Collor, corruption, and inflation

Brazil’s old-regime elites and military continued to inhibit reform of the political system in the early 1990s, while the country’s voters became disaffected and cynical, and the political parties remained superficial, depending on personality cults rather than platforms that addressed specific problems. In the final round of the 1989 elections, Fernando Collor de Mello of the small National Reconstruction Party faced Luiz Inácio Lula da Silva, known by his nickname Lula, of the Workers’ Party (Partido dos Trabalhadores; PT), which presented an uncommonly well-articulated platform and a clearly socialist ideology. Collor nevertheless gained the support of most of the parties of the Sarney government and campaigned for economic growth, modernization, and eliminating government corruption and inefficiency. Although roughly one-fifth of the votes cast were abstentions or were nullified, Collor was declared the clear winner, and he took office in March 1990.

Collor’s government failed to improve the economy and was consumed by a corruption scandal in mid-1992. Millions of dollars from influence peddling had flowed into the president’s secret bank accounts. On September 29 the House of Representatives overwhelmingly voted to suspend and impeach Collor, and on December 29, minutes after the Senate opened the impeachment trial, he resigned. Vice President Itamar Franco assumed the presidency, marking the first time that the republic resolved a major political crisis without military intervention or arbitration. Investigations subsequently gained momentum and revealed further corruption at the state and federal level, including influence peddling, electoral fraud, and irregular banking procedures.

Franco had taken office with the support of both civil and military leaders, but he represented a political party whose ideology was markedly different from that of Collor and thus failed to inspire great confidence in the Brazilian people. Industrial production and the incomes of the overwhelming majority of Brazilians continued to decline, while the annual inflation rate accelerated drastically to nearly 2,700 percent; meanwhile, the country paid massive amounts of interest to service its foreign debt. Some proposed reorganizing Brazil’s political system as a way to emerge from the crisis, but a special plebiscite in April 1993 decisively rejected either a parliamentary or monarchical system; however, the following year Brazil adopted six constitutional amendments, including one that reduced the presidential term from five to four years in anticipation of permitting reelections (a question that was left to future legislative action).

The Real Plan and Cardoso presidency

Franco appointed as finance minister Fernando Henrique Cardoso, who put forth the Real Plan, a financial program partly inspired by a successful Argentine plan. The program stopped the government from periodically raising prices (a practice known as indexing inflation), introduced a new currency (the real) and an exchange rate that was partially linked to that of the U.S. dollar, and called for curbs on government spending. The Real Plan succeeded without severely limiting economic growth, and Cardoso’s resulting popularity encouraged him to run for president; many regarded him as a dynamic, modernizing leader in the mold of Kubitschek or Vargas who would guide the country through shifts in the global economy while simultaneously resolving domestic crises. Cardoso won the election by a wide margin over Lula, the perennial leftist candidate. Policies enacted during his first term (1995–99) permitted strong economic growth while lowering the annual inflation rate even more dramatically—from nearly 1,000 percent in 1994 to less than 20 percent within a year and nearly zero by 1998. The political parties backing Cardoso’s policies won a majority of the 1996 municipal elections.

Cardoso pushed through a law in 1997 that permitted presidents and governors to be reelected. His Brazilian Social Democratic Party formed a coalition with the Liberal Front Party, the Party of the Brazilian Democratic Movement, the Progressive Renewal Party, and several smaller entities to enact major fiscal and administrative reforms, notably the decision to privatize such government-owned enterprises as the Rio Doce Valley Company. Brazil’s economy slowed as a result of financial crises in Asia and Russia in 1998, but Cardoso retained his popularity, won reelection to the presidency (again over Lula), and saw his coalition retain a decisive congressional majority.

The government subsequently attained support from the International Monetary Fund, carried out additional fiscal and administrative reforms, and devalued Brazil’s currency by allowing its exchange rate to float rather than continue its near parity with the U.S. dollar. Inflation remained under control, in spite of fears to the contrary, and the military seemed unlikely to intervene in civil affairs in the near future. Cardoso appointed a civilian-led minister of defense, whose duties replaced those of the separate military service ministers. The governing coalition fragmented, however, as parties and politicians maneuvered for advantage in the October 2000 municipal elections. Still, a record harvest and robust economic growth allowed Cardoso to move forward with his programs.

