Rio Favela Impeaches Rousseff as Poor Fed Up With Inflation

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Brazil’s Congress hasn’t moved to impeach embattled President Dilma Rousseff, but in one shantytown named after her, she has already been ousted.

As the fastest inflation in more than a decade hits the poor harder than the rich, a leader of the Comunidade Dilma Rousseff last month tore down the placard honoring the president at the entrance to the favela, tucked beside a highway in Rio de Janeiro.

“We put up a sign after Dilma was elected, thinking it was going to be worthwhile, but nothing at all happened,” said Marilene Silva Souza, 40, who sells cookies and bottled water on the road. “We’re eating scraps. If you want to eat a little better, you have to pay an absurd amount.”

Since Rousseff’s second term started in January, her government has boosted government-regulated prices, which along with rising food costs have helped propel inflation to almost double the official target. That pinches the poor, who form the base of Rousseff’s Workers’ Party and have turned against her in greater numbers than those who are better-off.

“Inflation is by nature a regressive tax, and in the basket of goods and services the poor consume, prices have risen faster,” Alberto Ramos, chief Latin America economist at Goldman Sachs Group Inc., said by phone. “So they’re being hit twice.”

The presidential press office had no comment on the impact of inflation on the government’s popularity among lower-income Brazilians.

Benchmark Index

Brazil’s inflation as measured by the benchmark IPCA index accelerated to 8.89 percent in the 12 months through June, according to data released Wednesday by the national statistics institute. The IPCA measures price increases for families earning as much as 40 minimum salaries, currently 31,520 reais (about $9,800) monthly.

Since March, prices of goods that have a bigger weight for families with lower income, such as onions, beef and electricity, are outpacing the headline measure. The INPC index, which measures inflation for families earning up to five minimum salaries, rose 9.31 percent in June, and in Rio it gained 10.72 percent.

In the Comunidade Dilma Rousseff, the ground is littered with burnt trash and brick fragments. The placard in homage to Rousseff has lain discarded since June 26, the day that magazine Veja published a report about alleged illegal donations to the president’s 2014 re-election campaign, renewing calls for her impeachment.

The loss of support among Brazil’s downtrodden casts a shadow on the political outlook for Rousseff and her ruling party. Former president Luiz Inacio Lula da Silva has said that bringing millions of poor Brazilians into the middle class was one of his government’s greatest achievements.

’With Anger’

“I took the sign down with anger, with sadness, with disgust, with annoyance,” Pastor Vagner Gonzaga, the community’s leader, said Monday in an interview inside his church. “I said, ‘This is where it ends.’ There’s no more residents’ association. It’s done. Dilma Rousseff is done.”

Gonzaga christened the favela, which comprises 30 to 50 families, at the outset of Rousseff’s first term in 2011 to call her attention to the lack of electricity and sewage networks.

Those never materialized. Now Miranildes Coelho, a widowed mother of three, said every day is worse than the last. The 788-real monthly pension from her late husband is never enough to properly feed and clothe her kids, she said. The eldest two understand when she can’t afford milk, unlike her 4-year-old daughter.

“Beef, rice, beans. Clothes, my God! Milk, Lord in heaven! Even eggs are expensive,” Coelho, 31, said. “We have to hold on with that little salary.”

Power Rates

Electricity costs as measured by the INPC index have risen

41.5 percent in the first six months of the year. Urban bus fares have gone up 12.5 percent, beans as much as 24.5 percent, and eggs 13.3 percent, while the price of onions and tomatoes have jumped 151 percent and 59.1 percent, respectively.

Approval of Rousseff’s government since December has fallen 31 percentage points to 10 percent among those earning the equivalent of five minimum salaries or less, according to polling company Ibope. Her government’s approval rating is 9 percent, according to an Ibope poll conducted June 18-21 that had a margin of error of plus or minus two percentage points. That’s worse than the government of Fernando Collor, who resigned in 1992 amid impeachment proceedings.

The Workers’ Party “will probably suffer a large negative result in the municipal elections next year,” David Fleischer, an emeritus professor of political science at the University of Brasilia, said by phone. “They’re in very bad shape.”

For more, read this QuickTake: Brazil's Highs and Lows

If it were up to Pastor Gonzaga, he would impeach Rousseff “urgently.”

“I’m now anti-Dilma, anti-Lula,” Gonzaga said, referring to Rousseff’s predecessor, whose government enjoyed an approval rating of 80 percent at the end of his second term. “I believed this government was for the poor.”