Why Venezuela matters to Brazil

(Note: A guest post by one of our resident Brazilian readers, André Oliveira. This is my loose, butchered translation from the original Portuguese – the first time I have ever translated anything from that gorgeous language. Enjoy)

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Back in December 2005, Presidents Hugo Chávez and Lula laid the cornerstone for the Abreu e Lima Refinery Complex in the Brazilian state of Pernambuco. The refinery was a $2.5 billion project, co-owned by PDVSA and Petrobras, and at the time both countries were booming. Brazil was selling large amounts of its commodities to China at an outrageous price, which helped sustain the expansion of the economy. Riding the wave of the commodity boom, Lula would frequently boast that growth rates like these were “unseen” in Brazil until then.

Then, in 2008, the US housing market went bust. Lula actually said it was going to be “uma marolinha” – a little wave – and that Brazil was perfectly insulated against its toxic effects. On the heels of heavily triumphalist propaganda, in 2010 Lula managed to get Dilma Rousseff elected President in spite of her lack of charisma and her inexperience in running for office. The government’s marketing gurus sold her as an outsized manager – the “mother of PAC”, the Programa de Aceleração do Crescimento, which was the name given to Lula’s set of economic policies. We were told she would help Brazil continue on a high-growth path.

The scenario in which Brazil was showcased as an emerging power capable of showing the US and Europe how it was possible to survive an economic downturn without going deeply into recession … proved to be a fallacy. Misallocated infrastructure resources and excessive government spending, along with a fall in consumer spending, giant fuel subsidies that heavily affected Petrobras’ books and made its stock price tank, and above all, a return of high inflation, all suggested that the “marolinha” had indeed become a tsunami.

Dwindling resources did not improve the political situation. Several high-ranking Workers’ Party (the PT, Rousseff’s and Lula’s party) officials were convicted in the so-called Mensalão case for receiving monthly stipends in exchange for their votes in Congress. The ruling by the Federal Supreme Tribunal (STF) prompted leading PT figures to say the trial had been political, and that the STF had been influenced by “conservative” media. One wing of the PT resurrected a project for “social control of the press,” a euphemism that translates into censorship of the press that opposes the federal government.

In light of this, chavismo’s heavy-handed approach to press freedoms is often cited as something Brazil has to avoid, along with the manipulation of the courts – particularly after the same court that convicted them decided to slap those involved in the Mensalão with light sentences. For example, Justice Joaquim Barbosa, the first black member of the STF, has vigorously defended the idea that those involved in the Mensalão should get the book thrown at them. Because of this, he is lionized by opponents of the PT, and is seen as a devil by its leaders. The specter of chavismo scares those who want Brazil to align itself with a clear conception of liberal democracy and respect for free markets. To them, the 2014 election is a crucial opportunity to defeat a PT clearly seeking to implement populist political reforms.

The serious economic crisis in Venezuela calls into question Rousseff’s interventionist policies. Whether it is subsidizing gasoline and electricity á la Cristina Kirchner, or using development banks such as BNDES to finance mega-projects of dubious use for Brazil – such as the renovation of the Mariel port in Havanna. Many Brazilians believe that não há cafezinho de graça – there is no free lunch. There is a generalized fear that the bill for such splendid-yet-fiscally-irresponsible generosity will come up after this October’s election.

With so many misses and so few hits, it is highly likely that protesters will return to Brazil’s streets during June and July’s World Cup. What they want to know is why, if we can have 12 FIFA-quality stadiums, we cannot have schools and hospitals of similar quality.

Venezuela’s economic crisis turns the warning lights on for the Brazilian government, as well as for vast sectors of society, mostly those who are better informed. Chavismo’s ferociously statist policies provide a sharp warning about what should not be done here. At the same time, it highlights the importance of preserving political spaces in Brazil, providing motivation for those fighting to prevent tighter controls on the press and a current project to restrict massive street protests.