Lula’s leftist political agenda

Cardoso constitutionally was barred from standing for reelection in 2002. Lula emerged once again as the leading opposition candidate against government-backed José Serra of Cardoso’s Brazilian Social Democratic Party. On October 27 Lula easily defeated Serra, garnering 61 percent of the vote, and on January 1, 2003, Cardoso oversaw the first transition from a democratically elected president to a democratically elected successor in Brazil in more than 40 years. Lula’s win swung the country’s political agenda to the left as he became the country’s first president from a labour-oriented party. He moderated the rhetoric of the leftist platform he had presented in past elections, and soon after taking office he instituted austerity measures aimed at keeping inflation in check. Under his leadership, Brazil issued bonds in its own currency, instead of the dollar, for the first time. Employment and real wages rose. Major priorities of his administration included reforming social security, pension, and tax policy, combatting hunger and poverty, and enhancing educational opportunities, particularly for poor children. Lula’s presidency was plagued by scandals, however, which included party members soliciting bribes for public works projects and the use of undeclared loans to repay campaign debt. Many Workers’ Party officials were forced to resign.

In 2006 Lula won a second term as president in a runoff election against Geraldo Alckmin of the centrist Brazilian Social Democratic Party. Though Lula’s party was still scarred by scandal, the Brazilian economy continued to grow under his administration. He enacted reforms to increase public investment and control spending. Agricultural and mining operations persistently expanded, and foreign investors and major trading partners showed renewed interest in the country. However, many problems persisted. The country’s cities were ill-prepared to serve the needs of their growing populations, and, in spite of increased regional growth, Brazil’s economic opportunities and population remained heavily concentrated in two regions, the Southeast and the South. Brazil also remained embroiled in domestic and international controversies regarding threats to the Amazon rainforest and to forest-dwelling Indian groups such as the Yanomami. Moreover, landless groups continued to clamour for agrarian reform.

In June 2009 President Lula signed a bill legalizing the landholdings of nearly one million residents of state-owned land in the Amazon basin. The bill was an effort to control the decades-long land-grabbing situation in the rainforest, wherein settlers and speculators had occupied and exploited a vast area of public land without legal permission. Under the new law, farmers, loggers, and other settlers who occupied small areas received the title to their land for free; occupiers of larger parcels of land were required to purchase them. Environmentalists complained that the law would encourage extensive use of the land and lead to deforestation.

The Petrobras scandal, impeachment of Rousseff, and Temer interregnum

Unable to run for a third consecutive term, Lula endorsed his former chief of staff, Dilma Rousseff, as the Workers’ Party candidate in the 2010 presidential election. Her challengers in the October poll were José Serra, Lula’s Social Democratic rival in the 2002 election, and Marina Silva of the Green Party. Rousseff won nearly half of the vote, but, because she fell short of a majority, she and the runner-up, Serra, met in a runoff in October, which Rousseff won convincingly (56 percent to 44 percent) to be elected Brazil’s first woman president.

Shortly after taking office at the beginning of January 2011, Rousseff was confronted with one of Brazil’s worst natural disasters in decades: torrential rain created flash floods and mudslides that left thousands homeless and killed more than 500 in several mountainside communities just north of Rio de Janeiro. Hardest hit were the cities of Petrópolis, Teresópolis, and Nova Friburgo.

Following a sustained period of robust expansion, the Brazilian economy began to cool down in 2011 in response to the deteriorating global economy and a contraction in the Brazilian industrial sector. The country’s GDP growth declined from about 7.5 percent in 2010 to about 1.0 percent in 2012, though unemployment remained low. Throughout 2011 the Rousseff administration faced accusations of corruption, with allegations of influence peddling and other malfeasance leading to the resignations of five cabinet ministers by the end of the year.

