Brazilian President Dilma Rousseff will visit Washington next week, her first visit to the U.S. since taking office in 2011. President Obama says they will discuss “a whole range of issues, including climate change, energy, educational exchanges, and science and technology.”
But for Rousseff, the Obama meeting will provide a welcome distraction from the unrelenting coverage of deep corruption in her government by Brazilian and world media.
Brazil’s economy is sliding into recession, President Rousseff’s popularity has hit rock bottom, her party’s treasurer is behind bars for alleged corruption and her enemies want to impeach her. When she visits New York on Monday, Rousseff will have a tough time convincing Wall Street her weakened government can pull Brazil out of a stall and save the once-booming nation’s investment-grade credit rating.
Many doubt her willingness to go to the mat against anti-austerity forces in her own leftist Workers’ Party to rein in the country’s gaping fiscal deficit.
“She will be greeted with a healthy amount of skepticism. I hope difficult questions are asked,” said Paul DeNoon, senior debt portfolio manager at AllianceBernstein in New York.
It is not likely that President Rousseff will want to chat much with Obama about her government’s involvement in the corruption scandal at state-owned oil giant Petrobras. Just last week, Reuters reported, Brazilian police
arrested Marcelo Odebrecht, the head of Latin America’s largest engineering and construction company Odebrecht SA, and accused his family-run conglomerate of spearheading a $2.1 billion bribery scheme at state-run oil firm Petrobras. The arrest of 46-year-old Odebrecht, who has personal ties to former President Luiz Inacio Lula de Silva, could bring the scandal closer to the political heart of the ruling Worker’s Party.
Rousseff also has deep personal ties to Lula, who greased the skids for her election to the presidency. Word is Lula wants to run for a third term as president in 2018, and these scandals will not help him. Rousseff was narrowly re-elected last year.
Brazil was ranked 72nd of 178 countries on Freedom from Corruption in the 2015 Index of Economic Freedom. Although recent “Transparency International research on…corruption in Brazil suggests that the country has made good progress in the past three years passing key anti-corruption laws,…it is stymied by a political system that makes the cost of entering politics too high.”
For his part, President Obama hasn’t included on the meeting agenda any discussion of a U.S.–Brazil free trade agreement, a possibility that was discussed in the run-up to his 2011 visit to Brazil. Such an agreement could greatly benefit both countries.
Lower-level Brazilian delegates may complain about protectionist U.S. agricultural subsidies during the visit, but the only trade-related item the two heads of state will discuss—ending the ban on Brazilian beef exports to the U.S.—will be related to climate change and American demands for Brazilian action against Amazon deforestation. No word from the White House, though, on how lifting the ban would get around the problem of foot-and-mouth disease among Brazilian livestock.
Rousseff was supposed to make this visit to Washington in 2013, but cancelled at the last minute because she was miffed about reported National Security Agency spying on her personal phone calls. Chances are she won’t cancel this time.
