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Opinion by Michael Royster

RIO DE JANEIRO, BRAZIL — Everybody likes to do lists this time of year, and the Curmudgeon is no exception. The Crystal Ball has been uncovered, and revealed ten (10) things. Read on.

The Curmudgeon, aka Michael Royster.
The Curmudgeon, aka Michael Royster.

1. Dilma will not be impeached. Recent STF decisions have gutted the powers of the Chamber of Deputies and its leaders in favor of the Senate, where Dilma supporters are in the majority.

2. Dilma will not resign. She is nothing if not stubborn, and she still believes she was cut out to guide Brazil onto the path of “true” socialism. Most of her favorite economic policies do not recognize the Fall of the Wall in 1989, much less the defeats of Chávez and Kirchner.

3. Dilma’s 2014 election victory will not be disallowed by the TSE. That court, which can overturn an election for abuses of power during election campaigns, has far too many judges who feel abuses of power are perfectly normal behaviour for incumbents, hence should not be punishable.

4. Dilma will insist upon implementing the same disastrous economic policies that produced the current debacle: she still thinks problems can be solved by throwing money at them. Dilma will join other populist panderers to scuttle any change in the disastrous social security legislation that allows workers to retire at age fifty on full pay and adjusts pensions by more than the minimum salary increase.

5. Congress, state and municipal legislatures will continue to be the same corrupt slough of despond they have long been, with elected representatives thinking not about the good of the people, but about how to line their own pockets before going to jail.

6. Ambitious Brazilian politicians, unable to find space for themselves in the more than thirty already established political parties, will continue to form new parties, standing for nothing at all other than their founder’s self-aggrandizement. In the meantime, PT and PSDB will see their membership drop, leaving the field to PMDB.

7. Brazil’s economy will continue to grow worse, with both inflation and unemployment staying in double figures all year long. The current recession will deteriorate into a full blown depression in 2016.

8. The U.S. dollar will remain above R$4,00 and may hit R$5,00 as government economists (meaning Dilma) continue to dig after hitting rock bottom. Foreign investment will not grow with that theoretically beneficial scenario, because of Brazil’s political insecurity.

9. The October elections for mayors and city councilmen (“vereadores”) will prove once again that Brazilians repeatedly vote for candidates they know to be churls, because the churls have promised them a better life—or at least some more spending money.

10. The 2016 Rio de Janeiro Olympic and Paralympic Games will be a great success, particularly for the crooked cartel of construction companies and their political cronies who have combined to create billion-dollar cost overruns.

During 2016, The Curmudgeon will continue to believe that Brazil is a serious country, or at least would be if its voters ever ceased electing crooks to public office.

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The Curmudgeon moved to Rio almost forty years ago, and has pretty much remained here ever since. He's been writing political commentary for The Rio Times for almost seven years. He used to refer to himself as a WASP (look it up) but doesn't any more because it embarrasses him.

15 COMMENTS

  1. A country with such unbelievable potential continually being destroyed by political low life thievery.

    Now it has reached the pinnacle of the absurd.

    Where will it go from here?

  2. For the better part of this year, I have been making comments concerning the current “state of affairs” in Brasil. These comments have appeared in Ken Raposo’s (a native Brasileiro working for Forbes Magazine in the US) column. I repeated echoed almost exactly the same sentiments as the Curmudgeon in all ten of his predictions. However, there is one that I believe he has overlooked. The current economic crisis will not end for at least seven years (economists who know about prime rate cycles, etc. and how they work already know this but do not want to take responsibility for saying it) . And, with the current political chaos still center stage and nowhere near resolution, this “crisis” may potentially last longer. As an American living in Brasil for almost ten years, I am of the opinion that the dollar will continue to rise, inflation and unemployment will continue to deepen, crime will explode, and the loss of FDI will cripple any chance Brasil has to pull out of this crisis. Until the political arena cleans up its act, their is very little confidence in investing in Brasil. As for Brasil’s plentiful oil reserves, as a result of the “collapse and consolidate” strategy that is being applied, a good portion of the oil revenues will be purchased by foreign nations for considerably less…now, let’s see what happens…tchau.

  3. As a 68 year old expat from England now living the good life in Brasil, I would like to state a phrase my father used to say to me when I found myself dealing with unions. The phrase was ” United we stand, divided we fall”.
    Until the political party system is changed and the number of parties are reduced to a maneagable amount, there will never be union, because the 30 odd political parties create their own divisions.

    At present Brasil is not a democracy, simply for the reason, in a democracy any accused person is innocent until proven guilty, here in Brasil the opposite is the norm, anybody can accuse someone else of doing things against the law, by issuing a process against the person they think has done things against the law, proof off said illegal doing is not required, it is then upto the accused to defend themselves and prove their innocence, lawyers fees etc are strictly for the accused, the Justice will not accrue expenses , legal fees as it does in a democratic country, even when the Justice agrees the accused in innocent. However the Justice will apply a fine on the person who bought the action to court for wasting the courts time.