As Brazil ramped up for its role as host of the 2014 football (soccer) World Cup and for Rio de Janeiro’s hosting of the 2016 Olympic Games, there was growing discontent among many Brazilians with the government’s expenditures on infrastructure for those events while education and health needs were seen as going unmet. In mid-June 2013 Brazilians across the country took to the streets to protest that as well as a raft of other issues, including government corruption, the administration’s handling of the struggling economy, and recent examples of heavy-handed police response to demonstrations. The public outcry spread from São Paolo—where police used rubber bullets on June 13 to quell protests over public-transportation fare hikes—to scores of other Brazilian cities. On June 20 some one million people demonstrated in towns and cities throughout Brazil.

In the wake of that turmoil, Rousseff’s approval rating tumbled from 65 percent to 30 percent at one point in 2013. Her popularity rebounded as the staging of the World Cup itself went largely according to plan in summer 2014, but a loss by the Brazilian team to Germany in a semifinal match (arguably the worst defeat in Brazil’s proud World Cup history) seemed to return national attention to the country’s social and economic woes (including the economy’s slide into recession early in 2014). In September the Brazilian delegation chose not to join more than 150 other countries in signing an anti-deforestation pledge at the climate-change summit in New York City, claiming that the pledge had been drafted without Brazilian participation. That refusal occurred as Rousseff faced a formidable challenge from the candidate of the Brazilian Socialist Party, green activist Marina Silva, in the first round of voting in the presidential election in early October.

Rousseff fended off Silva’s challenge with an aggressive negative campaign and finished atop the first-round candidates with nearly 42 percent of the vote (Silva took only about 21 percent). The president, however, did not reach the 50 percent level necessary to prevent a runoff, which would pit her against the surprising second-round finisher—the Brazilian Social Democratic Party’s Aécio Neves, the former governor of Minas Gerais state, whose late surge garnered him about 34 percent of the vote. The runoff in late October proved to be one of the closest presidential elections in recent Brazilian history: Rousseff won a second term by capturing more than 51 percent of the vote against more than 48 percent for Neves.

In early 2015 Brazil’s economy continued its slide, inflation rose, the deficit grew, and the Rousseff government’s efforts to combat those problems were complicated by its embroilment in arguably the country’s biggest political scandal to date. By March a mounting investigation of corruption had resulted in the indictment of dozens of politicians and businesspeople. Petrobas officials, the Workers’ Party and some of its members, and members of its coalition partner, the Party of the Brazilian Democratic Movement (PMDB), were accused of having received kickback payments for Petrobras contracts from a number of prominent companies, including a cartel of construction firms. Although an investigation by the attorney general cleared Rousseff of any involvement in the affair—she had served as the chairman of the board for Petrobras for much of the period during which the alleged kickbacks were made—many Brazilians doubted her ignorance of the alleged malfeasance. On March 15 some one million Brazilians took to the streets throughout the country to protest the government, its handling of the economy, and the scandal. On April 12 more mass demonstrations were held, and, though the crowds were not as large, their focus shifted to calls for Rousseff’s impeachment.

May marked the first reported appearance in Brazil—and in South America—of Zika fever, which is caused by a mosquito-borne virus similar to the one that causes dengue and which has been associated with neurological complications. The Zika virus was especially dangerous for pregnant women. Between October 2015 and January 2016 nearly 4,000 babies born with microcephaly (abnormal smallness of the head) were reported in Brazil; the mothers of many of those babies were presumed to have been infected with Zika virus. Concerned not only about the health of its citizens but also about the effect that the virus might have on the Olympic Games in Rio de Janeiro in August 2016, the Brazilian government undertook aggressive measures to combat the outbreak of the virus.

