Three years into his turbulent presidency, Jair Bolsonaro could not have been more emphatic about his determination to stay in office ahead of next October’s presidential elections. From an improvised platform high above crowds of supporters assembled in the commercial heart of Brazil’s largest city of São Paulo, the former army captain said that only God could remove him from power. “We have three alternatives: prison, death or victory. And, Iet me tell the scoundrel judges, I will never be a prisoner,” blasted the president.
For hours ahead of the speech delivered on 7 September, the day Brazil annually commemorates its 1822 independence from Portugal, thousands of Bolsonaro’s supporters – many clad in the canary yellow Brazil football shirt or wrapped in the green, yellow and blue colors of the national flag – had been arriving in São Paulo and other cities across the country, mobilised to give fresh impetus to Bolsonaro’s drive to shake up Brazilian politics.
For these supporters, Bolsonaro is still the man to save their country from the twin evils of “communism and corruption.” Their placards urged a man whose iconoclasm has earned him the nickname of mito or myth to “throw out crooked judges,” defend “fatherland and family” and – echoing the rhetoric of Donald Trump – “make Brazil great again.”
The extravagant rhetoric disguised what has become an uncomfortable reality for Bolsonaro. His promise to introduce sweeping changes to Brazil have come to little. The broad alliance of political interests that swept him to the presidency three years ago has begun to break up. And although there is no doubting the passion of his radical supporters, there are fewer of them than there were before.
Bolsonaro himself had promised to bring two million people onto São Paulo’s streets for the Independence Day demonstration. Only 125,000 turned out, a significant number, but an attendance that has been dwarfed several times in recent years. Brazil faces a deepening economic and social crisis, with inflation rising, interest rates ramping up, unemployment high and a growing number of Brazilians struggling to get by. Forecasters think it is possible that the country will be hit by a recession. And, in the latest political twist, Luiz Inácio Lula da Silva, the 76-year-old former trade union leader who led the country through a period of prosperity and hope just over a decade ago, is well ahead in current opinion polls. Nevertheless, Bolsonaro can still expect nearly a third of voters to back him. Although the surveys suggest the current president will struggle, it is probably too soon to write off the prospect of a second term in office.
Casual observers of Brazil can be forgiven for feeling a bit bewildered. After all, it is not so long ago that Lula was serving a 12-year prison term on corruption charges, and the judge who sentenced him, Sergio Moro, was minister of justice in Bolsonaro’s government. Now Moro too, having fallen out with Bolsonaro, is preparing to contest next year’s election for the Podemos party, one of half of a dozen candidates trying to win votes from the political centre. Amid all this confusion, it is worth pausing to ask how we got here. I explore all this at much greater length in a recently published book (1), but what follows is a basic introduction.
An unexpected triumph
The result of Brazil’s 2018 election was an extraordinary upset that took Brazil’s political class largely by surprise. For most of the previous 30 years, two sprawling political blocks – one cohering around the centre-right Social Democratic Party (PSDB), the other in alliance with the left-wing Workers’ Party (PT) – had dominated the country’s politics and seemed to have laid down a solid base for steady economic and social progress (2). Under the PSDB’s Fernando Henrique Cardoso (1994-2002), the Brazilian government overcame the hyperinflation that had corroded the country’s social and economic fabric during the 1980s and early 1990s and began to manage its big public sector more effectively.
Cardoso’s successor, Lula da Silva (2002-2010), pursued cautious fiscal and monetary policies and was able to maintain price stability. Lula was lucky in one sense. His presidency coincided with a big expansion in Chinese demand for Brazil’s commodity exports and sharp rises in prices. After experiencing serious external account difficulties during the 1980s and 1990s, Brazil was suddenly flush with dollars and built up a solid cushion of foreign reserves. With Brazil’s reserves providing support, Lula was able to extend the benefits of this boom to the poor, creating jobs, opening new programmes of consumer credit, and extending the reach of social welfare programmes. Living in what Lula described as a “magic moment”, Brazil discovered vast new reserves of oil, paid off its debts to the IMF, and was attracting record volumes of foreign direct investment. Alongside Russia, China, India, and South Africa – Brazil was branded as one of the so-called BRICS, whose emergence was seen to be transforming global economic prospects. (3)
This positive pattern was disrupted during the government of Lula’s successor, Dilma Rousseff. First, when commodity prices fell from 2012 onwards, the economy slowed. Desperate to keep expansion going but lacking Lula’s nous and pragmatic touch, Rousseff intervened in the economy in a clumsy and erratic fashion, and lost support among local businesses and the middle class. Rousseff’s popularity plummeted and when, in a hopeless effort to secure fiscal balance, the president started to manipulate public accounts, she was impeached and in 2016 forced to hand over office to her deputy Michel Temer.
