Could Brazil’s Economy Recover In 2017?

Things may be looking up for the South American giant, provided it can weather the unpredictable Dilma Rousseff impeachment process.

On its way up?
On its way up?
Ricardo Arriazu

BUENOS AIRES â€" Brazil's recession is following an almost identical path to the Argentine crisis 1998-2002, perhaps not surprisingly, as very similar factors were at play in both cases. And just as our economy began to recover in mid-2002, recent indicators suggest that Brazil may also be turning the corner. Could its economy rebound in 2017?

In 1997, before the crisis set in, Argentina's GDP was growing at a rate of 8.1%, while inflation stood at just 0.3%. The country's fiscal deficit (excess spending) was 1.7% of GDP, and public debt was at 29.6% of GDP. The weak points were a negative current account balance of payments (3.5% of GDP), a 16.8% jobless rate (though falling) and complaints about Argentina's competitiveness abroad.

A demonstrator in Sao Paulo â€" Photo: Alexandre Moreira via Zuma

Within a relatively short period of time, however, everything changed, due in large part to decreases in the price of Argentine export products (triggered by a double-digit drop in the currency exchange terms) and doubts about the strength of the government. Those factors put a damper on capital flows and triggered a vicious circle.

Between 1999 and 2001, Argentina's GDP fell by 9.1%, consumption declined, prices fell by more than 4%, the fiscal deficit rose (as earnings fell against greater spending and interest payments), public debt increased by more than 15% of GDP, jobs were shed and cash reserves fell. The only "positive" here was a decline in imports, in reality a direct consequence of the recession.

The situation led to the well-known crisis of 2001, with its devaluation, asymmetric "pesification" (forced conversion of assets and debt into Argentine pesos), debt default and restructuring, and major political turmoil: at one point the country famously went through five different presidents in a single week. Argentina entered then into the "mother of recessions," with massive job losses that also came, paradoxically, with a big external balance surplus.

Things began to change in 2002 with improvements to the currency exchange terms and a reduced outlflow of capital, which showed the importance of these variables in the Argentine economy.

From boom to bust

In Brazil, the economy was roaring as recently as 2010 and continued to perform fairly well until 2013, with growth rates above 3%, price increases and unemployment below 6%. The fiscal and foreign trade deficits were below 3%. Like Argentina, problems began with a deterioration in exchange terms, weaker government and a reversal of the capital account balance, all made worse by increased public spending.

The falling price of Brazilian exports meant a more than 30% decline in exchange terms, which reduced the purchasing power of everyday citizens, affected the country's foreign accounts and reversed capital flows. These in turn led production and job creation to tumble and curbed fiscal revenues, which provoked more capital outflow and hampered governance.

Rio's Copacabana beach â€" Photo: Rodrigo Soldon

Brazilian GDP stagnated in 2014 and declined by almost 8% between 2015 and the first half of 2016. The Brazilian real lost value and was trading at over four against the U.S. dollar. Inflation, on the other hand, rose, as did unemployment, affecting nearly 10% of the workforce. The fiscal deficit, in the meantime, reached almost 9% of GDP (as economic activity declines, state revenues fall while subsidies and interest payments rise).

The resulting anger paved the way for the ongoing impeachment process against President Dilma Rousseff, who was suspended last month and faces the possibility of permanent removal.

Light at the end of the tunnel?

Since April, however, the evolution of the Brazilian economy has shown some positive signals. In the first quarter of this year, GDP suffered the biggest fall year-on-year (5.8%) but compared to the fourth quarter of 2015, this was the lowest decline in two years. Also, the balance of payments current account was in the black in April, for the first time since 2009, even though commodities prices had only just begun to recover.

In the same month, the capital account also improved notably. These tendencies strengthened the real, which rose 15% in value. The trade balance showed a surplus of over $6.4 billion, the biggest since 1989, and should produce an even bigger current account surplus than in April. Finally, fiscal accounts began to improve.