But those concerns largely took a backseat to politics and economic matters in 2016, as the Petrobras scandal mushroomed and the Brazilian economy remained mired in its worst recession since the turn of the 20th century. The tentacles of the scandal reached so far as to ensnare Lula, who was formally charged with money laundering in March 2016. Although Rousseff was not implicated in the scandal, she came in for withering criticism when she sought to appoint Lula to her cabinet, a step that was decried as an attempt to protect him from prosecution. The outcry for Rousseff’s ouster spread through the public and the government, and her partners in the ruling coalition began to desert; the PMDB, the largest party in the Chamber of Deputies, left the government first. On April 17 the Chamber of Deputies voted to recommend impeachment on charges that Rousseff had manipulated public bank funds to mask budget shortfalls in the run-up to her reelection in 2014. On May 12 the Senate voted to suspend Rousseff and to consider impeachment. Vice Pres. Michel Temer of the PMDB became acting president. On August 10 the Senate voted to hold an impeachment trial of Rousseff, which began on August 25. After Rousseff answered questions for more than 14 hours on August 29, the Senate voted 61–20 on August 31 to permanently remove her from office. Temer stood to complete Rousseff’s term, which was to end in January 2019.

Temer sought to revive the economy by promoting pro-market policies, calling for austerity measures, and pushing for pension and labour-law reform. By May 2017, however, his efforts were increasingly undermined by growing accusations of his own involvement in the Petrobras scandal. In July Lula was convicted of corruption and money laundering, the first of five charges that he was facing. He was sentenced to nearly 10 years in prison but remained free pending appeal. When an appellate court in Porto Allegre upheld his conviction on January 24, 2018, it not only pointed to Lula’s imminent incarceration but appeared to prevent him from running for president in October 2018 under the prohibitions of the Clean Record law. Lula, however, still had the option of appealing the appellate court’s ruling to the Supreme Court. There was also speculation that he would appeal the prohibition on his candidacy. Even with the conviction hanging over his head, opinion polling showed Lula to be the leading candidate for the presidency by a large margin.

On April 5, 2018, however, the Supreme Court voted 6–5 to deny Lula’s request to remain free while he pursued his final appeal options. Lula was ordered to turn himself in the next day to begin serving his prison sentence. Instead, surrounded by a large crowd of supporters, he took refuge for two days outside São Paulo in the headquarters of the union where he had begun his political career. On April 7, after delivering an impassioned speech in which he once again protested his innocence but affirmed his belief in the rule of law, Lula gave himself up and began serving his sentence.

Despite Lula’s incarceration, the Workers’ Party chose him as its presidential standard bearer at the party’s national convention in early August. After the Superior Electoral Court ruled on August 31 that Lula was “ineligible” to run for the presidency, the former president announced on September 11 that he was ending his candidacy, and he threw his support behind his running mate, Fernando Haddad, former mayor of São Paulo. In the process, Lula’s position as the front-runner was taken over by Jair Bolsonaro, a far-right populist whose law-and-order anti-corruption rhetoric seemed to resonate with much of a Brazilian electorate that was fearful of rising crime and violence, disenchanted with the country’s widespread political corruption, and weary of Brazil’s still-struggling economy.

The Bolsonaro presidency

Bolsonaro, a former army captain and seven-term legislator who expressed controversial admiration for Brazil’s past military rulers, also won the support of the country’s considerable Evangelical Christian population with his steadfast opposition to abortion. At the same time, his history of having made remarks that were interpreted by some as homophobic, misogynist, and racist evoked strong opposition to his candidacy from many on the left. At a campaign appearance in Juiz de Fora on September 6, Bolsonaro was the victim of an assassination attempt in which he was stabbed. His wounds, which required lifesaving surgery, forced him to campaign from a hospital bed and then at home, and he finished far ahead of the rest of the 13-candidate field in the first round on October 7, though he did not capture the 50 percent of the vote necessary to preclude a runoff. Bolsonaro took about 46 percent of the vote, compared with about 29 percent for Haddad—who would be his opponent in the October 28 contest—and some 12 percent for Ciro Gomes of the Democratic Labour Party. Bolsonaro then went on to win the runoff convincingly, taking more than 55 percent of the vote, with about 45 percent going to Haddad and the remainder blank or invalid votes.