Meanwhile, judicial investigations known as Lava Jato or Car Wash, initiated in 2014, exposed an extensive network of corruption, which led to dozens of political and business leaders being imprisoned for skimming off public money from the state-owned oil company Petrobras. One of the biggest victims of the enquiry was former President Lula himself, who was sent to jail early in 2018. At this point the ruling party, the Brazilian Democratic Movement – a catch-all institution which had occupied posts in every Brazilian government since the return to democracy in 1985 – was hugely unpopular and President Temer was lucky to avoid impeachment.
The intertwined economic and political crises created a political vacuum ahead of the 2018 election (4). All three of Brazil’s three largest parties – the PT, PSDB and MDB - and much of the rest of the political establishment had stumbled, opening space for an outsider, who emerged in the form of Bolsonaro, an iconoclastic, socially conservative former army captain.
From his base in Rio de Janeiro, Bolsonaro had built his political capital by championing the interests of the army and police, and particularly rank-and-file troops. Since his election to the lower house of congress in 1990, he had flitted between a variety of small centre-right and right-wing political parties, played little or no part in day-to-day legislation, and won a notorious reputation for his inflammatory, extreme right-wing opinions. Whatever the issue – democracy, crime, the environment, race, or sex – Bolsonaro could be guaranteed to shock and offend liberal opinion.
But for many more conservative Brazilians, Bolsonaro’s iconoclasm represented a welcome change. Three groups – farmers, policemen and evangelical Christians - became firm supporters. All were represented by congressmen organised into three influential parliamentary fronts, best known by their nicknames – ‘beef, bible and bullet’.
Many Brazilian farmers bridled against the restrictions imposed upon them by environmental policies. In the Amazon, smaller ranchers, loggers, and miners wanted more freedom to cut down trees and clear land. Many farmers also wanted to be freer to defend themselves against criminals or squatters. Bolsonaro’s vigorous advocacy of gun ownership might have been an anathema for urban professionals, but in many rural areas it struck a chord.
As urban violence surged in the mid-2010s, partly as a result of a vicious war between the country’s two biggest organised crime gangs, policemen also demanded the right to use their weapons to ‘shoot first and ask questions later’. (5)
A third, very numerous group of Brazilians – evangelical protestants – also liked Bolsonaro. Their number has quintupled since 1980, with more than a third of Brazilians belonging to these socially conservative churches. In 2018, two out of every three evangelicals that voted for Bolsonaro were attracted by his opposition to homosexuality, abortion, and liberal sex education. As one Methodist churchman told me in July 2019, “he showed the kind of thinking that evangelicals were looking for.” (6)
Bolsonaro’s anti-liberalism resonated more broadly. The small towns of provincial Brazil, away from the huge coastal cities such as São Paulo and Rio de Janeiro, in what is sometimes described as the interiorzão or ‘big interior’, are socially conservative. Moreover, during the 2010s, obsessive media interest in crime heightened anxieties, creating a sense at times of almost apocalyptic crisis. A survey by the Brazilian Forum of Public Security, an NGO, found that these fears directly translated into support for authoritarianism. (7)
Steve Bannon, the right-wing ideologue who advised Donald Trump, saw liberal ideas about human rights, gender, and climate change as part of a broader ideological trend, which he labelled “cultural Marxism”. Bolsonaro’s hard-line supporters argued much the same thing. The president’s three most politically active sons – Flávio, Carlos and Eduardo – have been particularly drawn to conservative ideologies and were all active in social media campaigns that did much to bring a right-wing hard-core base together.
