Petrobras scandal is already overshadowing Brazilian President’s second term
Brazil President Dilma Rousseff.
It’s not been a good week for Dilma Rousseff.
Barely two months into her second term, Brazil’s president is on the ropes, struggling with a stuttering economy and the ever-expanding corruption scandal at Petrobras.
The other stories that have garnered column inches this week also make for painful reading – warnings of recession, drought and water rationing in Sao Paulo, water pollution horrors ahead of the 2016 Olympics, a stray-bullet epidemic in Rio claiming the lives of innocents… the bad news just keeps on coming.
This week’s developments at Petrobras are crucial. The explosive allegations that the treasurer of Rousseff’s Workers’ Party (PT) diverted US$200 million to the party’s finances over a 10-year period, revealed via a leaked plea-bargain testimony from a former company exec, are the most damaging of the lot and will harden perceptions that corruption is endemic.
Petrobras.
Attention should also be paid to the handling of the changes at the top at Petrobras – the departure of CEO Maria das Graças Foster was anything but smooth. A private meeting between the two led to reams of press speculation that Rousseff was going to fire her ally. The government refused to provide context for the meeting, denied changes were in the works and then, the next day, Foster resigned, along with five other senior managers.
Attention should also be paid to the handling of the changes at the top at Petrobras – the departure of CEO Maria das Graças Foster was anything but smooth.
Shares in Petrobras, which have fallen so drastically since September were suddenly on the up. The market, optimistic, hopeful that Rousseff would appoint someone with a fresh outlook – like the appointment of Joaquim Levy – was disappointed with the choice of Banco do Brasil head Aldemir Bendine, a man seen as close to the PT, and the value of the company promptly fell again.
Rousseff, already being confronted by the new-look congress, must find a way to get investors and the country onside and the graft investigation, which is creeping closer to her inner circle, is so damaging that one controversial op-ed in Folha de Sao Paulo this week even called for her impeachment.
Many more challenges lie ahead.
@urlgoeshere
An edited version of this column was published in the Buenos Aires Herald, on Sunday, February 8, 2015 as part of the ‘Perceptions’ series.
Link: http://www.buenosairesherald.com/article/181455/-dilma%E2%80%99s-week-to-forget.