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Slowdown of Brazilian economy seen as major cause of impeachment

Reporter: Yin Yue 丨 CCTV.com

05-12-2016 16:46 BJT

Brazil’s impeachment process against the country’s first female president – Dilma Rousseff, has entered a new period. That's come as the country’s senate voted late Wednesday to suspend Rousseff’s presidency.

Analysts have always believed that Brazil's slowdown has been a major reason behind the drive to unseat the president. However, can her impeachment fix the country's sluggish economy?

Ever since the lower house of the Brazilian congress initiated the impeachment process last December, political turbulences have intensified. While different parties in Congress are playing political games, outside on the street, people are waiting for the country, especially the country’s economy, to change for the better.

"12 years since the ruling party brought us hope but now we are seeing that everything worsening. My salary for example dropped 50%. Everyone is now either defending or attacking , no one is taking care of the country’s economy," said Rodrigues, taxi driver.

"The political scenario is a joke, literally is a joke. I’m not satisfied with anything. Everything is messed up," said Erla, dentist's assistant.

"Prices went up a lot. When I just started working, my salary could buy a lot of things, now I can’t afford that many things with the same amount of money," said Maiana, sales person.

"Internationally since 2010, 2011 commodity prices started to fall. After that Brazil failed to control the crisis with adequate administration," said David Fleischer, professor of Univ. of Brasilia. "

"Domestically, the consumption market was tired out after the mega consumption in 2009 and 2010, people were in high debt and couldn’t consume anymore, which caused the economy to slow down."

Brazil’s economy largely depends on commodity demands. Having benefited from the previous favorable international environment, Brazil’s ruling party achieved brilliant economic development and the implementation of the party’s social policies. However, with falling commodity prices, Brazil’s economy started to deteriorate.

Brazil’s ruling part, the labor party, represents blue-collar workers and the relatively poor population. Even under the current difficult economic environment, the labor party can’t reduce their help to the poor, which really irks other parties that represent the elite class and the financial market.

"When relative indices started to fall, the government can no longer balance workers, financial capital and the enterprises, which as a result, make it hard for the government to maintain political alliances," said Flavia Berolli, political analyst of Univ. of Brasilia.

"The political crisis is directly linked to the difficulty that the government has to deal with different social classes."

The vote that decides whether to suspend Dilma Rousseff’s residency, or to impeach her or not, all happens here in the senate.

Now the vice president of the country Michel Temer, who will take the country’s seat once president Rousseff is suspended, has announced his plans for reforms. But is Rousseff's impeachment the right pill for Brasil’s economy? Analysts opinions differ at this point.

"The vice president will help to rebuild private sector’s confidence, and boost the sector’s investment in the overall economy. The political crisis will go away, and it would be easier for congress to approve policies that benefit the economy," said Fleischer.

Flavia Berolli said, "President Temer will be able to push economic adjustments that the Rousseff government failed to do. But we have to see at what costs."

"Our Economy can’t stay isolated from the society, and the question we have to ask is that who will benefit from these adjustments. I don’t think the workers and the relatively poor population could benefit from that."

After president Rousseff’s suspension, the impeachment case will still be deliberated by the senate. Another round of vote in the future will decide whether to impeach president Rousseff or not.

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