dilmaWhile the president addressed the nation on television on the evening of March 8, part of the population responded by banging on pots and pans and jeering in a dozen cities. It was Dilma Rousseff’s first public appearance since the list came out of 47 politicians to be investigated for embezzlement.

The protest was called in the social networks by the opposition, in which the Brazilian Social Democratic Party (PDSB)–the party of former President Fernando Henrique Cardoso and the candidate defeated by Dilma, Aécio Neves–plays a central role. Cardoso, however, stated he did not support the demand to force the president out of office, although some members of the opposition, including members of his party, have promoted it.

Protests are escalating. The context of this social tension is economic crisis, fiscal adjustment, and the cutting of social benefits for workers. The statements of Aloysio Nunes, former vice presidential candidate with Neves, express the hostility in the air: “I don’t want impeachment. I want to see Dilma bleed” (Valor, March 9, 2015).

The washing machine

The crisis surrounding the diversion of Petrobras funds puts the ruling government on the defensive. After several days of unrest, the Supreme Federal Court published the names of 47 politicians who will be investigated. Most are members of the Workers’ Party (PT), but some are from allied parties like the Brazilian Democratic Movement Party (PMDB) to which Vice President Michel Temer, National Congress president, Eduardo Cunha, and Senate president Renan Calheiros belong. Five of Rouseff’s former ministers, an ex-governor, 12 former Deputies, and former President Fernando Collor de Mello make the list of suspects.

In total, members of six parties–from the current government and the opposition–are involved. The research is based on the allegations made by former Petrobras Supply Director Paulo Roberto Costa, and Alberto Yousseff, who was in charge of laundering the diverted money. Both chose to give away information in exchange for reduced sentences. It is estimated that between 2004 and 2012, the network of corruption diverted some USD $3.7 billion from the state oil company.

The PT issued a statement in defense of the investigation, assuring that the party will sanction any of its members found guilty. However, after twelve years of PT rule, the party cannot reduce the problem to a handful of leaders. The Rightwing could be behind the accusations, including global financial capital leaders who see opportunity in a crisis within one of the world’s principal oil companies. They’re hoping that the serious problems faced by the public energy company will lead to privatization.


Global financial capital leaders see opportunity in the crisis in one of the world’s principal oil companies, with the hope that the serious problems will lead to privatization.


Two major problems seem to form the backdrop of the corruption scandal. The first is the way the PT has financed itself since being in government. Its campaign donations come from large companies, most notably domestic construction companies born under the state development policy of Getulio Vargas (1930-1945) and Juscelino Kubitshek (1956-1961) and expanded under the military dictatorship (1964-1985). But these multinational companies expect a return in the form of awarding bids for state and federal government projects.

This finance scheme, which did not originate in the PT, but was “institutionalized” by it, diversified from the government through control of large state enterprises. This is what happened with the mensalão scandal under the Lula’s first government. There they used the postal service to divert funds to pay a monthly fee to pro-government members of parliament, thus ensuring their loyalty. The court indicted, among others, José Dirceu, Chief of Staff and confidant of Lula. There were subsequent cases that confirm that this is a well-oiled model for financing political parties–not just of the PT–and has been repeated on the state and municipal levels.

Although so far its leading cadres are not on the court’s list, big business is strongly affected by the Petrobras corruption case. The growth of Brazilian capitalism had a pillar of support in a business sector comprised of entrepreneurial families based in construction (Odebrecht, Camargo Correa, Andrade Gutierrez, OAS, Mendes Junior are among the largest), food (JBS Friboi, Brasil Foods), finance (Votorantim), and metallurgy (Gerdau).

The problem is that some of these companies, particularly the construction companies with strong ties to Petrobras, might not be able to continue to operate as they have been. This point affects one of the legs of Lula/PT governability and governance. And moving forward, it will not be easy to find support in the business sector. It took the ruling party many years to win the confidence of this sector that now seems as weathered as the government itself.

Changing times

When he took office in January 2003, Luiz Inácio Lula da Silva knit a web of political and social alliances that ensured governance. In parliament, he successfully formed an allied base with ten parties. With 90 PT Deputies out of 513 total, he was forced to weave a base of support for his government. By the end of the year Lula had gotten eleven of the fifteen parties in parliament to commit to his government, representing 376 members or 73% of the chamber (Folha de São Paulo, December 30, 2003).

It is likely that many of these Deputies, some openly conservative, have been “softened” by timely monthly payments. The truth is that the allied base worked, and became a sort of model for PT governance. But that model has frayed, as many analysts, including former President Cardoso, warn. “[As a mode of governance], coalition presidentialism, which is actually presidentialism of cooptation, has dried up” (Xinghua, March 10, 2015).

On one hand, there has been a clear rightward shift in parliament and an evident erosion of the PT. In 2014, only 70 PT Deputies were elected, and the party lost miserably in what was their stronghold, São Paulo, with only ten deputies elected. This takes them back to 1990 levels. There have been also been changes among the other parties in these twelve years. Some, are undergoing a clear process of extinction, such as the far-right PFL, now Democrats. Many lost strength, while the PMDB maintains remarkable continuity, perhaps because of his inveterate opportunism.

But the most notable development is that new parties entered the Chamber of Deputies, where there are now 28 acronyms represented–almost double 2003. This atomization of representation relates to the Brazilian crisis in political parties that generates the appearance of small parties that were previously marginal or nonexistent. But the support base of the PT weakens.

The parliament elected in 2014 is the most conservative since the coup of 1964. The so-called “bancada de la bala” (bullet caucus), composed of military and police who propose individual armed defense, increased 30%. The group of entrepreneurs now has 190 members, and the ruralistas rose 33% to gain an absolute majority with 257 Deputies (Valor, October 8, 2014). By contrast, unions have only 46 Deputies–roughly half of what they had at their peak.

