Five Years On: Economic And Democratic Fallout From Dilma’s Impeachment

An article published by German news network DW has catalogued Brazil’s descent into the abyss following president Dilma Rousseff’s impeachment. So far, very few high profile supporters of the 2016 coup have acknowledged that it was a mistake, nor the damage it caused – economically, socially, and to Brazil’s democratic institutions.

On August 31st 2016 Brazilian President Dilma Rousseff was expelled from office and her Vice Michel Temer formally rising to Presidency.

Brasil Wire extensively covered the soft coup which Temer himself has acknowledged as such, but one of the adjacent justifications for Rousseff’s removal was Brazil entering a cyclical economic slump.

This followed an incessant propaganda campaign to pin the downturn on Rousseff herself, dating back to her first mandate. Following 7.5% GDP increase in 2010, as Brazil came out of the global financial crisis, 2011 saw solid 4.0% growth, and in 2012 a drop to 1.9% as the cycle kicked in. This was depicted as solely a result of her economic policy decisions rather than any external factors, such as the commodity slowdown.

Before looking at the years that have followed the coup it should be noted that in any democracy judging the economic management of any elected official is in the hands of voters, not politically motivated judges, politicians looking to save their own hides or schemers seeking climbing the greasy pole of Brazilian politics. By the time of Rousseff’s illegal impeachment Brazil was in a cyclical downturn after over a decade of solid economic growth that in contrast to the rest of the world was inclusive and primarily focused on the creation of a stable working class, often euphemistically referred to as the New Middle Class. Much of that stability was founded on a developmentalist industrial policy aimed at skilled and semi-skilled labour, and a highly conditional cash transfer scheme that finally allowed women to take risks, creating their own businesses rather than forced into a life of domestic servitude under the feet of Brazil’s ruling class.

Rousseff was depicted as a corrupt, profligate technocrat who was trapped in retrograde economic planning, and her usurper Michel Temer immediately enacted extreme austerity at the peak of the recession. This predictability turned a slump into full blown recession, which he then claimed required more austerity to counteract. Temer’s economic plan, ironically called the Bridge to the Future, slashed public investment in education and healthcare with an enforced 20 year cap on any increase in spending. This amounted to one of the deepest cuts to public investment by any country in modern history. It should be noted here that Temer did nothing to cut the discretionary spending used to lubricated wheels codified by Brazil’s post-dictatorship constitution, all of the cuts focused on direct investment. Temer admitted to a meeting of foreign investors immediately following Rousseff’s removal that it was her refusal to adopt Bridge to the Future, rather than any other accusation, which was the reason she was removed.

Temer had triumphantly proclaimed that Brazil was now open for business, international investors seeking to purchase stake or whole sectors of the Brazilian economy, particularly in state majority owned Petrobras, were to welcomed with open arms. The Brazil of the past that maintained public control over large sectors of the economic was to be no more, Brazil was now a freewheeling liberal economy ready face disciplining from global market forces.

Five years on the picture could not be more different. Austerity was weaponised, corrupt judges used illegal methods to jail and remove 2018 Presidential front-runner, former President Luiz Inácio Lula da Silva from the race. That combined with illegal and slanderous campaigning leading up to the vote resulted in a far-right career politician with no record of legislative success rising to the highest office in Brazil.

An article published by German international news network Deutsche Welle in May 2021 has catalogued Brazil’s descent into the abyss. It is important to understand that much of the recession was self-imposed by slashing investment at exactly the time when government should be spending and the near paralysation of the construction infrastructure and hydrocarbon’s industry by the sham corruption investigation Operation Car Wash / Lava Jato.

DW observes “One of the reasons for Dilma’s early fall was the recession that started in 2015, in the first year of her second term, when GDP shrank 3.8% compared to the previous year.”

However, the DW piece in incomplete in this regard. It does not mention that of this GDP contraction, it is estimated that in 2015, around 2.5% of GDP was erased by Operation Lava Jato. This is not simply conjecture, Supreme Court Justice Ricardo Lewandowski cited this figure in a recent commentary regarding the legitimacy of the Lava Jato operation, pointing to analyses that it had dismantled the Brazilian economy for the benefit of foreign interests.

The DW report notes: “From 2017 to 2019, there was a slight recovery, with annual growth close to 1%, insufficient to recover the lost and unsustainable terrain in the long run. At the beginning of 2020, during the Bolsonaro government and before the pandemic, the country was already entering a recession again.” 

Through Dilma’s removal, ordinary Brazilians and foreign investors alike were promised some kind of economic miracle which never came.

DW looked at a number of key economic indicators since Rousseff’s removal. This shows weakened economic growth that now amounts to another “lost decade”, after the 1990s under President Collor, Franco and Cardoso. At the heart of the economic policy of the previous Workers’ Party administrations was inclusive growth. where as the pie of the economy grew a majority of those gains would go to working people, this has now reversed. Poverty and inequality rates in Brazil have grown since 2015, this has included food instability not seen since the 1990s.

Adjusted GDP per capita was R$35.2 thousand last year, 11% lower than 2012, when it was R$39.6 thousand.

The impeachment process was often touted internationally as a sign of progress, and a victory for democracy, but the DW as published figures showing a frightening drop in Brazil’s democratic institutions.

Sweden’s V-Dem institute publishes an global index of democracy and freedom. Brazil scored 0.789 in 2012, it started to drop in 2013, with the mass street demonstrations that rocked the country, to 0.795. In 2017 following Rousseff’s removal, it had fallen to 0.626, and by 2020 with Bolsonaro in power it sat just 0.511.

Brazil was among ten countries with the worst decline in this index, alongside India and Turkey, with a s similar pattern in each country, according to the institute: “The ruler in power first attacks the media and civil society, polarizes societies by disrespecting opponents and spreading false information, and then starts to weaken formal institutions.”

Professor José Álvaro Moisés, coordinator of the Quality of Democracy Research Group at IEA-USP (Federal University of São Paulo) told DW that: “It is an authoritarian government, distant from science and critical thinking”The academic freedom index, which measures the freedom for professors and researchers to develop their work without threats or restrictions, also fell dramatically in this period in Brazil: from 0.929 in 2013, to 0.442 in 2020.

Moisés’s laments that Dilma’s impeachment “completely divided the country”. This polarization was exploited in the 2018 elections, won by a far-right president “who is a permanent threat to democracy”.

Dilma Rousseff’s impeachment was the launchpad for Bolsonaro’s own presidential run, and the catastrophe that followed.


By Louis Smith

Formerly Brasil based, London trained architect and writer. Louis studied Political Science before moving into Architecture. Louis has been studying, thinking and writing about Brazil for over 15 years and spent a period living in Buenos Aires in 2002. Specialist areas of interest include Brazilian development, urbanism and architecture.