Both theory and Argentina's experience suggest that if these trends continue, the Brazilian economy should start to improve in the second half of 2016 â€" assuming the precarious political situation does not worsen.

That said, the impeachment process is long and its results are presently uncertain. For now, though, the evolution of the capital account shows that investors have reacted positively to the political changes, even if on many occasions in history, political reactions have been quite the opposite of investors' reactions.

A Brazilian recovery would benefit both the Brazilians and the Argentines. Brazil's economy has a significant impact on ours (especially on industry and tourism). Our foreign trade figures for the first term in 2016 show a marked deficit growth vis-Ã -vis Brazil, as we export less to them and import more. A boost in the Brazilian economy and the price of the real could change that.

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Where Lockdowns For LGBTQ Meant Moving Back In With Homophobic Relatives

The confinement experience could turn brutal for those forced to live with relatives who would not tolerate a member of the family living their sexual orientation openly as a young adult. Here are stories from urban and rural India.

At a Rainbow pride walk in Kolkata, India

Sreemanti Sengupta

Abhijith had been working as a radio jockey in the southern Indian city of Thiruvananthapuram when the COVID-19 pandemic hit in March, 2020. When the government imposed a nationwide lockdown, Abhijith returned to the rural Pathanamthitta district , where his parents live with an extended family, including uncles, cousins and grandparents.

Eighteen months later, he recalled that the experience was "unbearable" because he had to live with homophobic relatives. "Apart from the frequent reference to my sexual 'abnormality', they took me to a guruji to 'cure' me," Abhijith recalled. "He gave me something to eat, which made me throw up. The guru assured me that I was throwing up whatever 'demon' was possessing me and 'making' me gay."

Early in 2021, Abhijith travelled back to Thiruvananthapuram, where he found support from the members of the queer collective.

Inspired by their work, he also decided to work towards uplifting the queer community. "I wish no one else goes through the mental trauma I have endured," said Abhijit.

Abhijith's story of mental distress arising from family abuse turns out to be all too common among members of India's LGBTQ+ community, many of whom were trapped in their homes and removed from peer support groups during the pandemic.

Oppressive home situations

As India continues to reel from a pandemic that has claimed more lives (235,524) in three months of the second wave (April-June 2021) than in the one year before that (162,960 deaths in March 2020-March 2021), the LGBTQ community has faced myriad problems. Sexual minorities have historically suffered from mainstream prejudice and the pandemic has aggravated socio-economic inequalities, instigated family and institutionalized abuse, apart from limiting access to essential care. This has resulted in acute mental distress which has overwhelmed queer support infrastructure across the country.

Speaking to queer collective representatives across India, I learned that the heightened levels of distress in the community was due to longstanding factors that were triggered under lockdown conditions. Family members who are intolerant of marginalized sexual identities, often tagging their orientation as a "disorder" or "just a phase", have always featured among the main perpetrators of subtle and overt forms of violence towards queer, trans and homosexual people.

Calls from lesbians and trans men to prevent forced marriages during lockdowns.

Sappho For Equality, a Kolkata-based feminist organization that works for the rights of sexually marginalized women and trans men, recorded a similar trend. Early in the first wave, the organization realized that the existing helpline number was getting overwhelmed with distress calls. It added a second helpline number. The comparative figures indicate a 13-fold jump in numbers: from 290 calls in April 2019-March 20 to 3,940 calls in April 2020-May 2021.

"Most of the calls we have been getting from lesbians and trans men are urgent appeals to prevent forced marriages during lockdowns," said Shreosi, a Sappho member and peer support provider. "If they happen to resist, they are either evicted or forced to flee home. But where to house them? There aren't so many shelters, and ours is at full capacity."

Shreosi says that the nature of distress calls has also changed. "Earlier people would call in for long-term help, such as professional mental health support. But during the pandemic, it has changed to immediate requests to rescue from oppressive home situations. Often, they will speak in whispers so that the parents can't hear."

