The Ailing Continent


dilma rousseff

The opening of the impeachment proceedings against President Dilma Rousseff marks the beginning of a new period of political instability in South America's largest nation. While 2015 was catastrophic for Brazil in almost every sense, -- the deepest recession since the 1930s, political paralysis and the greatest environmental disaster in the country's history -- chances are that 2016 will be worse. With the President fighting for her political life, the probability of pushing through an effective anti-crisis package has sunk to a new low, prolonging the political and economic crisis and increasing the risk of social instability. The government's woes are set to increase, as investigations into systematic corruption at Petrobras, Brazil's state-owned oil company, will further destabilize the economy.

Unemployment, poverty and inflation levels can be expected to increase further.
The internal mess has dramatically reduced Brazil's international projection by a degree unimaginable only four years ago. Facing severe budget cuts, Brazilian diplomats frequently have to cancel their participation in international conferences and negotiations for lack of travel funds. Embassies are struggling to pay their electricity bills and aid projects in Africa and the neighborhood, as well as funding for Brazilian students abroad, have disappeared. Despite being the region's dominant power, Brasília, too worried about domestic challenges, has utterly failed to pressure neighboring Venezuela's government to respect even the most basic democratic rules ahead of next week's elections.

The region's second biggest economy is in no better shape. Though temporarily invigorated by a new President, the adjustment Argentina faces after years of unsustainable populist economic policy will be even more painful than Brazil's. The new government is likely to actively reintegrate Argentina into the world economy -- yet policy makers in Buenos Aires will be acutely aware of the fact that domestic challenges at home will temporarily eclipse worries about broader international issues.

As if this wasn't enough, Venezuela, formerly South America's third economic power (now overtaken by Colombia), is the world's worst performing economy, facing a terrible mix of rising authoritarianism, extreme political polarization, economic calamity, exploding levels of violence and a public health emergency due to a lack of basic medicine. Highly active in many international institutions until recently (including through seeking questionable partnerships with Cuba and Iran, and defending human rights abusers in international fora), Venezuela has vanished from the diplomatic stage.

Brazil, Argentina and Venezuela will take years to sort out their domestic difficulties. Until then, they will struggle to regain the diplomatic projection earned in many areas during the first decade of the 21st century (including Brazil's constructive role in promoting the global debate about inequality, cash transfer programs, agriculture, public health and broader issues like the reform of international institutions). Consequently, South America is often completely absent from global discussions nowadays, even though Colombia, Chile and Peru, three star performers (though with smaller diplomatic corps), have filled to some degree the vacuum left behind by Brasília, Buenos Aires and Caracas.

At a time of momentous change in international affairs (including the shift of economic and political power towards Asia, the emergence of new China-led institutions, the worst refugee crisis since World War II and an ongoing debate about humanitarian intervention), South America will largely be a mere bystander.

Read also:

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Photo credit: Reuter Media