Brazil: Civil unrest to persist throughout 2016


07 Mar 2016

Brazil: Civil unrest to persist throughout 2016

  •   Popular unrest directed towards the Brazilian government will continue throughout 2016, with the latest mass protests planned on 13 March. The ongoing corruption scandal at state-run oil firm Petrobras, political infighting within the government, and Brazil’s negative economic performance are all reinforcing anti-government sentiment, and will ensure that mass public demonstrations persist.
  •   Flashpoints for civil unrest in the next six months include the prosecution of politicians for corruption, the emergence of new high-profile suspects involved in the Petrobras case, unpopular attempts by the government to implement fiscal reform, and weak economic performance that has seen unemployment increase and growth stagnate. 
  •   The August Rio de Janeiro Olympics provides demonstrators with an international platform to voice popular disaffection with the government and will likely see unrest, as witnessed during previous international sporting events in 2013 and 2014.

 

Political and economic malaise 

 

Poor public approval ratings for the government and weak economic performance during the past 24 months in Brazil show no sign of abating. Accusations by construction firm Andrade Gutierrez in March that President Dilma Rousseff used illegal funding as part of her elections campaign have again cast doubt on her integrity and could reinvigorate momentum behind those backing her impeachment. Impeachment proceedings were first launched over irregularities in the government’s management of the 2014-2015 budget, but lost momentum in December 2015 after the Supreme Court dissolved the impeachment commission. Although it is too early to judge the impact of the latest accusations, they will further erode public confidence in the government, which has been undermined by the persistent investigations involving senior politicians since the Petrobras scandal broke in 2014.

 

As well as damaging public sentiment, the political situation has led to infighting within the government that has stalled policy-making and much-needed economic reforms. In 2015, the relationship between Rousseff’s Workers’ Party (PT) and its main coalition partner, the Brazilian Democratic Movement Party (PMDB), deteriorated dramatically with the PMDB speaker of the lower house, Eduardo Cunha, leading the impeachment proceedings against the president. Opposition parties have unified in their attacks on government, hoping to rally hundreds of thousands of supporters in nationwide anti-government protests on 13 March. 

 

Government paralysis, combined with weak economic growth and the unpopularity of austerity measures, will generate further unrest. Cuts to the Rio state budget prompted some 10,000 people to protest in the city in early March, and further economic reforms and poor public service provision in the context of low oil prices will continue to stimulate unrest, especially as anti-government sentiment is already high. Unemployment rose to 7.6 percent in February and following an economic contraction of 3.8 percent and inflation rate of 10.7 percent in 2015, the economy is forecast to shrink by a further 3.21 percent in 2016, according to the country’s central bank. Some lawmakers will be reluctant to support reforms that could damage their chances of re-election ahead of municipal elections in October.  

 

 

Flashpoints 

 

The combination of a weak economy, unpopular reforms, and rising disaffection with the government will ensure high levels of popular protests in major Brazilian cities. Although the average size of protests declined across 2015, 2016 has already seen mass anti-government demonstrations, and protests are regaining momentum. Catalysts for unrest will include: 

 

Development of the Petrobras scandal

 

Ongoing investigations into the involvement of senior politicians in the Petrobras scandal will continue to engulf the government. Current investigations targeting former president Luiz Inacio Lula da Silva have underlined this and have at times involved violent clashes between supporters and anti-corruption activists. Clashes took place between Lula supporters and police outside his home in Sao Bernardo do Campo after he was arrested for questioning in March, while leading PT members have called on their supporters to continue to mobilise in support of the former president. Renewed protests calling for Cunha to step down as speaker are also likely after the Supreme Court voted to indict him on corruption charges linked to Petrobras in March. Demonstrations calling for Cunha’s resignation were last held in November 2015, when 4,000 people marched towards Congress in Brasilia.

 

Economic reform

 

Should Rousseff manage to overcome the parliamentary deadlock, planned economic reforms also threaten to provoke popular backlash. Reforms proposed by the PT include tax increases, including the reintroduction of an unpopular financial transactions tax, cuts to government expenditure on public sector wages, the reform of pensions, and the privatisation of public facilities, including several ports. Although crucial in rebalancing the economy, the reforms risk alienating key PT support constituencies such as trade unions and public sector workers, who have in the past demonstrated their capacity to stage large-scale protests and disruptive industrial action. Groups such as Movimiento Passe Livre (Free Fare Movement) have already demonstrated on several occasions this year against an increase in public transport fares, and are likely to remain active throughout 2016. 

 

Rio Olympics 

 

The Rio Olympic Games in August is likely to be targeted by protesters, owing to the aforementioned political and economic drivers of unrest, combined with public anger over expenditure on the Games and Rio de Janeiro’s severe budget shortfall. In both 2013 and 2014, nationwide protests across major cities mobilised more than 2 mn people to coincide with the Confederations Cup and the football World Cup, highlighting protesters’ willingness to target major events. 

 

Protests threaten to paralyse movement around Brazil’s already badly congested cities, including the vicinity of the Barra Olympics Park in Rio. If accompanied by industrial action in the transport sector, the impact on movement can be severe. Unrest in recent years has also been periodically violent, involving direct clashes between protesters and security forces and vandalism of both public and private property. 

 

PGI will be releasing its Rio 2016 Olympics risk assessments later this month. The report is designed for the media, sponsors and Executive travellers who will be visiting the Games and covers:

 

  •   Common protest locations in relation to media centres, Olympic sites and major hotels
  •   Medical considerations, with a dedicated section on the Zika virus
  •   Crime, scams and areas to avoid
  •   Cyber threats; criminal and reputational
  •   Travel recommendations

For more information on the report, please contact riskanalysis@pgitl.com 

 

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