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LatinNews Daily - 14 March 2016

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Record crowds protest against the government in Brazil

Development: On 13 March, millions of Brazilians took to the streets in the largest anti-government demonstrations in the history of the country.

Significance: Though estimates vary, Datafolha, a respected local polling organisation, put the numbers in the city of São Paulo alone at 500,000. According to police sources, which tend to overestimate, 3.5m took part in cities nationwide. The main consequence of such large numbers will be to undermine support for President Dilma Rousseff among the governing coalition, making her impeachment more likely. On 12 March, the ruling Partido dos Trabalhadores (PT)’s most significant political ally, the Partido do Movimento Democrático Brasileiro (PMDB), started to distance itself from the Rousseff government; other centrist parties look set to follow. Also yesterday, new accusations surfaced alleging Rousseff’s presidential campaigns in 2010 and 2014 were financed with illicit funds, adding to the case against her in the supreme electoral court (TSE).

  • There were no reports of serious disturbances during the demonstrations. The PT had cancelled its plans for counter-marches at the last minute, fearing the possibility of violent clashes. The police said that there were demonstrations in over 300 cities across the country's 26 states and the Brasília federal district, with 100,000 marching to the federal congress demanding Rousseff’s resignation in the capital. Though the protests were dominated by the white middle classes, there were signs that the crowds were more diverse than in last year’s marches. Protesters also argued that not everyone had the money or the time to travel to the demonstrations.
  • At the end of the day, Rousseff released a note acknowledging the democratic right of those who wished to protest and praising their peaceful nature. While it is obvious that the government is damaged by the demonstrations, it is not clear who gains. Virtually all opposition politicians, including Aécio Neves of the main opposition Partido da Social Democracia Brasileira (PSDB), who lost the 2014 presidential election to Rousseff, were booed and jeered as they attempted to join the marches. But some of the government’s allies, cited by local media outlet O Globo, said they believed the strength of the protest made Rousseff’s impeachment more likely.
  • On 12 March, at the PMDB party convention, the delegates passed a ruling ordering its members to refuse to take up any position in the Rousseff government while it decides on whether to continue in the ruling coalition led by the PT. Riven with factions, the PMDB’s stance is unlikely to hold. Mauro Lopes, nominated as civil aviation minister, has already indicated that he plans on taking up the post. Still, the momentum within the PMDB, Brazil’s largest party, is swinging away from Rousseff. Other members of the ruling coalition, such as the Partido Social Democrático (PSD) and the Partido da Republica (PR) are also beginning to distance themselves from Rousseff. The arithmetic that suggested that Rousseff could avoid impeachment now looks more challenging.
  • On the same day as the PMDB convention, the local news magazine, IstoÉ, published further extracts from the plea bargaining of Delcídio do Amaral, the former head of the PT in the federal senate, who is facing charges of evidence tampering in ‘Operation Car Wash’, the investigation into corruption at the state-owned oil firm Petrobras. Do Amaral claims that up to R$4.5m (US$1.2m) was siphoned off the federal government money meant for the Belo Monte hydroelectric power plant to fund the election campaigns of the PT and the PMDB in 2010 and 2014. If true, it would add to the pressure on the TSE to invalidate the results on the 2014 elections, and strip both Rousseff and her vice-president, Michel Temer of the PMDB, of their mandates.

Looking Ahead: Political risk consultancy Eurasia Group now puts the chances of Rousseff’s survival at 50%. The financial markets are already betting against her. But it is far from clear what happens next, given that the next three men in line to the presidency are all also deeply compromised by corruption charges.