Brazil in turmoil in countdown to Rio Olympics: How a booming country faltered
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Brazil in turmoil in countdown to Rio Olympics: How a booming country faltered

The gaze of the world will focus on Brazil in less than three months, when the Olympic Games kicks off in the summer playground of Rio de Janeiro.

But the glittering opening ceremony broadcast into lounge rooms around the world will mask a country that is, in short, in turmoil.

Brazil's President has just been suspended and is facing an impeachment trial. The economy, which hummed along during the global commodities boom, is facing its worst crisis since the 1930s. The Zika virus epidemic is raging. The biggest corruption scandal in the country's history has ensnared businessmen and government officials accused of stealing billions from state coffers.

Boris Fausto, a Brazilian historian, summed up his country's grim mood recently.

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The city of Rio de Janeiro will host the Olympic Games, which kick off on August 5.

The city of Rio de Janeiro will host the Olympic Games, which kick off on August 5.

Photo: Getty Images

"Plainly said, this is the worst crisis in our history, with its combination of economic calamity, discredited politics and the violation of the lowest ethical standards," he said.

How did it come to this?

An end to an economic boom

Australians routinely berate themselves for squandering the mining boom. In resource-rich Brazil, the plunge in commodities prices looks as if it will push the country into a prolonged political and economic crisis.

Latin America's largest country, and the world's fifth-most populous, had experienced a rare stretch of stability over the past two decades as it strengthened its economy, lifting millions of Brazilians out of poverty.

The riches flowing from Brazil's mines, oil fields and farms fuelled a consumer spending binge, but "patched over the structural problems that made Brazil a creaky, onerous place to do business", The Washington Post reports.

"A privatisation plan to build much-needed roads and railways faltered. Productivity remained low because the workforce was badly trained and poorly educated ... And all the while, the old way of making deals - lubricating them with graft - went unchanged.

"Big construction and energy companies grew fat on state contracts and government loans, and the opportunities for illegal enrichment were infinite. Slush money poured into political campaigns."

With the boom now over, Brazil is suffering its worst recession since the 1930s. The economy is expected to shrink by a total of 7.5 per cent in 2015 and 2016; the unemployment and inflation rates are both about 10 per cent; and the budget deficit is more than a 10th of GDP.

President suspended

I advise everyone with plans to visit Brazil for the Olympics in Rio - to stay home. You'll be putting your life at risk here.

Rivaldo, Brazil soccer legend

In extraordinary scenes this week, Brazil's first female President, Dilma Rousseff, was suspended and now faces an impeachment trial that could drag on for six months.

The decision to strip the 68-year-old of her presidential duties came after a marathon 20-hour debate in the Senate that one politician described as the "saddest day for Brazil's young democracy".

Dilma Rousseff.

Dilma Rousseff.

Photo: Getty Images

Ms Rousseff is accused of borrowing from state banks to conceal a looming deficit. Despite the charges against her, Ms Rousseff is rare among top politicians in Brazil in that she has not faced accusations of illegally enriching herself.

In a nationally televised address after she was suspended, Ms Rousseff condemned the move as a "coup" and a "farce".

"I may have committed errors but I never committed crimes," Ms Rousseff said, at one point choking up during her 14-minute address.

"It's the most brutal of things that can happen to a human being to be condemned for a crime you didn't commit. There is no more devastating injustice."

Who will replace her?

Vice-President Michel Temer, who himself has been convicted of violating campaign finance limits and is facing corruption probes, has taken over as acting President and will be under tremendous pressure to stem Brazil's economic crisis.

A coalition partner of Ms Rousseff, the 75-year-old is the leader of Brazil's largest, most influential political party, the Brazilian Democratic Movement Party (PMDB).

Michel Temer.

Michel Temer.

Photo: Getty Images

Earlier this month, he paid a fine of about $US23,000 ($31,500) for violating campaign finance limits in 2014. His office said he had exceeded the limit for campaign donations because of a "calculation error".

A lawyer and amateur poet who was elected to Congress in 1987, Mr Temer has been preparing for months to assume the top job.

He is married to a former beauty queen, Marcela, who is 42 years his junior, has his first name tattooed on the back of her neck and was featured on the cover of mass magazine Veja under the much ridiculed headline, "Beautiful, demurred and housewife".

