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Battling Through Brazil’s Uncertainty: An Update

The news that the impeachment trial of Brazilian President Dilma Rousseff will not conclude until the middle of the Rio de Janeiro Olympic Games comes as a substantial setback to the country’s interim government. Led by former Vice President Michel Temer, the government which has temporarily replaced Rousseff’s had hoped to quickly confirm Temer as the official new leader, in order to grant him the authority to adopt the tough austerity measures that Brazil needs.

In addition, the interim government has demonstrated concerns that Temer’s lack of legitimacy could dissuade world leaders from attending the Games’ opening ceremony. The concern is unsurprising, as the bid to host the summer Olympics was won on the back of Brazil’s rising power as a world player. As things stand, Rio will welcome the world’s best athletes and a flurry of international media amid the country’s worst economic recession since the 1930’s, with GDP contracting by 5.4 per cent in the first quarter of 2016.

Rousseff’s suspension on 12th May and subsequent impeachment has been a divisive issue within Brazil, with 100,000 pro-Rousseff supporters taking to the streets of Sao Paulo last Friday (10th June) to protest against what they believe to be a coup against the President. The Latin country’s political crises have certainly exacerbated its recent economic struggles, and, coupled with the continued zika virus epidemic, Brazil’s political and economic tensions have placed the nation in a concerning position ahead of its Olympic debut on 5th August.

However, as we have previously discussed, the current situation in Brazil is unprecedented and is not necessarily indicative of the country’s current, and future, prosperity. With this in mind, many commentators have speculated that, while the recent GDP figures are disappointing, the worst could be over for Brazil. Petrobras, for example, the state-owned oil company embroiled in the Rousseff corruption scandal, has already reported an increase in output of five per cent in comparison to April. This comes as a significant step forward for Petrobras and the oil sector as a whole, following a substantial dip in output productivity amid the global oil crisis and domestic political unrest.

So, what do the next couple of months look like for Brazil?

After just one month at the head of the interim government, it would seem that Temer has already become as unpopular as Rousseff, with an alarming 58 per cent of the population calling for his impeachment in April – before he had even taken office within the interim government. With this in mind, a number of politicians who oppose both Rousseff and Temer have requested an election, with Rousseff herself calling for a national referendum, should she survive her impeachment trial.

That being said, it is unlikely that we will see a resolution any time soon, and definitely not before the Rio Olympic Games concludes on 21st August. With Brazil’s economic future already starting to look more positive, however, it is expected that the political situation will follow. As the Brazilian population eagerly watches the summer’s sporting events, they will also be waiting expectantly to see the outcome of their President’s trial.

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