Yet, three years ago, Bolsonaro’s appeal extended beyond this. A lot of more moderate conservatives saw him as the candidate most likely to tackle corruption. They liked the fact, for example, that Bolsonaro had invited Sérgio Moro, the investigating judge who had led the Car Wash investigation, to be his justice minister. During his campaign, Bolsonaro had defended the investigations. He had presented himself as spearheading a new radical cleaner approach to politics, closer to the concerns of ordinary people, opposing the deal-making and give-and-take that Brazilians refer to as the toma lá dá cá of congressional business.
Liberal conservatives too applauded Bolsonaro’s promises to introduce radical economic reforms. From the perspective of this group, here was a politician who would get to grips with the over-sized and dysfunctional Brazilian state and cut away the red tape that made life so difficult for the private sector. The private sector was also reassured by the appointment of Paulo Guedes, a Chicago-trained economist and investment banker, to the post of economy minister, who promised the privatisation of public sector entities.
Crucially, the private sector and those better off backed Bolsonaro because he was the only politician able to defeat the Workers’ Party. Bolsonaro had benefited from the imprisonment of Lula, but the PT’s candidate, Fernando Haddad, was still the strongest opponent. As pro-business moderates such as the PSDB and the MDB lost ground in opinion polls ahead of the election, more businesses turned to Bolsonaro.
However, the broad alliance between the radical right-wing core and more liberal pro-market conservatives that brought Bolsonaro to power has begun to break up. Although the current President still commands the loyalty of his ‘beef, bible and bullets’ support base, he has lost the backing of many in the private sector. In congress, Bolsonaro enjoys a majority, but only because he has made common cause with the parties and politicians that he endlessly criticised during the campaign.
The core of the new pro-government alliance is the so-called Centrão or Big Centre, a group of pragmatic and sometimes unscrupulous congressmen, who were heavily involved in Lava Jato and other scandals. Far from representing a radical new approach, the Centrão are about business as usual. Their main political goal is the pursuit of political office and the access to state funds that it guarantees. As one Brazilian commentator put it: “The Centrão’s commitment is not with ideas but with the government machine, the machine of any government. [They have no] ideas [they are just interested] in power and extracting dividends from that.” (8)
The new prominence of the Centrão can be attributed to various factors. First, Bolsonaro came to office promising liberal reforms, but achieved very little. In part, this is due to the president having been uninterested and apathetic about the need for change and having done little to promote reform. He was indifferent to the fate of the one important reform that has been achieved – of the costly pension system - preferring instead to focus on bizarrely trivial issues like fishing and traffic infraction points, as congressional allies worked to push changes through the legislature (9). As of December 2021, Guedes, the liberal economic minister, remains in position, though his promised reforms of tax and the civil service have been watered down by Bolsonaro’s Centrão allies and have remained blocked in congress.
In the meantime, no fewer than 21 of Guedes’ senior reform-minded officials have quit the government, usually because they were frustrated about the impossibility of getting anything done. There were also frequent clashes between pro-market liberals and Bolsonaro’s most ideological hard-line ministers, the latter having taken their lead from the climate change scepticism and anti-Chinese positions of the Trump administration. For example, Ernesto Araújo, former foreign minister, lost no opportunity to criticise China, even though Beijing has been Brazil’s biggest trade partner for the last decade. Under the watch of Ricardo Salles, the former environment minister, the rate of deforestation increased, directly undermining a big European trade agreement. Both Araújo and Salles were dismissed earlier this year.
Corruption also became another bone of contention, mainly because of a scandal involving Flávio Bolsonaro when the president’s oldest son was deputy in the Rio state assembly. After Judicial investigations suggested that Flávio had skimmed off expenses, the affair eventually led to a row with Sergio Moro, the justice minister. When Bolsonaro – apparently in a bid to protect his son - tried to interfere in the appointment of a senior Rio police officer, Moro resigned.
Above all though, Bolsonaro lost the liberals because of the way he mismanaged the Covid pandemic. From the outset, the president has been a denialist. He minimised the impact of the disease and opposed quarantines and social distancing measures. He criticised state governors and mayors who introduced restrictions and threatened judges who upheld the rights of local leaders. As a result, he has broken with governors such as Wilson Witzel from Rio de Janeiro and João Doria from São Paulo, who supported him in 2018. In response to the pandemic, Bolsonaro also promoted unproven early remedies, such as chloroquine and ivermectin, and sacked health ministers who refused to back him up. Bolsonaro was also slow to roll out a vaccination campaign, not least because of his own scepticism about the safety and efficacy of jabs, which, outrageously, he claimed at one point might turn him into an alligator.
