 26 to February 1. Three quarters expect employment levels to worsen during the year in comparison with 2014, when record low unemployment served as a powerful campaign argument by President Rousseff. The negative perception on employment trends is more pronounced in the Southeastern states, Brazil's economic powerhouse and home to the bulk of political opposition to the president, who won reelection last October by a narrow 3 percent margin: 81 percent expect the situation to get worse and only 15 percent said it will get better. A slightly more optimistic view prevails in the pro-government Northeastern region, where 30 percent see a rosier picture on employment, compared to 68 percent who are pessimistic. Nationally, there is strong pessimism on employment among the young, with two thirds of them expecting the job situation to deteriorate.

When the topic is taxes, Brazilians have realistic expectations. Seventy percent say taxes will rise. Women, however, are more hopeful, or less prepared, for bad news on taxes than men, with 38 percent saying they will decrease. Regionally, residents of the Northeast are evenly divided about the prospects on taxes, while 81 percent of those who live in the Southeast, and carry the bulk of the nation's tax burden, expect taxes to go up. "The overall perception of recession, inflation and higher taxes will certainly have a negative impact on national public opinion throughout the year. The government will face a very difficult challenge to revert economic expectations," said pollster Mauricio Moura, who coordinated the survey and presented the findings at a session hosted by the Brazil Institute of the Wilson Center on Wednesday.

To read the full article, click here.

Paulo Sotero is the Director of the Brazil Institute of the Woodrow Wilson International Center for Scholars.

*Photo courtesy of Flickr user World Economic Forum

About the Author

Paulo Sotero

Paulo Sotero

Distinguished Fellow, Brazil Institute
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Brazil Institute

The Brazil Institute—the only country-specific policy institution focused on Brazil in Washington—works to foster understanding of Brazil’s complex reality and to support more consequential relations between Brazilian and U.S. institutions in all sectors. The Brazil Institute plays this role by producing independent research and programs that bridge the gap between scholarship and policy, and by serving as a crossroads for leading policymakers, scholars and private sector representatives who are committed to addressing Brazil’s challenges and opportunities.  Read more

Brazil Institute

The Brazil Institute—the only country-specific policy institution focused on Brazil in Washington—works to foster understanding of Brazil’s complex reality and to support more consequential relations between Brazilian and U.S. institutions in all sectors. The Brazil Institute plays this role by producing independent research and programs that bridge the gap between scholarship and policy, and by serving as a crossroads for leading policymakers, scholars and private sector representatives who are committed to addressing Brazil’s challenges and opportunities.  Read more