The 2008 crisis and its aftershocks fit together with the demonstrations of June 2013. It is not a matter of the government wearing down, but something more profound: the end of a virtuous cycle of economic growth and social peace. The first was driven by rising commodity prices and imports from China, giving budgetary room for compensatory social policies while integrating previously excluded social sectors through consumption. This generated the illusion that they belonged to the middle class.

On the opposite end of the spectrum from Cardoso, Homeless Workers’ Movement (MTST) leader Guillerme Boulos, agrees that “the PT governance model has been exhausted.” He asserts that during Lula’s first six years–until the crisis of 2008– “a comprehensive reconciliation process of classes in society” (Correio da Cidadania, March 2, 2015) was evident. As he explains, consensus was sustained thanks to record profits in financial, construction, and agribusiness sectors, “an unprecedented bonanza of big capital gains, while at the same time minimum wage increased and credit was extended to workers, in addition to social programs like Bolsa Familia and Minha Casa Minha Vida.”

With the crisis, the annual growth of 4% (lasting until 2010) could not be sustained and the scope for reconciling interests diminished. To the extent that there weren’t any changes regarding inequality, nor structural reforms, the end of integration via consumption opened the spigot of social protest barely contained by social policies and the expectation of improvement. Protestors positioned deficient social services, transportation, health and education as a sign of how little the country had changed. The Lulista myth began to dissolve.


“Lula peace, and love,” the slogan of the 2002 campaign that carried him to the presidency, was buried by many hands. At one point, global financial capital (whose commands are located on Wall Street and in London) decided to assume an offensive position against the growing challenges it faced: the yuan is already the second currency in international trade displacing the euro and the yen; China and Russia will soon have a payment system parallel to SWIFT, among others.

The offensive has been launched in different ways in every part of the world. The Euromaidan crisis hit Ukraine and led to the violent overthrow of the elected government. We saw the end of the Arab Spring, the direct attacks on the governments of Caracas and Buenos Aires, even using the services of Federal Judge Thomas Griesa.

PT leaders did not perceive the new climate, and if they did, they didn’t take any action. They kept saying, as Lula did, that the 2008 crisis was just one marolinha (small wave) for Brazil and, above all, that the country “does not have enemies.” The truth is that finance capital  handed Dilma a major defeat in her first government by preventing further state intervention in the economy.

According to philosopher Pablo Ortellado, backer of the Free Fare Movement that organized the June 2013 protests, the president could not enact her policy to reduce interest rates and subsidize public tariffs, “because of the influence of the financial system in politics and economics “(IHU Online, February 25, 2015). The first months of Dilma’s tenure represent the consolidation of that defeat. A Chicago Boy, Joaquim Levy, was placed at the head of the economy and he is doing everything he swore he wouldn’t do during the electoral campaign.

“The return to orthodox policies is necessary to balance the books, but it’s a political defeat, the result of the incapacity to implement an alternative economic model,” says Ortellado.


‘A new political and economic model will not be achieved through institutional disputes, but through the intensification of popular struggles.’


This is the situation that the Right picked up on and is taking advantage of to operated its strategies. The old schemes of alliances and the old economy of commodity exports cannot sustain the model, but the PT, Dilma, and Lula have not been able to put anything else forward. Worse still, they are behaving like they did in 2003, when there was a margin for policy adjustments to re-launch the economy.

The fact they still have not managed to integrate into their analysis and that they fail to accept and respond to, is that there have been millions of Brazilians in the streets of the country’s 353 cities for more than a month. The superficiality with which the PT and its intellectuals interpreted what happened in March (from blaming the Right to asserting that the protests were a fleeting outbreak of youth) led them to make mistake after mistake.

One was the brutal belligerence with which they attacked Marina Silva throughout the presidential campaign. Their virulence removed her from the scene, but the price was too high. They opened wounds difficult to close, blinded alliances, muddied waters right and left, and upon saying that everything that not PT was on the Right, became prisoners of a confrontation with the social, economic and political right which today is stronger and has initiative. Months later, the PT is carrying out the same policy of which it accused Silva.

João Pedro Stédile, coordinator of the Landless Workers’ Movement (MST), is correct in stating that “Brazilian democracy was hijacked by companies; the ten largest fund 70% of parliament” (Carta Capital, February 27, 2015). For this reason, they will not carry out any political reform since it depends on this a parliament that obviously is not going to commit suicide.

The MST has organized demonstrations across the country. According to reports, over 25,000 people have been involved since March 5, the National Day of Rural Women’s Struggle. They demand land reform and changes to the agricultural model.

It’s apparent that only broad social mobilization can change the balance of power in Brazil, like the cycle of struggles that delegitimized the neoliberal model between the late 1990s and early 2000s. The marches that the unions organize, with sound systems on trucks and security forces to keep the protesters in line will not be enough. This is the logic of pressuring to negotiate. In contrast, the cycle of anti-neoliberal struggles was able to “displace.”

Brazil could be the mirror for the entire region, since what’s need is what Boulos calls “a new political and economic model.” A model capable of tackling inequality, that doesn’t stop at poverty reduction without touching structures. But that, as the MTST leader notes, “will not be achieved through institutional disputes” but through “the intensification of popular struggles.”

The main obstacle to launching a new cycle of grassroots mobilizations is not the supposed passivity of the people (a view contradicted by the demonstrations), or media hegemony, or the onslaught of the Right. It is a progressivism that, clinging to power, views people in the streets with suspicion, because it fears they are coming for them.

Raúl Zibechi is international relations editor at the magazine Brecha in Montevideo, adviser to grassroots organizations and writer of the monthly Zibechi Report of the CIP Americas Program www.americas.org

Translation: Paige Patchin