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Brazil government battles barrage of problems

15 March 2016

Millions of Brazilians took to the streets in nationwide anti-government

protests on 13 March.

Police figures suggest a record 3.5 million people demonstrated in more than

300 cities across the country.

Many of them had wrapped themselves in the Brazilian flag and said they wanted

"their country back".

They also called for the impeachment of President Dilma Rousseff, the arrest of

former President Luiz Inacio Lula da Silva, and an end to corruption.

Here we take a closer look at the problems besetting the country and what has

gone wrong since President Rousseff was re-elected for a second term in October

2014.

Is Brazil in crisis?

Brazil's largest circulation newspaper, Folha de S Paulo, seems to think so. It

has a whole section entitled "Brazil in crisis" under which it lists its latest

articles on the recent protests, various corruption investigations and attempts

to impeach President Rousseff.

Rio-based O Globo speaks in its editorial (in Portuguese) of a "deep and wide

crisis driven by the biggest nationwide street demonstrations in the history of

the country".

And it is not just the media who are speaking of a crisis.

Senator Tasso Jereissati of Brazil's opposition Social Democratic Party also

spoke of a crisis and said that within his party "there is full realisation

that the moment is quite serious".

Economy in the doldrums

Brazil's economy is going through its worst recession in more than three

decades following a drop in prices for Brazilian commodities such as oil, iron

ore and soya.

In 2015, the economy shrank by 3.8%, its worst annual performance since 1981.

Inflation reached 10.7% at the end of last year, a 12-year-high.

Unemployment increased to 9% in 2015 and economists predict it could go into

double figures in the coming months.

Brazil's currency lost a third of its value against the dollar in 2015 and its

value dropped again after the mass protests of 13 March.

Corruption

One of the main complaints by protesters who took to the streets on 13 March

was the high level of corruption which has tainted the highest echelons of

business and politics in Brazil.

Since the Workers' Party came to power in 2003 there have been a series of

corruption scandals involving politicians from the governing party and also

opposition parties. The two biggest are:

Mensalao: Name given to a corruption scheme in which public funds were

illegally used to pay members of Congress in exchange for their backing the

government in crucial votes. The scandal first broke in 2005. By the time the

Supreme Court concluded its trial in 2012, 25 politicians, bankers and

businessmen had been convicted, some of whom were top members of the governing

Workers' Party.

Operation Car Wash: Name given to an investigation launched in March 2014 into

allegations that Brazil's biggest construction firms overcharged state-oil

company Petrobras for building contracts. Part of their windfall would then be

handed to Petrobras executives and politicians who were in on the deal.

Prosecutors allege that the Workers' Party partly financed its campaigns and

expenses through these kickbacks.

Who has been convicted?

The allegations of corruption are far reaching and include top politicians and

businessmen. Twenty-five people were convicted in connection with the Mensalao

scandal. They included:

Jose Dirceu, President Lula's ex-chief of staff

Jose Genoino, former head of the Workers' Party

Henrique Pizzolato, former marketing director of Banco do Brasil

Among the top names convicted in connection with Operation Car Wash are:

Marcelo Odebrecht, construction tycoon sentenced to 19 years in prison

Joao Vaccari, treasurer of the Workers Party, sentenced to 15 years and four

months

Nestor Cervero, former Petrobras executive sentenced to five years

President Rousseff under fire

President Dilma Rousseff's approval ratings have plummeted since she narrowly

won the presidential election in October 2014.

Dilma Rousseff: Facing the perfect storm

According to a Datafolha poll released on 28 February, only 11% of respondents

across the country said the president's performance was "good or excellent".

Ms Rousseff was head of the board at Petrobras from 2003 to 2010 and many of

her opponents say she must have known about the corruption scandal in which the

oil giant was involved.

She has always denied any involvement and a parliamentary commission cleared

her of any wrongdoing in October 2015.

However, she is facing impeachment proceedings over allegations she manipulated

Brazil's account books to hide a growing deficit.

Many of the protesters who took to the streets on 13 March chanted slogans

demanding her impeachment and urging her to step down.

The brief detention by police of her mentor and predecessor in office,

ex-President Lula, further hurt the president's image.

Lula in the spotlight

President Lula, who governed the country for eight years from 2003 and was one

of Brazil's most popular politicians, was briefly detained on 4 March as part

of Operation Car Wash.

He was questioned over allegations that he received "illicit benefits" from the

Petrobras kickbacks scheme, such as having a construction firm involved in the

Petrobras scandal renovate a luxury beachfront apartment and a ranch allegedly

owned by Lula's family.

Prosecutors filed charges of money laundering against Lula. Federal Judge

Sergio Moro will now have to decide if he accepts those charges.

President Rousseff is expected to offer Lula a post in the cabinet, which would

shield him from Judge Moro's investigation.

Under Brazilian law, cabinet members can only be tried by the Supreme Court,

not by a federal judge.

The move is expected to prove highly divisive with Brazilians, some of whom

believe he is the victim of a political vendetta while others argue that his

alleged misdeeds are catching up with him.

The fact that Lula has hinted that he would be willing to run again for the

presidency in 2018 has further increased the scrutiny he is under.

A country divided

Supporters and opponents of President Rousseff and Lula have held rival rallies

in the past weeks.

Feelings are running high on both sides.

Supporters of the governing Workers' Party point to the achievements the

Rousseff and Lula administrations brought about, such as lifting millions of

people out of poverty and reducing inequality.

They say that the allegations against them are a smear campaign designed to

drive Ms Rousseff from office and prevent Lula from standing for the presidency

in the 2018 election.

They say that the massive corruption investigations are a sign that under the

Rousseff government such crimes are being punished rather than swept under the

carpet as in previous administrations.

The fact that high-ranking members of the Workers Party have been convicted,

they argue, is proof that there is no immunity.

Opponents of President Rousseff accuse her of mismanaging the economy and say

her government is deeply corrupt.

They say they are fed up with the Workers' Party after its 13 years in power

and demand a clean slate.