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VP of Brazil chosen as leader of political coordination: will this provide relief or is the government headed over the cliff?

VP of Brazil chosen as leader of political coordination: will this provide relief or is the government headed over the cliff?

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Brazil?s President Dilma Rousseff recently appointed Michel Temer, her Vice President, as the person responsible for political coordination within the government. Amid the political crisis which threatens to paralyze Congress, Rousseff?s appointment seems to be a risky strategy.

On one hand, Temer is well-respected within the Brazilian Democratic Movement Party (PMDB), which is the major party in the government?s coalition. Indeed, he holds enough influence to pave the way for reconciliation between the Executive and the Legislative branches. As President Rousseff certainly believes, he could provide the relief that the Worker?s Party (PT) has desperately been looking for since the 2014 elections that split public opinion in the country.

Rousseff?s decision is a risky one in what will ultimately be seen as a last ditch effort to pacify the Brazilian political environment. Some politicians doubt his capacity to reestablish relations between several representatives and Dilma?s political team, including many from his own party. It also significantly weakens Dilma?s power and ability to govern. Ministers and other political appointees have, in succession, publically refused to do her bidding; most notably the current Minister of Civil Aviation and the Minister of Finance.

Most likely, the PMDB party will take advantage of its newfound legitimacy in government to launch a candidate for the presidential elections in 2018. Behind the scenes, the most likely name to be announced is Eduardo Paes, current Mayor of Rio de Janeiro. By passing the role of institutional relations from the hands of PT to PMDB, Dilma is strengthening the hand of what will likely be her party?s main opponent for the next election.

For the PMDB, political coordination is precisely the opportunity the party has been looking for. The party is already moving towards being more autonomous, proposing Political Reform to Congress, which if approved, would abandon its historical supporting role. On the other hand, however, many of the PMDB?s most powerful figures are caught up in the corruption scandal involving Petrobras.

If the PMDB begins to form underhand alliances, it could result in challenging years for the Rousseff administration. Her political coalition would split off to endorse opposition candidates. The current opposition parties will have to adapt to this catch-all party entering their concern. Ultimately, if the PMDB succeeds in placing their presidential candidate, investors and private companies would be well-advised to closely monitor the Brazilian framework to track the changing balance of power and the prospect of a change of government in 2018.

Regardless of future political dealings, both Temer and Rousseff have a massive challenge ahead in pacifying a deeply fragmented Congress and country.

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Ian Herbison

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