    The Petrobras scandal and corruption by the so called politicians who the ill informed put their faith in is tantamount to treason, on an epic scale and the punishment should fit the crime, however because of the disunity in government, said government is able to manipulate the proceedings to suit themselves.

    The one really sad outcome of all the problems Brasil has is that it could be such a fantastic country for its people but until the number of political parties are reduced to single figures, and education of the next generations are improved nothing will change.

  4. Brasil is an elephant that moves like a tortoise. My response to Royster’s & the others’ ‘predictions’:

    the US$ may actually face a meltdown in the 2nd 1/2 of 2016 due to the precarious condition of the US Bond market & this can have a positive impact on the R$ & the Rus Rubble……
    the entire global economy is in the tank & we are seeing the beginnings of an end to globalization & ‘free trade’ as we currently know it. Countries that rely less on global trade (such as Brasil) may actually be in a better position than the highly export dependent economies (SE Asia, Korea, MittelEuropa, Japan, etc.)
    the highly indebted anglo-saxon smoke & mirrors ‘financial’ economies have finally hit the proverbial wall. At a fundamental level they are bankrupt. I had to laugh recently when some ‘x-purt’ predicted that britain is on its way to becoming the world’s 4th largest economy……seriously 1 can’t make this stuff up.
    Chicago style neo-liberal economic theory will not work in Brasil & its time is now passé. The global paradigm is / has shifted since 2008 & calls for new out of box thinking & policy frameworks….
    China’s ‘1 belt 1 road’ infrastructure build-out strategy WILL kick in & set off another commodities super cycle by 2017 – 2018 that will favor Brasil & allow cushion for further fiscal changes.
    JAPAN IS THE NEW NORMAL!

    Dilma has no basis for being impeached. The Brasilian Congress is comprised of uneducated, irresponsible, corrupt, know nothing crooks & I am glad that the STF has culled its ‘powers’.
    Dilma & Barbosa are not stupid. They know what needs to be done. Unfortunately any serious reform is being stonewalled by an opportunistic irresponsible opposition, the PSDB will eventually self destruct. Given the impeachment situation, she has no choice but to pander to her core constituency in a time of need. But don’t bet against her. ‘As stubborn & tough as she is’, will be the reason why foreign interests in cahoots with a rogue domestic 5th column will not prevail. However, they will do a lot of damage in the near term via their ‘scorched earth’ policies….now that is treason!

    Once the impeachment drama is finally put to bed, Dilma & team need to just focus on the following:
    a fundamental tax reform w/ primary focus on parts of the tax regime as it applies to the industrial & commercial sectors at both federal & state levels (people forget that many elements of the high tax regime were imposed on the country by the IMF in the 1980s & 1990s). reform of the pension system should be addressed w/i this process.
    Focus on infrastructure development & education.
    No further privatization of valuable state assets such as Petrobras etc., more like better management & governance. Privatizations only lead to private monopolies over time, which are worse.
    A complete ban on all foreign funded & foreign NGOs
    A steep reduction in the abusive SELIC rate in tandem with a Fiscal ‘re-engineering’ vs. ‘adjustment’.
    Screw the ‘ratings’ agencies as they have 0 credibility & are filled with know nothing self serving bureaucrats.
    The FDI (that is not speculative hot money) WILL continue coming for the simple reason that there are few other better options.

    Only time will prove how things shake out…..keeping in mind the unpredictability of ‘Black Swans’. Also, I think know-nothing kenneth rapoza was born in portugal & not Brasil.

  5. Always look forward to your adroit opinions Michael – you nail it! Keep up the good work in 2016! Tudo de bom!

  6. Brazil’s main problem is the ingrained cultural belief that one should try to wiggle around problems “jeitinho” with creativity, favors, bribes and a wink,disregarding morality and tax laws. The belief “you are stupid if you pay taxes” prevails. Brazilians vote in favor of their wallets, especially the politicians.

    DS.

  7. You overlook Power to the People. Normal Brazilians, and there are millions (one of the reasons you and I live here) are awakening. Even they have their limits. Slowly they move forward in such areas as investigating crime, protesting in the streets against corruption, creating social movements in an attempt to positively influence politics, and etc.

    These people get up everyday, go to work, pay their bills and try to do the right thing. That is why I, an ex-pat, love Brazil. These people will not be defeated. Slowly it moves forward in the right direction. Let’s try to instill some confidence in these good people to keep up the good fight. Nothing is ever easy and not much is gained without a significant effort.
    I say, GO BRAZIL1

  8. To DS: ‘you are stupid if you pay taxes’ – outside of places like Japan, Scandinavia & Mittel Europa, this mindset is common pretty much across the world (including the anglo-saxon countries where a whole industry exists because of it). It just varies in degree from place 2 place…….
    The Brasilian jeitinho is an excellent trait if used in a positive way – 1 reason why Brasilian programmers,
    business executives, engineers & medics are some of the best in the world.