Lack of spaces

Like many of his fellow queer community members, life for Sumit P., a 30-year-old gay man from Mumbai, has taken a turn for the worse. The lockdown has led to the loss of safe spaces and prolonged residence at home.

"It has been a really difficult time since the beginning of the lockdown. I am suffering from a lot of mental stress since I cannot freely express myself at home. Even while making a call, I have to check my surroundings to see if anybody is there. If I try to go out, my family demands an explanation. I feel suffocated," he said.

The pandemic has forced some queer people to come out

Sumit is also dealing with a risk that has hit the community harder than others – unemployment and income shortage. He's opened a cafe with two other queer friends, which is now running into losses. For others, pandemic-induced job losses have forced queer persons from all over the country to return to their home states and move in with their families who've turned abusive during this long period of confinement.

Lockdowns force coming out

According to Kolkata-based physician, filmmaker and gay rights activist Tirthankar Guha Thakurata, the pandemic has forced some queer people to come out, succumbing to rising discomfort and pressure exerted by homophobic families.

"In most cases, family relations sour when a person reveals their identity. But many do not flee home. They find a breathing space or 'space out' in their workspaces. In the absence of these spaces, mental problems rose significantly," he said.

Not being able to express themselves freely in front of parents who are hostile, intolerant and often address transgender persons by their deadname or misgender them has created situations of severe distress, suicidal thoughts and self-harm.

Psychiatrist and queer feminist activist Ranjita Biswas (she/they) cites an incident. A gender-nonconforming person died under suspicious circumstances just days after leaving their peer group and going home to their birth parents. The final rites were performed with them dressed in bangles and a saree.

"When a member of our community asked their mother why she chose a saree for someone who had worn androgynous clothes all their life, she plainly said it was natural because after all, the deceased 'was her daughter,'" Biswas recalls.

The Indian queer mental health support infrastructure, already compromised with historical prejudice, is now struggling

David Talukdar/ZUMA

"Correctional" therapy

In India, queer people's access to professional mental healthcare has been "very limited," according to community members such as Ankan Biswas, India's first transgender lawyer who has been working with the Human Rights Law Network in West Bengal.

"A large majority of the psychiatrists still consider homosexuality as a disorder and practice 'correctional therapy'. It's only around the big cities that some queer-friendly psychiatrists can be found," Biswas said. "The pandemic has further widened the inequalities in access to mental health support for India's LGBTQ community."

Biswas is spending anxious days fielding an overwhelming amount of calls and rescue requests from queer members trapped in their homes, undergoing mental, verbal and even physical torture. "We don't have the space, I just tell them to wait and bear it a little longer," he said.

Medical care is dismal

Anuradha Krishnan's story, though not involving birth family, outlines how the lack of physical support spaces have affected India's queer population. Abandoned by her birth family when she came out to them as a trans woman in 2017, Anuradha Krishnan (she/they), founder of Queerythm in Kerala who is studying dentistry, had to move into an accommodation with four other persons.

Isolation triggered my depression

"I am used to talking and hanging around with friends. Isolation triggered my depression and I had to seek psychiatric help." Living in cramped quarters did not help with quarantine requirements and all of them tested positive during the first wave.

What is deeply worrying is that the Indian queer mental health support infrastructure, already compromised with historical prejudice, is now struggling, placing more and more pressure on queer collectives and peer support groups whose resources are wearing thin.

During the 10 months of the first wave of the pandemic in India in 2020, Y'all, a queer collective based in Manipur, received about 1,000 distress calls on their helpline number from LGBTQ+ individuals. In May 2021 alone, they received 450 such calls (including texts and WhatsApp messages) indicating a telling escalation in the number of queer people seeking help during the second wave.

As India's queer-friendly mental health support infrastructure continues to be tested, Y'all founder, Sadam Hanjabam, a gay man, says, "Honestly, we are struggling to handle such a large number of calls, it is so overwhelming. We are also dealing with our own anxieties. We are burning out."

Sreemanti Sengupta is a freelance writer, poet, and media studies lecturer based in Kolkata.

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