Brazil’s Looming Budget Cap Is Bad News For BRICS

Michel Temer and his fellow usurpers are trying to push through a showcase piece of legislation in the aftermath of their successful ‘constitutional coup’ against Dilma Rousseff. The reactionary measure calls for federal spending to be capped for a period of 20 years, increasing only at the rate of the previous year’s inflation. Supporters of this initiative say that it’s a necessary and long overdue move to balance Brazil’s runaway deficit, while detractors decry the fact that it might stifle social development and stagnate the economy. The issue is proving to be the most controversial one in Brazil nowadays, and the Worker’s Party opposition is demanding that it be put to a referendum for the people to decide. The ruling coalition, however, wants to skirt direct democracy and have all of this handled in the legislature, where it will probably end up passing in the near future after a few technical amendments are made to it. 

Induced Privatization Driven By Institutionalized Stagnation

Brazil is one of the world’s largest economies and a founding member of BRICS, so the looming implementation of this initiative is expected to affect much more than its Latin American neighbors if it is indeed put into effect. This is even more so the case when one remembers that it’s supposed to last for a fifth of a century, which is an eternity in economic terms, especially amidst the ongoing fast-changing pace of global technological and structural developments. Critics are justified in believing that a cap on government spending at precisely this moment and for such a long-running duration of time will retard the country’s social and physical development, amounting to Brazil losing its competitive edge and backtracking on all of the gains that it’s made since former President Lula de Silva first entered into office in 2003 and turned the country into a Great Power. 

There are legitimate fears that the self-imposed financial restraints that Brazil is legally mulling will make it unable to flexibly adapt to any unforeseen economic, social, and/or other sorts of crises during this extended time period, thus irresponsibly putting the entire nation at the highest degree of strategic risk for absolutely no reason at all other than satisfying the short-term urgings of one half of the highly polarized electorate.

The institutionalized developmental stagnation that will inevitably set in could only be reversed through the aggressive privatization of the social and infrastructural sectors of the economy and the procurement of foreign loans, so cynically speaking, Temer and his allied coup conspirators are trying to induce the large-scale privatization of the country through the façade of demagogic politics in order to reap a handsome dividend from this pecuniary process. 

False Hopes

The reason why this is such a threat for BRICS is because it’s anticipated that the US and other Western countries and their affiliated institutions (e.g. IMF, World Bank, etc.) will step in to fill this artificially created demand and thus make great strides in pulling Brazil away from the emerging multipolar world order that it’s supposed to be a part of and tying it ever more strongly to the existing unipolar one. The only developments that could avert this scenario would be if the government puts the issue up to a referendum and it loses, the Worker’s Party uses reverse-Color Revolution technology to return to power, or the military unexpectedly intervenes under whatever the pretext may be and ends up reversing this legislation alongside whatever else they choose to change. For as enticing as they may sound to outsiders, none of these possibilities appear likely and multipolar supporters shouldn’t get their hopes up that any of them will happen.  

Temer and his associates are unsure that their controversial and highly polarizing proposal will pass and they can’t afford to have it defeated at the polls and thus deal a heavy normative blow to their post-coup ‘government’, which explains why they’re so strongly against a referendum.

Likewise, because of the regime change that they carried out, they’ll likely do whatever they can to hold onto power and not be expelled themselves, which is why it’s forecasted that they’ll order the police and military to resort to force in crushing any incipient Color Revolution against their rule. As for a military coup, there aren’t any convincing indicators that this could happen anytime soon, and if anything, this branch of the “deep state” (permanent military, intelligence, and diplomatic bureaucracies) can be described as tacitly in support of Temer’s anti-multipolar coup by the very fact that they passively allowed it to happen. 

The “Third Force”

There is, however, a very faint chance that the political inquisition (“Operation Car Wash”) being carried out by the courts against both the former multipolar ruling party and the current unipolar usurpers could result in some unforeseen changes of power in the future, but at this moment it’s unclear exactly what the organizers’ end game truly is. One could have confidently claimed that the judges were only out to get Rousseff and facilitate the preplanned ‘constitutional cup’ had they stopped their investigation after her removal from office, but they instead continued the anti-corruption probe and even recently arrested coup-mastermind Eduardo Cunha. From the looks of it, the people behind “Operation Car Wash” are determined to bring down as many politicians as they can, whether multipolar or unipolar, and it’s very likely that more high-ranking coup plotters will also be arrested and have their careers ruined for their involvement in this corruption case.  

