International media made large reports about the political crisis which shakes Brazil and which goes through developments for, now, six months. Next Sunday, a first vote by deputies will, probably, initiate the process which may lead to the impeachment of the president, Dilma Rousseff. She is blamed on account of a deceptive presentation of the country public accounts. This target has been chosen by her adversaries because it permits to start the procedure without any judiciary decision. But the real purpose is its role as president of Petrobras when severe corruption acts have been committed by managers which have already been condemned. The PMDB, which was the partner of the PT til now, has announced that it will not support any more the current government in the future. 

But Dilma Rousseff impeachment, even if it is a success for her adversaries, will not put an end to the political crisis since the constitution lays down that it will be the vice –president who will replace her, but he is also accused of corruption and nepotism. Michel Temer is 75 years old and it will be difficult for him to symbolize a new era in Brazilian politics and to face a new impeachment campaign. If he is forced to resign, it would be the Chairman of the Senate who would replace him. But, even if, today, he behaves as a prosecutor, he is not completely immune against legal actions with the purpose of obtaining, for him, the same fate than his predecessors.

The political crisis is not near to its end. But it shouldn’t be considered it is the cause of the economic problems facing the country. Introduced recently as one of the stars of the emerging world, which had the ambition to access to the “Top Five” of the richest countries in the world, Brazil has been confronted to a second year of deep recession, with inflation reaching 10% and an registered unemployment, which is far from representing the reality of the situation, in substantial rise. The remarkable point is the speed with which the turnaround has occurred. Less than five years ago, the country was among the main benefactors of China raw materials appetite and was considering this atypical situation will last. Its currency, the real, rose rapidly and Brazil increased its position in the hit-parade of the world economy. At the top of that, the international community entrusted to it, as a supreme sign of recognition, the organization of the two most important sport events, the soccer World Cup, where its team was supposed to establish its reputation, but it was humiliated, and the Olympic games. Rio de Janeiro would follow London and Beijing. The economic planet, at that time, was swearing to Brazil.

This happy but short period, was also marked by the discovery of major oil fields located in deepwater areas with a difficult access. Everything was going right for the country, and, according to the local expression, God had become Brazilian. The embezzlements which have occurred around Petrobras, in the euphoric context of the period, as the bankruptcy of the businessman Eike Battista, who thought he would be successful in everything he would do, are not the cause of the economic crisis. It results from the incapacity of Brazil political leaders to recognize that the current economic model of the country, based on inequality, bureaucracy and protectionism, had no chance to be succeed and to offer to it the opportunity to profit from that manna fallen from heaven. Lula, with its “bolsa familia” had accomplished a step in the right direction, in bringing in a social transfer regime which, a part from its fair characteristics, had as an advantage, as Europe after the war, to stimulate private consumption and growth, and to get the support of a majority of the population for its political program.

But he stopped halfway. Instead of reorienting the important resources Brazil was starting to accumulate, in direction of education, social housing or infrastructures, he just managed the situation with a short term view, parading in international meetings and spreading the illusion that, yes, God brought the proof that he was Brazilian. During that time, the bureaucracy took a delight to create a pile of local administrative structures which could compete with French ones and a surprising practice aimed to correct inequalities. As a large part of the population was still disadvantaged, it was not fair to ask for it to respect rules. So the bureaucratic zeal was concentrated on the 15 to 20% it was easy to control and to penalize in case of violations of the rules. That has affected many companies which had problems to respond to the fussy bureaucratic zeal, when in the same time they had to compete with entities which were doing the same activities but without any legal constraints. The situation is not quite different but at a much bigger scale, than the one we have in Europe with the “detached workers”.

The biggest mistake was the protectionist choice which has persuaded many foreign investors not to come. Even if limited trade agreements, as Mercosul, had been clinched to facilitate trade among neighboring countries, this policy has closed the door to Brazilian exports to most of the other nations and, above that, has not permitted to introduce, inside the country, a sane competition climate which is synonymous of an enlargement of the choices proposed to consumers. More, there is no better cure against inflation, which has always been a problem in Brazil. At the contrary, the country has put barriers at its borders, has multiplied custom inspections and forced foreign investors to accept an important share of local content if they wanted to produce in the country. 

This policy is a paradox because it is thanks to globalization that Brazil had, during many years, the possibility to export its raw materials. That permitted to it to believe that the way of growth was open and that it will join the family of developed nations. The crisis the country is confronted with, is much deeper than it looks like since it is not only a political turmoil as it occurred many times in the past. Brazil has an urgent need to be aware of its past mistakes, to change the direction and to adopt appropriate measures to put itself in the right trend which will, at last, permit it to satisfy its legitimate ambitions regarding its development. But the weakening of public authority, which is the consequence of the current political turmoil, is a major obstacle. And it is so unfortunate since the country is endowed with unique creative capacity and a worldwide cultural influence. That should incite it to optimism when the current problems have created a deep pessimism. It will be the duty of its political leaders to dispel it in solving their institutional problems and in adopting appropriate behaviors.