Brazil’s Upcoming Elections: A Jump Into the Unknown


Henrique Bezerra - Government Relations Director & Deputy Country Manager, Brazil

As far as national elections are concerned, Brazil’s young democracy has been all but unpredictable: 7 out of 8 presidential elections went either to the center-right Party of Brazilian Social Democracy (PSDB) or to the center-left Workers Party (PT). Not even the 2013 mass street protests were able to break this trend, with Dilma Rousseff’s (PT) tight re-election the following year, only 3.3% ahead of her PSDB opponent Aécio Neves.

Now, however, 2014 seems like a world away. Since then, Brazil has undergone its worst economic recession on record; a tumultuous and highly disputed impeachment replaced Rousseff by Vice-President and now opponent  Michel Temer (Brazilian Democratic Movement - MDB); the complete meltdown of Brazil’s multiparty coalition system (by multi, we mean the almost 30 political parties with Congressional seats); the imprisonment of Brazil’s most popular politician, Lula (PT), on charges of corruption, along with other political bigwigs from parties of all different stripes and, last but not least, a sharp rise in urban violence and an increasing nostalgia for Brazil’s “great again” military rule.

So, in a world that has seen the rise of Brexit, Trump, and now Lopez Obrador, one might wonder: will Brazilians continue to be complacent with the status quo, or will they decide to follow suit in the global trend of bucking mainstream politics in favor of a populist wave?

 

Uncertainty reigns

Less than three months ahead of the elections, all cards are on the table and no one can predict with much accuracy what will happen. One of the latest election polls, led by XP Investimentos/Ipespe between June 25-27, shows that in a voting scenario that includes Lula, the convicted former President would still get 29% of the vote. Far-right candidate Jair Bolsonaro (PSL) polls second with 19%, blank and undecided ballots follow closely with 18%, while none of the other candidates captured over 10% of voters’ intentions.

In the likely scenario where Lula’s candidacy is blocked by the Electoral Court due to the Clean Records Act, XP’s poll shows that 11% of the electorate would vote for Fernando Haddad (PT), if supported by Lula, none/blank/null ballots plus undecided would jump to 33%, while Bolsonaro would gather 20% of voters. In that case, Bolsonaro and Haddad would be followed by Marina Silva (Rede – 10%), Ciro Gomes (PDT – 8%) and Geraldo Alckmin (PSDB – 7%), with minor candidates accounting for 11% of ballots.

In light of such a fragmented and blurry scenario, it is important to understand what cards are on the table in terms of economic agendas. The three main (arguably) center candidates are, from right to left, Geraldo Alckmin (PSDB), Marina Silva (Rede) and Ciro Gomes (PDT). Further to the left is the Workers’ Party (PT), whose moderate tone has become more confrontational since Rousseff’s impeachment and Lula’s imprisonment. Increasingly aligned in tune with the mood of its wide grassroots movement, PT will most likely put forward Haddad if unable to select Lula as a candidate. At the other extreme, meanwhile, is Bolsonaro, Brazil’s alt-right candidate whose main card is tribal politics and whose vague economic agenda is only now taking shape.

 

A brief guide to the leading candidates

Alckmin’s proposals are centered around general market liberalization, including trade agreements with the European Union and other important economies, cutting red tape, slashing sectorial subsidies and advancing a profound public pension reform towards an individually capitalized system. He is the market’s favorite, but his candidacy is burdened by his lack of charisma and difficulties in forging a wider alliance with other main center-right parties, notably MDB and DEM, essential to guarantee more public funds and TV time for the campaign. His party is also embroiled in many corruption charges that are encroaching on his tenure as São Paulo State’s Governor (a position he has served for the past eight years, as well as between 2001 through 2006).

Marina Silva (Rede) is running for President for the third time in a row. Although she is a strong candidate, coming in second or third place depending on the scenario, she has yet to successfully forge any national party alliances. This is particularly troublesome to her candidacy due to the lack of congressional representation of her recently founded party. Marina positions herself as a defender of fiscal responsibility and market friendly policies, but also favors policies that aim to combat social inequalities and protect the environment. Previously a member of PT for more than 25 years, she was appointed as the Minister of Environment during Lula’s presidency. She tries to position herself as a conciliatory figure, having a remarkable biography of personal triumph over extreme poverty (very similar to Lula’s), while simultaneously aligning herself with important banks, industrialists and environmentally sensitive urbanites.

Ciro Gomes is an experienced politician who gained national recognition for his tenure as Minister of Finance during the first months of the “Real Plan” in the early ‘90s, a position he assumed when Fernando Henrique Cardoso left the post to run in the presidential elections of 1994. Since then, Gomes has become a national political figure, transitioning from the center-right PSDB to the center-left PDT, a party historically aligned with the policies supported by PT. He is positioning himself as the only viable center-left candidate, hoping to capitalize on the vacuum in leadership that PT has left by continuing to support Lula. His economic agenda favors increasing taxes on the very rich instead of cutting social programs. He has also promised to increase investments in infrastructure and enact industrial policies that protect the local industry, aligning himself with the interests of the “national industry” movement and against the interest of the “international financial system.” That said, it is important to note that while his rhetoric plays to the left, he is actively searching for alliances not only with the left, but also with the center-right, such as the DEM party.

This leaves us with the two most polarizing forces - PT, led by Lula or Haddad, and PSL, led by Bolsonaro. Lula will most likely be banned from the election, and will instead endorse Fernando Haddad, the ex-mayor of São Paulo. Regardless of who represents PT on the ballot, however, the party’s base is keen on reverting most market friendly policies implemented by the current government, such as the labor reform and the expenditure ceiling for the next twenty years. The party is now much more vocal on implementing policies that place higher taxes on the rich, impose greater limits to the judiciary, and promote social programs that benefit the poor – and seems less concerned about addressing issues such as fiscal responsibility and inflation. Talks of a “leftist front” seem to be on hold, and are likely to proceed only if Gomes or Haddad make it to the second round.

Bolsonaro’s dominance in election polls is due more to the appeal of his tribal politics than to his proposed economic agenda. He appeals both to the disenchanted, tired of mainstream politics, and to the socially conservative, who until recently had no major candidate who openly opposed the advancement of minorities’ rights. His record as federal representative for seven terms, after leaving the army, is one of economic nationalism and statist intervention. However, as he gains prominence as a presidential favorite, he has chosen liberal figures to lead his economic team and has positioned himself in favor of further liberalization of the labor market while maintaining his nationalism on issues such as foreign trade and foreign investment in “strategic” sectors.

 

The clock has started ticking

From July 5th, candidates may launch their intraparty campaign (with no permission for the use of radio, TV or billboards), and parties and coalitions must choose their candidates for president, governor, senator, federal and state representatives from July 20 to August 5. The deadline for registering candidates with the Electoral Justice is on August 15, and free electoral coverage on radio and television will be promoted between August 21 and October 4th. Debates and rallies will abide by the same term. Paid electoral advertising on press and the internet, meanwhile, may happen from August 16 until October 2nd.

The first round of elections will take place on October 7th, when Brazilians will go to the polls to choose their state representatives, governors, federal representatives, senators and the next president of the Republic. If any governors and/or presidential candidates fail to gain more than 50% of the votes, the two highest polling candidates will head to a second round run-off election, which would be held on October 28th.

The official election calendar has already started to tick, and with Brazil now out of the World Cup, all eyes will turn to the formal candidacies and coalitions. Hopefully this will give way to a clearer outlook on Brazil’s future political landscape, and whether these elections will be a chance for the young democracy to grow out of its prolonged adolescence, or if Latin America’s biggest country will take yet another big jump into the unknown.


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