May 30, 2017

Political Situation in Brazil is very Unsettled

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The political situation in Brazil is very uncertain to say the least. The current thinking is that President Temer will either resign or be removed from office. The Brazilian constitution has a provision allowing for the National Congress to elect a new president within 30 days if there is a vacancy in the presidency during the last two years of a presidential term, this is what is called an indirect election. The Electoral College in the United States is also an indirect election.

The Brazilian population continues to reject the idea of an indirect election for president and they are demanding direct elections for a new president. Large scale demonstrations continue all across the country and the demonstrators are demanding that it is unacceptable for another president chosen by the politicians in Brasilia. They demand a new direct election for president. To say the situation is uncertain would be a huge understatement. No one knows what will happen.

If the Brazilian Congress ends up choosing a new president, there is already a list of potential candidates for the presidency. The list of potential presidents includes Supreme Court justices, current Ministers, and current Senators. The current presidential term will expire in October of 2018. The process of choosing a new president could move forward rather quickly if President Temer decides to resign. If he refuses to resign, an impeachment process would have to wind its way through the Brazilian Congress. If that is the path chosen, it would be the second impeachment in two years.

The bottom line is that this is an evolving situation and nobody knows how it will play out.