PHILADELPHIA, October 8 (RIA Novosti) – After a heated run-off presidential election that the Guardian called the closest in generations, Brazil’s President Dilma Rousseff claimed victory with a mere 51.6% of the vote. Aecio Neves’ 48.4% reflected his performance in pre-election polls that had been conducted earlier in October, which placed him within the statistical margin of error of the incumbent. A few polls had even showed him ahead. An election that barely a year ago had seemed destined to be a rote affair was transformed into an international media sensation, with the nation’s currency rallying at any hint of a possible Neves victory.
Despite the narrow win, many were unfazed by the pre-election polls. Why? Well, her party’s support is disproportionately drawn from social groups (the socially marginalized, the poor, and the uneducated) that are less likely to be included in even the best-run polls. Despite its impressive economic run in recent years, Brazil remains a society that is sharply divided by wealth and class. It’s hard to deliver the most basic kinds of government services to the country’s sprawling favelas, and it’s much harder to conduct the sophisticated social science research that underlies reliable polling.
If you don’t believe me, perhaps you’ll believe Brazil’s financial markets, which have very clearly favored Neves’ pro-business views and which rose in lockstep with the perception that he could win. Now that Rousseff has secured the presidency, Brazilian markets are “set for a beating”, according to CNBC.
The views expressed in this article are solely those of the author and do not reflect the official position of Sputnik.
Nonetheless, Neves’ candidacy is worth reflecting upon. Back in 2010, when Brazil’s former president Luiz Inácio Lula da Silva, affectionately known as “Lula”, publicly endorsed Rousseff, many serious analysts predicted that a political dynasty was in the making. It seemed as if the center left was poised to rule Brazil much like the Liberal Democratic Party had ruled Japan: abiding by all the democratic norms, yes, but from a position of virtually unchallenged electoral supremacy. With an economy in rapid growth and poll ratings in the stratosphere, it seemed highly unlikely that the Brazilian right would be able to mount an effective challenge.
It seems as if it was a lifetime ago now, but Lula had become impossibly popular; he was a rare Brazilian political figure whose appeal transcended the country’s deep racial, social, political, and economic divides. It is true that Rousseff never had Lula’s natural charisma or obvious talent, but she did inherit a growing economy, a balanced, budget, and a small mountain of political capital. Successful careers have been launched with a lot less.
How could Rousseff manage to squander such enormous advantages? How could she have moved from a position of overwhelming popularity to fighting for her career in a presidential run-off? Most media coverage has focused on Rousseff and her party’s missteps, particularly the recent allegations of mismanagement at Petrobras, Brazil’s national oil champion and one of the world’s largest energy companies.
The allegations of corruption matter, but I think they are putting the cart before the house. The real story in Brazil has been the rapid slowdown of the economy. Brazil rode the coattails of the early and mid-2000’s commodities boom better than almost any other country. In a story that bears some striking similarities to Russia’s experience, under Lula Brazil carried out a bevy of pro-market reforms, and pursued a prudent macroeconomic policy. Along with a conveniently-timed explosion in Chinese demand for Brazil’s natural resources (primarily soy and iron ore) the result of these reforms was the country’s best-ever run of economic growth. For the first time in Brazil’s history, the economic gains from increased prosperity were shared by people from all walks of life. Almost overnight, the lower classes became voracious consumers, purchasing televisions, washing machines, and other durables in quantities that would have seemed fantastical just a few years before.
This process, though, was heavily dependent on high and growing commodity prices. In a story that also bears more than a passing similarity to Russia’s recent experience, the boom in commodity exports resulted in Brazil’s currency appreciating, and its manufacturers became less and less cost-competitive. Over the past few years, as global growth has cooled and demand for commodities has been correspondingly weak, Brazil has simply not been able to achieve the kind of “easy” growth that it did during the last decade. Gone are the days of 5% and 6% GDP increases, and Brazil has slumped back to a level of growth far closer to its historical average.
As should be clear from the above, the slowdown is not really attributable to any particular policies or any particular politician. Whether Rousseff or Neves had been president, prices for commodities were going to go down and this decrease was going to exert heavy downward pressure on the country’s prospects. Had he been allowed to run for another term in office, even Lula would have suffered serious damage to his political fortunes.
Brazilians, having become accustomed to rapid growth, are furious that this growth has disappeared, and they have not been particularly discerning in their anger. Like all voters everywhere, they want results, and they’re willing to listen to anyone who promises to deliver.
Much has been made of Neves’ conservative economic views. The right-leaning business press has suggested that his surprisingly successful campaign demonstrates a groundswell in popular support for pro-market policies. This is mistaken. To the extent that they support Neves, Brazilians (who in poll after poll continue to exhibit a range of left-wing economic views) aren’t supporting abstract ideas about economics, but concrete promises of increased growth. Should Neves or a Neves-like figure ever become president he/she would be popular only to the extent that they actually spurred more-rapid economic expansion.
Like the citizens of many developing countries, Brazilians are increasingly unmoved by vacuous rhetoric and increasingly focused on results. The winner would do well to remember that.
The views expressed in this article are solely those of the author and do not reflect the official position of Sputnik.
