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Brazil’s agony hits home in Florida

Post on March 14, 2016, 1:12 pm by the-victoria-law-group 0 Comments

With Americans fixated on the political drama of the 2016 presidential primaries and Tuesday’s vote in Florida, it’s been easy to miss what’s going on in our own hemisphere — including the economic and political collapse of the largest country in Latin America.

Brazil is in a very bad way. President Dilma Rousseff is scraping bottom as her popularity plunges into single digits in poll after poll amid a huge corruption scandal. Many have demanded her impeachment. Last week, state prosecutors in São Paulo filed charges against the once untouchable former president, Luis Inacio Lula da Silva, in a related corruption case, and now want him arrested.

He had been detained for questioning after his house was raided by security agents as part of the same scandal, and the net is closing in on other elected officials and business executives.

Simply put, the scandal involves a scheme that siphoned hundreds of millions of dollars from Petrobras, the country’s national oil company, and funneled the money to political campaigns. The amounts of money alleged to have been stolen are staggering.

Dramatic events unfolded last week: A judge sentenced Marcelo Odebrecht, the former president of the country’s largest construction company, to more than 19 years in prison for involvement in the Petrobras imbroglio. His company built several major public projects in Miami, by the way. On the same day that the ax fell on Odebrecht, once powerful Sen. Luiz Estevao turned himself in to begin serving a more-than-20-year sentence for misappropriating up to $100 million in government funds during construction of a federal courthouse in the early 1990s.

The economy, inevitably, has suffered the impact of all the thievery and loss of confidence in the country’s leadership: Earlier this month, economists reported a 3.8 percent plunge in the gross domestic product in 2015, the worst decline in 25 years. Inflation stands at 11 percent, and unemployment is soaring.

So what does this mean for us?

First, it’s bad for Florida in terms of jobs and commerce. Brazil is consistently ranked the state’s No. 1 trading partner. In 2014, Florida sold everything from aircraft engines and parts to medical and surgical equipment to Brazil, to the tune of $15.9 billion. Total trade was more than $20 billion. The balance of trade in Florida’s favor was about 4-to-1, but Brazil will be importing less for awhile.

Second, it’s probably bad for Miami real estate. Brazilians have been on a buying spree all over South Florida in recent years as the economy prospered. That may cool off, although the capital flight that usually follows a regional economic collapse could wind up here.

Third, and most important, it’s bad for the people of Brazil and the region as a whole. Latin America’s boom-and-bust cycle is both the cause of the region’s political problems and a reflection of its corrupt politics. It’s why people don’t have faith in the political system.

Brazil is fortunate to have gutsy prosecutors and judges who take their jobs seriously. Their role is crucial. If Brazilians can clean up their own massive scandal, it will send a message to the region that those who commit wrongdoing, no matter who they are, will ultimately pay the price. No more untouchables; the rule of law, indeed, is the rule.

That’s the only way to fulfill the hopes of Brazilians who want to believe that democracy and self-government can produce justice, even if belatedly.

Read  Miami Herald article here:

http://hrld.us/1ppOrDN

Presented by Miami International Business Attorney

Filed Under: Americans in Brazil

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