Rousseff bats for “belt-tightening” to tide over economic stagnation
March 21, 2015, 7:31 am

Dilma Rousseff (center) at the opening of an ecological harvest and storage unit in Rio Grande do Sul on 20 March 2015 [gov.br]

“Together, by approving the belt-tightening measures, we will get out of this soon,” Rousseff said at an official event in southern Rio Grande do Sul state, taking place in conjunction with Brazil’s Landless Workers Movement (MST).

“Belt-tightening is part of life. Everyone does it. We’re not belt-tightening because we like it, we are doing it so the country can continue to grow, generating employment and carrying out social policies,” she said.

The president is trying to push through the unpopular measures at a time when public patience with officials is at an all-time low, thanks largely to an ongoing corruption scandal at state oil giant Petrobras.

Over the weekend, disgruntled Brazilians took to the streets in anti-government demonstrations in a bitter reminder of the split in Brazilian society. Ahead of the weekend protest, thousands of supporters of Dilma Rousseff gathered in several cities to show their allegiance to her and defend state-controlled oil giant Petrobras, which has been targeted by corruption allegations.

Trade union members, students, left-wing activists and citizens called for the defense of democracy and the legitimacy of Rousseff’s government, saying that calling for her impeachment without legal basis is nothing more than a coup.

Rousseff, who began her second term as president in January, last year tried to revive the slowing economy through numerous incentive packages, but they failed to spur economic activity.

Underscoring the importance of adopting the fiscal measures, she said the government “has no way to continue absorbing” the costs of the previous incentives and had to try a different approach.

The Organization for Economic Cooperation and Development (OECD) predicts that Brazil’s economy will contract 0.5 percent in 2015, according to a report released on Wednesday.

The figure, presented in an economic update compiled by the Paris-based agency, represents a downward adjustment of its earlier November forecast, which projected 1.5-per cent growth for the South American giant.

Brazil, the only country of the 11 listed to expect a contraction, is also projected to struggle in 2016, with predicted growth of 1.2 per cent, down from the 2 per cent forecast in November and the lowest growth rate of the countries listed.

Brazilian commentators have pointed out the divide in the country as sharp following a divisive electoral campaign in the presidential elections in 2014. President Rousseff won handsomely in the states where the celebrated Bolsa Familia social welfare program had greater reach and implementation

“Tracking the heat map of voter allegiances, we can see a divided country,” say Samy Dana and Leonardo de Siqueira Lima, economists at Brazil’s premier Fundação Getulio Vargas (FGV).

TBP and Agencies