The Brazilian government may be an accomplice to Maduro’s actions against the men and women fighting in the streets of Andrés Bello’s native land, but most of Brazil’s better informed citizens are not indifferent to what is happening. I am personally invested in seeing Venezuela embrace free market economics and liberal democratic institutions. I see chavismo as hopelessly irreconcilable with these values. Radical sectors of the PT openly admire the chavista totalitarian project, and that is why events in Venezuela matter greatly for the future of Brazil’s democracy.

Finally, it is worth remembering that PDVSA did not invest a cent in the Abreu e Lima refinery, and to this day it is still not in service.

22 thoughts on “Why Venezuela matters to Brazil

  1. “…giant fuel subsidies that heavily affected Petrobras’ books and made its stock price tank,…”

    That kinda reminds you of another South American country, n’est ce pas? Can they both be that thick-headed when it comes to basic economic rules? Wow. By the way, that was an excellent analysis!

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  2. Very informative post. It would be great if Brazilian populism and its opposing fiscal conservatism could contend in future without the threat of subverting the courts and the free press.

    I know this isn’t Sao Paulo Chronicles, but a few articles on Brazil from not to election time would be welcome.

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  3. Its sad that in Latin ‘America most governments are only capable of showing solidarity to other governments never to the people which those governments tyrannize , Lat american govt leaders form an old boys club always careful to protect and advance each others entrenched interests.. People in other countries however are much more sensitive of other peoples hardships and solidary of their struggles than the govts that rule them , this is heart warming , specially for Venezuelans at this difficult time .

    Venezuelas misfortune has clearly brought the attention of many latin american peoples to the dangers posed by electing to power govts such as the Chavez regime and to the dangers of creeping despotism made possible through such govts corrupt manipulation of institutional processes. At least in this sense Venezuelas tragedy has been useful to the people of other countires in the region.

    Sometimes I suspect that some of these govts apparently friendly to the Venezuelan regime excuse their shameful conduct with the excuse that maintaining friendly relations with the regime might allow them in the future the possibility of using their carefully nurtured ‘influence’ to improve conditions in Venezuela as mediators or in some other similar capacity . Dont thing this is in any way realistic. !! Still any excuse will do to maintain their indolent complicent behaviour in a false ‘moral comfort zone’.!!. .

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  4. “that is why events in Venezuela matter greatly for the future of Brazil’s democracy.”

    Then those Brazilians, who care about the future of their democracy, must protest, during this World Cup, for Venezuelan Democracy.

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    • By this summer the Ukraine conflict would probably die out, and Brazilians will start their protests since the WC will be the perfect opportunity, by then, we will be again in the back stage. Another reason why Venezuelans need to be vocal now before another world event mute our voices.

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  5. Hopefully brasilians will get their heads out of their asses and send Dilma packing come October. I believe that people like Marco Aurelio belong in Hell.

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  6. So, the events in Venezuela are a focal point of a world-wide struggle? How would this struggle be best described?

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    • Ignorance vs Knowledge
      Good vs Evil
      Corruption vs Ethics
      Common Sense vs Indoctrination

      you can see the picture

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  7. As an I would think neither cynical nor “ideologized” outside observer I find this perspective from a different country very interesting. Opens new questions. Venezuelan Oppo-blogs tend to portray the contracts of Odebrecht in the Caribbean as cold calculated business imperialism. But is their calculation really that good? Taking into account current venezuelan payment moral and cuban get-much-pay-little attitude towards “pueblos hermanos”.

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    • Lemmy, Odebrecht is a world class company with several contracts in Europe and in the US. I don’t think they are being smart doings business with people like Maduro (someone who does not pay them) and Castro (someone who doesn’t have the money to pay). Furthermore, Odebrecht has recently lost a huge contract with the Miami airport only due to its relations with Cuba: http://www.miamiherald.com/2013/10/06/3674285/odebrecht-usa-a-master-at-winning.html
      I think Odebrecht is doing a very big miscalculation and will lose billions of dollars when Maduro and Castro fall, just like they lost when Gaddafi was deposed. At the end, they will regret what they have been doing, if they aren’t already.

