Without LULA? On the challenge to Brazil 🇧🇷 politics

With a Porto Alegre court upholding Brazilian President Luiz Inácio Lula da Silva’s conviction in a corruption case, his chances of being allowed to contest the presidential elections in October have narrowed. Almost instantly, and perhaps in a sign of defiance, the left-leaning Workers’ Party (PT) announced its decision to field Mr. Lula. The developments echo divisions of the anti-corruption crusades that had engulfed Brazil’s business and political elites and millions of citizens owing allegiance to the architects of the generous welfare and inclusive growth policies of the previous decade.

At the root of the ongoing crisis are the so-called Lava Jato, or Operation Car Wash, investigations into alleged kickbacks and political patronage involving the state-owned oil giant. The plea-bargaining provisions in Brazil’s anti-corruption law, which reduce jail terms for defendants in return for testimonies to prosecutors, set off a witch-hunt among the political classes anxious for their own survival. Mr. Lula himself was sentenced to nine years in prison in the original July conviction, for corruption and money laundering; that term was increased by two more years last week.

More sensational was the 2016 Senate vote to impeach a sitting president, Dilma Rousseff, Mr. Lula’s anointed successor, for budgetary manoeuvres to conceal a yawning fiscal deficit. To critics of that decision, the move to remove Ms. Rousseff, who had displayed no motive of personal enrichment, amounted to a coup. The current incumbent, Michel Temer, whose centre-right opposition Brazilian Democratic Movement party has been a junior partner in previous PT governments, has so far survived Congressional votes for the commencement of a trial for approving bribes. The Supreme Court’s move to set aside a recent presidential decree, which lowers prison terms for certain offences, perhaps reflects the kind of proactive judicial scrutiny that executive actions are subject to in the prevailing atmosphere.

While the courts are clearly focused on bringing in transparency in governance structures, there is concern that Brazil’s independent judiciary, equipped to fight graft in high places, could set off unintended consequences in terms of eroding political stability. That could prove costly for Latin America’s largest economy, as it grapples with the current economic and social upheaval following the collapse of commodity prices and pension and labour market reforms.

Financial markets were expectedly buoyed by the decision to uphold Mr. Lula’s conviction last week. But his potential removal from seeking re-election has also raised the risk that the centrist platform could be weakened. A vacuum at the political middle ground would be an invitation to populist outsiders eager to capitalise on the public disenchantment with soaring unemployment, a steep fall in real incomes and widening inequalities. With a vast number of leaders occupying elected office facing judicial investigations, the public mood in Brazil is rightly on holding them to account. The challenge for Brazil’s mainstream politics is to demonstrate the capacity for renewal.