Brazil is enduring one of its most acute crises since the return of democracy in the 1980s. Amid a sharp economic downturn, the combination of growing popular discontent and a massive corruption scandal involving state-controlled oil giant Petrobras and major construction companies has prevented President Dilma Rousseff’s administration from being able to govern effectively.
The remainder of Rousseff’s second term looks bleak. A lingering recession and expected rise in unemployment are likely to keep the political environment tense. Protests and strikes will occur more frequently. Add an austerity agenda, political bickering in congress and a somewhat unpredictable corruption scandal, and Rousseff will have a difficult time advancing the country’s economic recovery.
But not all is lost. Despite these mounting troubles and a likely worsening of the situation in the near term, there are a few bright spots in Brazil. The first is that Brazil’s institutions work. The current turmoil, which is driven by deep political and economic difficulties, does not constitute an institutional crisis. It is precisely because of the independent nature of Brazil’s legal institutions that the Petrobras corruption probe (known as Lava Jato, or “Car Wash”) became a real risk to the government. Legally, Brazil’s politicians have little opportunity to interfere in the investigations, which sets the Petrobras case apart from recent corruption scandals in other countries in the region.
Brazil Energy Insight 
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