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  8. Juan, thanks for listen my voice and give me a great opportunity to explain how many brazilians see the venezuelan’s crisis. I’m a lawyer and a student of Science Politics (doctoral degree) in Universidade Federal de Pernambuco (UFPE), Recife, but I was born in Belém do Pará, my lovely city in brazilian amazon (more near of Caracas [and maybe Santiago too] than São Paulo, Rio de Janeiro and Recife). I’ll keep around of here and thank you again, Juan.

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    • Oi Andre Oliveira, Eu sou um dos escritores de CaracasChronicles e queiro agradece-lhe pelo artigo neste blog. Admiro muito ao Brasil e os Brasileiros, e tambem sei que nao tudos estao dacordo com o que acontece na Venezuela ou com o PT. Tomara que no Outubro voces podam sair da Dilma e escolher um melhor partido no governo (poderia ser na minha humilde opiniao Aecio Neves, mas nao sei o que fico com ele). Obrigado! boa sorte na Copa

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    • Thanks you for supporting us from Brasil Andre and for reminding us that most Brazilians are not like Dilma

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  9. To preface my comments, I am a Venezuelan-American immigration and human rights lawyer living in the Washington D.C. area and married to a Brazilian from Sao Paulo. I feel deeply connected to both Venezuela and Brazil, and was in Sao Paulo during last year’s protests. I visit Brazil about every year and a half now, and used to visit Venezuela yearly, but have not been for 3 years, because I now have a young daughter and have had too many family members robbed at gunpoint or been victims of secuestro express to risk myself and my family now. I frequently visit this blog and spent a lot of time studying and writing about Venezuela in the past, especially from 2002-2006.

    I have heard many people tell me over the past month that they believe Venezuela is at a crossroads, that now, the government will fall, that this time, the government won’t be able to withstand the pressure from these protests. I am a bit skeptical of this, given what I experienced and studied during the 2003 paro and the 2004 referendum.

    10 years ago, I wrote my masters thesis on the politicization of civil society in Venezuela, and how civil society groups (or social organizations / movements) were acting primarily for political goals rather than social goals. There were a few organizations, primarily tied to the Catholic Church, that were trying to strike a middle ground and focus on social issues, but most groups were openly opposition or chavista. At the time, I felt that this polarization benefited Chavez’s goal of acquiring power through confrontation and minimized the opportunity for dialogue and collaboration regardless of politics that can and should exist in civil society. Meanwhile, I also felt that dealing with social problems primarily through the lens of politics and eschewing dialogue would lead these problems to worsen, not improve. I think my conclusions were accurate, because today, the regime is still in power, the country is still divided, and the problems are infinitely worse. My impressions, from what I read, see and hear, are that Venezuela remains intractably polarized between government and opposition. Although the terrible economic management of the Chavista regime has now been exposed and the repression is now worse than ever, it seems to me that as long as the polarization continues and the focus is kept on this, the government will be able to hold itself up despite its incompetence.

    Brazil’s protests last year, I think, were a good example, at least in the beginning, of how a protest movement can be very successful when focusing on social and economic goals, rather than political ones. Even though they were critical of the government, the primary goals of the protesters in June were the elimination of the public transport fare hikes and investment in health and education rather than soccer stadiums. Not surprisingly, the protests were overwhelmingly popular, and federal, state and local governments were forced to make concessions. In fact, as the violent actions of some anarchist protesters have become more prominent in subsequent protests, the movement became less popular.

    I hope that the protest movement in Venezuela can keep the focus on socioeconomic issues, not fall into the government’s traps. It worries me greatly that the government has obtained a favorable OAS resolution, as it indicates they are succeeding in spinning the story away from what had been a terribly negative situation to one where they are “victims” of the “oligarchs,” once again. Don’t get me wrong, I am a strong supporter of human rights and consider that this regime has decimated democracy in Venezuela on multiple levels. I just feel that if the focus is on socioeconomic issues, maybe the chavistas would join in protest and the government would be forced to make concessions or really be at risk of falling. I fear, however, that Venezuela’s “two realities” are too set in stone today for chavistas and opposition supporters ever to be at the same rally together (even if their interests are the same).

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  10. Let’s hope the brazilian people are capable of taking PT out of the government
    That event alone would do more good for the whole region than any other development in venezuela or brazil

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