Today’s appellate court ruling upholding the conviction of former president Luiz Inacio Lula da Silva for graft and money laundering may be another milestone in the country’s fight against corruption. Unfortunately, it won’t do much to lift the pall over Brazil’s politics and economy.
For a start, it isn’t the last word: Lula can appeal again, and he faces charges in other cases even if a further appeal succeeds. Meanwhile Brazil has elections due in October, and Lula is leading the polls. Amid uncertainty over his fate, voters are bitterly divided. All that unites them is economic disappointment and disenchantment with democracy.
The turmoil attending Lula’s hearing and verdict — complete with closed airspace and snipers on the roof — attests to Brazil’s polarization. And although Lula is favored in polls, drawing 36 percent of the vote, nearly 39 percent of respondents said they would not vote for him under any circumstances.
A 2017 regional survey found no Latin American nation unhappier with democracy. The miasma of corruption that has engulfed its politicians and executives has driven voters to unorthodox choices: The No. 2 in the race, for instance, is Jair Bolsonaro, a right-wing ex-army captain known for inflammatory outbursts on race, torture, homosexuality and law enforcement.
President Michel Temer took office under clouded circumstances, replacing the ousted Dilma Rousseff, then dodged prosecution on corruption charges. Brazil’s slippery legislators still seek to stymie the so-called Carwash investigation that tripped up Lula and scores of others. New laws to curb the power of prosecutors are in the works. Disputes over leniency agreements have hindered prosecutions. Political patronage in the civil service continues mostly unchecked, leaving state companies as a nexus for bribery and kickbacks.
The corruption that eats up as much as 2 percent of Brazil’s gross domestic product has made it harder to tackle other economic problems. Hobbled by scandal, Temer and his dwindling political allies have struggled to push through reform of pensions, which eat up 13 percent of GDP. That, like so much else, will have to wait until after the elections.
Even with pension reform, Brazil’s fiscal debt will grow more worrisome. And under Brazil’s sclerotic budget system, about 90 percent of government spending is earmarked. Every year, Brazilian companies must hack through an Amazonian thicket of almost 4,000 tax forms. Brazil’s economy is among the world’s most protected, and its efforts to promote business have been largely counterproductive. Its neighbors have moved ahead with new trade agreements; Brazil has not.
Lula’s ongoing legal drama has drowned out discussion of such issues. In the future, Brazil’s judiciary would do the country a favor by moving faster. But that would go only so far. Brazil has been waiting for an honest leader with political talent. Its wait isn’t over.
–Editors: James Gibney, Clive Crook.
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