In September 2017, Brazil’s military was deployed to manage the chaos between rival drug gangs in the Rocinha favela in Rio de Janeiro. The violence escalated to the point where the airspace over the favela was shut down. Schools, businesses, and streets were on lockdown with residents hiding in their homes using social media to communicate the events outside. The 950 soldiers deployed to the community suspect the infamous ruling drug lord Antonio Bonfim Lopes aka Nem to be behind the violence from inside prison.
Brazil is the largest country in South America, and as such it is home to as many walks of life as it is terrains. When it comes to lifestyles, income, and education levels, there is no one Brazil. You can see this just by looking at the nation’s literacy rates; despite the growth in recent years which led many economists to regard Brazil as the future of the market, as of 2015, 7.4 percent of the population was still illiterate (Central Intelligence Agency 2017).
China’s involvement in Latin America has been rapidly increasing in the past two decades with Chinese companies investing over $110 billion since 2003, but primarily in the last five years. The nature of these investments has been changing as well.
The President of Brazil, Michel Temer, once again faces the possibility of trial for corruption charges and even possibly impeachment for the second time since he came into office in August of 2016.
The Amazonian and Andean regions of South America are home to some of the richest biodiversity on the planet. Of the top ten ‘megadiverse’ countries in the world, six are in Central/South America. Four of these countries house part of the Andes, and five house part of the Amazon rainforest (Hyatt 2014).
A key indicator of ethnoracial income inequality is the difference in the probability of being poor between whites and non-whites. This probability is expressed as the percentage of individuals living below the poverty line. In Brazil, 5.2 percent of whites live below the extreme poverty line, while, for non-whites, that figure is 14.6 percent. In Bolivia, where 14.7 percent of whites live below the poverty line, the rate for non-whites is 31.5. In Guatemala, the rate for whites is 20.6, and the rate for non-whites is 46.6. To what extent does fiscal policy reduce this gap?
In the context of the massive investigation that may end decimating the Brazilian political elite, Judge Sérgio Moro initiated a new judicial process against former president Luiz Inácio Lula da Silva.
The current Brazilian crisis is not only a result of corruption scandals. Apart from corruption, fiscal and external deteriorating conditions have contributed to the ongoing political instability. Michel Temer, from the center-right Brazilian Democratic Movement Party (PMDB), started to rule after the impeachment of Dilma Rousseff (Workers’ Party – PT). Despite the fact that Temer was found to be involved in several scandals, his government had sufficient power to push for economic reforms. Temer succeeded in passing a constitutional change limiting government primary expenditures.
Following two consecutive years of recession, 2017 may mark a turning point for South America. Simultaneously mired by political scandal, high inflation, growing government debt, increasing unemployment and declining output, politico-economic turbulence in Brazil has dragged down economic activity on the continent. Though, while the new Brazilian government introduces fiscal reforms with a renewed commitment to growing the economy, there are no guarantees that Brazil’s re-emergence will necessarily benefit its neighbours if it continues its approach to regionalism.