What nobody is sure of, though, is exactly what the judges and the people behind them hope to achieve by targeting both of Brazil’s main political factions. While it’s possible that this ‘third force’ is motivated solely by “enforcing the law” and “bringing all criminals to justice”, it could also be argued that there’s a more nefarious intention behind its actions, which is to ‘clean out’ and ‘purge’ all the public faces representing the “deep state”. Whatever shadowy faction is behind all of this might even be proceeding according to a long-term plan of systematically sidelining all of their rivals across the political spectrum prior to pushing their desired proxy into the spotlight to take power. It’s obvious at this point that the inquisitors are acting based on the legally compromising information that they received from the NSA and other American intelligence agencies implicating a broad segment of Brazil’s political establishment, but it looks like they’re not content with only doing the US’ bidding by removing Rousseff and that some of them are ‘going rogue’ in attacking Washington’s post-coup political surrogates. 

The Regime Change No One Saw Coming

Because of this, it’s possible that the “deep state” organizers behind this large-scale ‘cleaning’/’purging’ are trying to seize the moment of political confusion and upheaval in order to get rid of as many of their opponents as possible as a means of facilitating the rise of a hitherto (relatively) unknown political actor who will “save the country” from its far-reaching political turmoil. This template structurally replicates that of traditional military coups though without the formal military component, having been a post-modern coup in that it was carried out completely behind the scenes and using nominally ‘legal’ means.

Judging by the track record behind them in getting Rousseff kicked out of the Presidency, this ‘third force’ isn’t friendly to the multipolar world by any measure, yet at the same time and as the saying goes, “the revolution devours its children” and some of the unipolar coup conspirators are now falling victim to the very same inquisition that they took part in against Rousseff.

Therefore, while it can’t be predicted with any given degree of solid confidence, one shouldn’t rule out that the ‘third force’ behind “Operation Car Wash” won’t stop with their anti-Rousseff regime change operation and will in fact go as far as ‘cleaning out’/’purging’ Temer and as many other politicians as they can in their quest to install “one of their own” in power afterwards. One of the many consequences that this would have might be that the controversial budget cap legislation is either repealed or temporarily cancelled and put up to a referendum, which in turn might result in it being done away with. So as not to be misunderstood, the author isn’t forecasting that this will definitely happen, but believes that the scenario is at least plausible enough to countenance given that the ‘third force’ is now targeting some of the same pro-American leadership that they helped come to power after having created the ‘constitutional’ circumstances for their coup in the first place. 

Multipolar Management

In the absence of any of the unlikely aforementioned leadership changes that could end up reversing Brazil’s looming budget cap, Russia and China must actively cooperate in presenting attractive financial solutions that save the multipolar integrity of their fellow BRICS partner. Some people might suggest that these countries use the New Development Bank’s financial resources in offering low-interest loans to Brazil during this troubling time and in order to beat out their Western competitors, but while this proposal sounds ideal in theory, it’s impossible to carry out in practice because the said institution is geared exclusively towards developmental-infrastructural projects (hence the name) and does not have the authority to simply loan money to satisfy one member’s budgetary shortfalls. It’s true that this platform could be useful in financing important New Silk Road projects in Brazil and preventing them from falling under the control of Western bankers, but this is dependent on Brasilia asking for the assistance in the first place, which might not be forthcoming if Temer and the post-coup elite were strictly ordered to only accept Western loans. 

It’s a long shot, but if the remaining BRICS members collectively or individually offer very competitive financing to Brazil, then Temer or any of his possible successors might be in a position where they can’t rationally refuse these loans without inciting even more public anger against their rule and advancing the prospects of a reverse-Color Revolution. The same conundrum is still in play, however, and it’s that the authorities could just order the police and military to take a hardline response to any anti-government demonstrations, essentially heralding in yet another period of de-facto military rule in the country (even if there is no formal military coup and the generals only rule behind the scenes). Therefore, it can’t be assured that Brazil would accept even the best financing package on offer from its multipolar partners, though that doesn’t meant that they shouldn’t try to compete with the West and ‘save Brazil from itself’. In terms of the bigger picture, it’s much better if multipolar BRICS countries have a larger financial stake in a rapidly privatizing Brazil than if the US and its allies do, since they could thus fight to keep the South American country out of the unipolar world’s total clutches long enough for the Brazilian people to hopefully reverse the institutional effects of the coup after the planned October 2018 elections.