It is hardly surprising that the pandemic exacted such a heavy toll in Brazil. Daily deaths briefly topped 4,000 in April before falling sharply as medical authorities were finally able to step up the rate of vaccination. Even so, by mid-November 2021, 611,898 people had died from the disease. Brazil’s death rate of 2,851 for every 1m of its population was exceeded only by Peru and a handful of other smaller countries, mainly in eastern Europe.
As a consequence, the political and economic fall-out resulting from the pandemic and the government’s perceived mismanagement has been significant. The rising number of casualties in early 2021 was accompanied by steady falls in Bolsonaro’s popularity rate. Private sector dissatisfaction with the government’s handling of the pandemic reached a crescendo in March, when 1,500 business leaders, banks and senior economists signed a letter lambasting Bolsonaro’s approach. “We have no more to lose in sterile debates and false news…. The government is using the resources at its disposal badly in part because it ignores or gives little weight to scientific evidence,” read the letter. (10)
In addition, a long running congressional enquiry – which ended only in October – provided an ongoing focus on public dissatisfaction with the president even as the country returned to normal. The committee’s report highlighted allegations of corruption in the purchase of vaccines, as well as the controversial promotion of “early remedies”. Bolsonaro’s advisers, including his second son Carlos, who has for many years been closely involved in the development of the president’s social media campaigns, were accused of pushing fake news feeds that downplayed the dangers of Covid. Carlos Bolsonaro, whose media team were labelled by local press critics as the “cabinet of hate”, was already the subject of judicial investigations over fake news along with other family members.
Bolsonaro has this year managed to raise tensions further by launching a campaign to replace Brazil’s well established electronic voting system with paper ballots. The campaign, pushed on social media, was accompanied by allegations that the country’s political elite intended to impose an opposition victory at next year’s polls. In reply, critics argued that a return to the old system would make it easier for Bolsonaro’s allies to fix the contest. The idea led nowhere; congressmen voted it down and two senior judges spoke out against the change. These responses led to a further round of accusations and counter accusations that further shook international investor confidence in Brazil.
The result was a depreciation of the Brazilian real from late June, after it had strengthened amid signs that Brazil was emerging from the disease. The decline of the real’s value further added to inflationary pressure and delayed the recovery. These economic headwinds were evident even though the price of Brazil’s commodity exports had been rising (in line with the post-pandemic revival in the Chinese and US economies) – a development that would ordinarily cause Brazil’s currency to strengthen. Instead, the political wrangling has undermined the overall recovery, with the result that high international food and energy prices have fed through into spiralling domestic prices and depressing living standards. Interest rates have been increased sharply to contain the pressure, and, according to some private forecasters, it is possible that the Brazilian economy could sink into recession again next year.
Conclusion
As they prepare for the 2022 election campaign, Bolsonaro and his advisers are boxed in. They need to do something to increase the government’s popularity among poorer voters, who are, as things stand, likely to vote en masse for Lula. One option has been to raise the value of the monthly Bolsa Familia welfare benefit paid to poor families. The benefit – rebranded as the Auxilio Brasil – has been more than doubled from an average R$190 to R$400 a month and the number of beneficiaries extended from 13m to 17m. Other spending on subsidies for petrol and diesel, increases in public sector wages, and funding for local projects, is also under consideration.
Nevertheless, a dilemma remains. If the government spends too little, it will not do enough to boost living standards and the political dividend will be too small. On the other hand, if it loosens fiscal controls too much, it risks further undermining the confidence of domestic and overseas investors; a development that will immediately translate into currency weakness and price rises. Therefore, a delicate balancing act is needed. It is not impossible that the government could pull it off. After all, Bolsonaro saw a dramatic increase in his popularity in 2020 as a result of the payment of an emergency grant averaging R$600. But Brazil now has far less room for manoeuvre and the risks of an upset are high. A fit and energetic Lula will be standing by should Bolsonaro fail.
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