Hours after being named acting President, Mr Temer named an all-male cabinet, including a politician with no medical background as the new health minister. The portfolio will be taken by Ricardo Barros, a civil engineer by training.

Several high-ranking members of Mr Temer's party are ensnared in a massive corruption scandal - explained below.

Corruption remains rife

Brazil's state-run oil company, Petroleo Brasileiro SA, or Petrobras, is engulfed in the biggest corruption scandal in the country's history.

What started out in 2014 as a money-laundering case - hence the investigation's name Operation Carwash - has expanded into a series of revelations about a massive web of kickback schemes centred on the company, the largest in Brazil and employer of more than 80,000.

Petrobras' contractors, including some of Brazil's largest construction companies, bribed Petrobras executives in return for contracts. These contracts were said to have been inflated in order for kickbacks to go to politicians and political parties. A number of construction executives are serving jail terms, while others are still co-operating with investigations, handing over more names in return for more lenient sentences.

The Washington Post reports that, since Brazil's transition from military rule to democracy in 1985, the country has been dominated by politicians who abused their positions to corrupt ends. About 60 per cent of Brazil's members of Congress - including the recently-removed speaker of the lower house and many of the politicians who called for Ms Rousseff's impeachment - were facing charges for bribery and other illegal behaviour themselves.

The Zika virus strikes

The Zika virus was first identified in Brazil in May 2015, and since then, its spread has been declared a health emergency by the World Health Organisation. An estimated 1.5 million people were infected with the virus in Brazil last year.

The mosquito-borne virus has been proven to cause a severe birth defect that results in babies born with abnormally small heads and underdeveloped brains. The number of suspected cases in Rio is the highest of any state in the country.

A child with microcephaly in Brazil.

A child with microcephaly in Brazil.

Photo: AP

Athletes and health specialists have questioned the risks involved in allowing the 2016 Olympic Games to go ahead in Rio, with hundreds of thousands of spectators travelling to the city

Writing in the Harvard Public Health Review, Dr Amir Attaran said the Olympics could speed up the spread of the virus, and suggested they could be hosted by another city in Brazil where the illness was less of a threat.

Brazilian authorities say the onset of winter will help contain the spread of the virus during the Olympics.

Will the Olympics save Brazil?

Rio is facing the problems that usually confront host cities, including delayed stadium construction and transportation concerns.

As the value of the Brazilian currency, the real, declined drastically over the past year, some expressed doubt that some major projects would materialise. But the permanent venues for competitions in Rio are mostly complete, the only outstanding ones are those for tennis and track cycling.

Rio's Guanabara Bay, the site of the sailing competition, has been ravaged with high levels of pollution, bacteria and viruses that were first reported by The Associated Press last July. Some athletes developed illnesses during water-based test events in 2015, and raw sewage continues to flow into the bay every day.

Despite the problems, Ricardo Leyser, Brazil's sports minister, expressed confidence that all competition venues would be completed in time for the Olympics.

He also said facilities were safe and well constructed, despite the collapse of a recently built elevated bike path that killed at least two people.

But having hosted the 2014 Soccer World Cup mid-crisis, Brazilian observers say, the Olympic party is likely to go off as planned.

An "ugly" wave of crime

One of Brazil's most successful soccer stars, Rivaldo, this week pleaded with tourists to stay away from the Olympics due to the threat of violence.

He posted a warning on his Instagram account that alluded to the case of a 17-year-old woman killed in a shootout at the weekend.

"Things are getting uglier here every day," Rivaldo wrote. "I advise everyone with plans to visit Brazil for the Olympics in Rio - to stay home. You'll be putting your life at risk here. This is without even speaking about the state of public hospitals and all the Brazilian political mess. Only God can change the situation in our Brazil."

In a recent statement, Amnesty International said at least 11 people were killed in police shootings in Rio's impoverished favelas in April. It said at least 307 people were killed by police last year, accounting for 20 per cent of the homicides in the city.

Megan Levy is a breaking news reporter for The Sydney Morning Herald, after previous stints at The Age in Melbourne and London's The Daily Telegraph. Email or tweet Megan with your news tips.