The Call

Brazil’s middle class remakes the political landscape

Brazil’s middle class remakes the political landscape

By Christopher Garman

Over the past decade, Brazil has undergone a quiet socioeconomic revolution. From 2003 to 2009 nearly 30 million Brazilians entered the middle class, which now accounts for more than half of the population. These new entrants are now clamoring for improved quality of life, not just access to steady jobs and wages. The change in aspirations is remaking Brazilian politics, a process which can be seen in President Dilma Rousseff’s recent overhaul of the Ministry of Transportation following allegations of corruption.

Rousseff’s comprehensive housecleaning of the Transportation Ministry followed the early July publication of corruption allegations in the weekly newsmagazine Veja. It sent a strong signal to congressional allies that she wants to improve government efficiency and will be less tolerant of corruption. Rousseff dismissed 18 people, most of them political appointees, including ex-transportation minister Alfredo Nascimento, from the Party of the Republic, or PR (an ally in the lower house), and senior ministry officials from the ruling Workers’ Party. The president also announced other ministries could follow and signaled that no political appointees would be spared if corruption were found.

Rousseff’s stance could be explained by her own technocratic profile. She is pragmatic and wants results, particularly in the run-up to the 2014 World Cup and 2016 Olympics. The cost of turning a blind eye to corruption among those running agencies and ministries is growing. But the rise of the middle class is a more important structural factor.

As recently as 2005, jobs and wages were the top demands of voters. But greater economic prosperity has brought greater aspirations. The new middle class unsurprisingly wants better health care, better education for their kids, and better neighborhoods to live in. Polling conducted by Ipsos Public Affairs, for example, demonstrates a significant increase in concern over these three issues from 2005 through 2010 and a proportionate drop in concern over wages and income. According to Ipsos Public Affairs, quality-of-life issues were ranked as primary concerns by roughly a quarter of middle class voters in 2005, while economic issues were the primary concern of close to 50 percent. But by 2010 middle-class concern with economic issues had fallen to 36 percent, behind quality-of-life issues, which rose to 38 percent. These demands will shape the types of candidates that will be successful in future elections and act as powerful incentives for elected officials.

Two conclusions emerge from this appraisal. First, Rousseff is unlikely to back down. While Rousseff may be forced to make strategic concessions to congressional allies on occasion (don’t expect the president to quickly conduct similar overhauls in other ministries), the focus on better governance is here to stay.

Second, Rousseff’s relations with congress will likely become more difficult. Voter demands may change quickly, but the intricacies of Brazil’s political system (specifically coalition management in a multiparty presidential system) will evolve more slowly. For example, Rousseff’s decision to strip the Brazilian Democratic Movement Party (PMDB) of key ministries early in her term contributed to her difficulties during the scandal implicating her chief of staff. If her public-approval ratings decline, the PMDB and the PR may be inclined to show their displeasure with open dissent — likely with support of populist spending measures. And in a context in which the government is struggling to keep inflation at bay, more spending by congress is that last thing Rousseff needs.

Christopher Garman is Eurasia Group’s Latin America practice head.