Bolsonaro’s presidency was controversial and politically polarizing. Presidential actions that delighted his supporters frequently infuriated the opposition. Bolsonaro rang up a big policy win by making good on his campaign promise to reform Brazil’s national pension scheme, but his all-but-official support of deforestation in the Amazon region was much less broadly popular. His government ignored the illegal loggers who slashed and burned trees on protected land, clearing the way for cattle ranching and mining but undermining the rainforest’s beneficial effects on the climate. When forest fires in the region blazed in July and August 2019 at levels not witnessed for a decade, there was an uproar both within Brazil and from the international community. By October the threat had abated, but some 2,930 square miles (7,600 square km) of rainforest had been destroyed in the first nine months of the year.

Many observers blamed Brazil’s tragically inadequate response to the spread of the potentially deadly disease COVID-19 squarely on Bolsonaro’s shoulders. In March 2020, soon after the World Health Organization declared the outbreak of the coronavirus SARS-CoV-2 (which caused the disease) a global pandemic, state and local governments in Brazil instituted aggressive social-distancing and lockdown measures to combat the disease. However, a Brazilian health-care system that was generally well positioned to combat the pandemic faltered badly, largely because of the federal government’s lacklustre response, driven by Bolsonaro. He repeatedly downplayed the disease’s severity, mocked protective mask wearing (even after he himself contracted COVID-19), and blocked attempts to lock down elements of the economy to try to contain the public health crisis.

Still, Brazilian hospitals and health-care workers weathered that first wave of the pandemic relatively well. By August 2020 the number of virus cases and virus-related deaths had dropped dramatically, but a second wave of the virus began crashing down on Brazil in November, partly because many Brazilians had relaxed their adherence to prevention protocols but also because of the slow rollout of the country’s vaccination program, which was undermined by Bolsonaro’s specious claims that the vaccinations posed health hazards. As the disease spread in Brazil, it mutated, producing a new, more easily transmissible strain, P.1, which reached throughout the country after originating in Manaus late in 2020. Brazil became the raging epicentre of a massive outbreak that extended throughout Latin America. By mid-May 2021 more 15,000,000 Brazilians had contracted the coronavirus and more than 428,000 individuals had died from COVID-19-related causes. Brazil went on to suffer more COVID-19-related deaths than any other country in the world but the United States.

The return of Lula

Bolsonaro’s prospects for reelection in the 2022 presidential contest dimmed in March 2021 when Lula became eligible to be a candidate after a Supreme Court judge dismissed the charges against the former president, who was then released from prison. In July 2022 the Workers’ Party chose Lula as its official president. In the meantime, without evidence, Bolsonaro cast doubt on the integrity of Brazil’s electronic voting system and indicated that he might not accept the results of the upcoming presidential election. Tensions were high, and the threat of violence loomed when the deeply polarized Brazilian electorate cast their ballots in the first round of the presidential election in early October. Bolsonaro reduced the lead that Lula had held over him in preelection preference but still came up short in the vote, taking some 43 percent of the first round ballots, compared with about 48 percent for Lula. Having easily outdistanced the other nine candidates in the field, the two then met in a runoff election on October 30, which Lula won by a thin margin (roughly 51 percent to 49 percent) to return to the presidency.

In the aftermath of the election, supporters of Bolsonaro unleashed a wave of angry protests of the results, most notably blocking traffic on hundreds of the country’s roads and highways. After an initial period of silence, Bolsonaro indicated that he would cooperate with the transfer of power to Lula, though he never explicitly conceded defeat. Spurred by Bolsonaro, the military undertook an investigation of the electronic voting processes employed in the election. While the military’s report found no evidence of malfeasance, it did not rule out the possibility that fraud could have occurred, leaving the door open for Bolsonaro’s supporters to continue to claim that the election’s results were illegitimate. On January 8, 2023, in scenes that were reminiscent of the January 6 U.S. Capitol attack, thousands of Bolsonaro’s partisans, clad in the green and gold of Brazil’s flag, stormed the country’s Congress, presidential palace, and Supreme Court, wreaking havoc and destruction in the halls of Brazilian democracy in response to Lula’s inauguration roughly a week earlier.