    To Ed33037: agree 100%. At a fundamental level the brasilian economy is SOLID!. It is a ‘continental’ economy like China, India & the US. The problem currently is the uncertainty created by all the irresponsible political turbulence & the unemployment that has resulted from the PFs Lava Jato investigation (a good thing in the long term as it strengthens Brasil’s institutional framework) . Business & investors (not speculators) don’t like uncertainty. The fluctuating R$ purely reflects speculation – from both domestic & international financial predators. All this will pass. My only real concern is INFLATION. Inflation in Brasil (& to some extent Argentina) is more of a cultural vs. economic phenomena. Currently, the inflation ‘expectations’ anchor that was set in place by the Real plan has become ‘undone’. Barbosa’s & Tombini’s primary challenge is to now re-anchor inflation expectations. High interest rates & higher taxes are not the answer, as they only benefit the financial sector & aggregate income & wealth disparities. This is a job for sociologists & not economists! Barbosa’s CV incorporates a mix of both.

    As part of a Tax & Labor reform, the govt. should study Germany’s Hartz reforms that were implement by chancellor Schroeder during the early 2000’s. Also, the induce de salario minimo s/b set 2 points below the lower band target of the indice de inflacao – basically @ an annual 2% for the next 3 years……

  9. True talk that unless the political parties are reduce then there will be a way out and unless the political parties come together and form a united union then Brazil the Brighter way. And the Christians steadfast in prayers for the country then the Glory of God will shower Brazil…

  10. they did it again – stupid, stupid….raising the indice de salario minima by 11,6%, this w/ continue to feed inflation & further ‘indexize’ the economy. their logic, to maintain worker purchasing power. 1 does that by reducing inflation & not thru further indexization of the economy. this whole nonsense started at the end of 2011. there is a paradox when the indice de salario minimo is set higher than the BCB’s indice de inflacao banda target……..

    all this for a labor force with low productivity……….this is the obtuse side of Dilma….maybe she continues pandering to her core constituency out of a desperate need for support in the fight against impeachment.

  11. Well, at least dreamers will always be dreamers.. Denial is a religion in Brazil until the wake up call !

  12. Regarding your some of your predictions, starting with (2), Fox News-type right-wing journalists regularly accuse anyone they dislike of being a socialist – calling someone a socialist is no more insulting than calling them a capitalist; it’s just childish name-calling either way.
    Regarding your “Fall of the Wall” barb, do you have any idea of how the economic systems in the former Eastern Bloc actually worked and how vastly different they were from anything the Dilma administration is trying to implement?
    Finally, Chávez was not “defeated” but died in office.

    In response to your item (3), can you provide a reason why Dilma’s election victory (in particular, rather than any other politician’s) should be annulled?

    As for (4), the same set of policies that supported strong growth under Lula are now blamed for causing economic decline under Dilma. Blaming the election of one woman for changes in the global commodities market is a post hoc ergo propter hoc-type logical fallacy.

    Regarding (6), I don’t know if you’ve been reading the news, but the PMDB has been *ahem* pretty involved in the Lava-Jato affair and is the main component in the government coalition (don’t forget the vice-president is a PMDB man), and PMDB attack dog Cunha has been in the news a lot recently for all the wrong reasons. Might it not be a smarter bet to suggest the PSDB will do well out of the current PT-PMDB turf war?

    I agree with your other comments, by and large.

  13. The problem with Brazil is that it is a commodities based economy. When commodities are in demand you make money, when commodities are down you do not make as much. The failure of Brazil is that Brazil (and Russia for that matter) believed the press that they had a great business model for the rest of the world to follow. In fact it was the rising price of commodities in the early mid 2000’s that made these countries flush with cash. The sad part is Brazil (and Russia) rather than investing in modernizing the infrastructures blew it on the Olympics and in Brazil’s case the World Cup too. How nice it would have been to provide great utility and improved highways for all of Brazil? The roads in Brazil have more holes than the surface of the moon. But these will never be fixed. However, Brazil will be saddled with unused stadiums that require hundreds of thousands of reals each to maintain. Brazil cannot afford it so it means these stadiums will probably decay.
    The tax burden in Brazil will only get worse for those with jobs especially the miniscule Brazilian middle class.
    With China not sucking up the world’s commodities there is no immediate light at the end of the tunnel for Brazil.
    Brazil’s problems go far beyond Dilma and Worker’s party. That’s not to say she isn’t one of the problems but ultimately tossing her out of office may feel good for many but Brazilians will find out the very next day that it is the same old same old.
    Well at least Brazil is not Venezuela.

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