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Once heralded as one of the strongest emerging economies, Brazil has seen its economic fortunes wane over the past year as a result of corruption scandals, fiscal management, and bureaucratic incompetence. The nation is in the midst of a recession – the longest downturn since the 1930s – and unemployment is nearing double digits. As if this was not bad enough, Brazil’s Congress is moving to remove President Dilma Rousseff on charges that she violated Brazil’s fiscal management laws by manipulating government finances to aid her re-election campaign last year. Congress may also move to look into whether Rousseff played any part in a scandal at the state-owned oil company Petrobras, as she was Brazil’s energy minister in former President Luiz Ignacio Lula da Silva’s government. While some investors have welcomed the move to impeach Rousseff – viewing her as an obstacle to sound economic management – other analysts worry that the impeachment controversy will be an unwelcome distraction as Brazil attempts to correct its present economic trajectory. Rousseff’s defenders argue that her prosecution is politically motivated and that Speaker Eduardo Cunha only initiated the proceedings after Rousseff’s Worker’s Party (PT) moved to oust him on charges of bribery and money-laundering.
This topic brief will briefly discuss the current impeachment process, explain the political dynamics behind it, and then describe some scenarios that could occur in the coming months with regards to Rousseff’s potential impeachment.
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