Brazil’s Election Illusion

Brazil’s ongoing presidential election has been described as electrifying and unpredictable, suitable for a telenovela. To be sure, there has been no shortage of high drama: the tragic, accidental death of a major candidate, the spectacular rise and fall of his vice presidential pick who took his place, and the late surge of a candidate who most pundits not long ago had written off. Given the volatility, few dare predict with confidence what will happen in the Oct. 26 runoff between incumbent President Dilma Rousseff of the Workers Party (PT) and former Minas Gerais governor Aécio Neves of the Social Democratic Party (PSDB).

To add to the excitement, the second round has been cast by the two remaining candidates and their respective supporters as an ideological battle that pits left (Rousseff) versus right (Neves). According to the Neves camp, Rousseff would continue the state-interventionist, protectionist policies she pursued during her first term, which have led to inflation and an economic slowdown, while Neves would embrace more market-friendly approaches and would open Brazil to the world, including the United States. Rousseff, in turn, accuses Neves of proposing an economic program that serves the bankers and industrialists, while planning to cut back popular welfare programs that have made Brazil more equal and middle-class.

Rousseff and Neves spent most of their three face-to-face debates trading charges of corruption and nepotism (though the third had a less bitter tone). Despite the bitterness of the campaign, however, the platforms of the two candidates are remarkably similar. (More than a sharply drawn ideological clash, the divisions are more like those between Old Labour and New Labour in Britain.) Both want growth and stability, poverty reduction, better public services, and more infrastructure. Both have called for improved relations with Washington.

The negative campaigning on both sides appears to have had a considerable impact on Brazilian voters. Headlines in every newspaper this month blared Rousseff’s accusation that Neves and his party’s exploitation of the latest corruption scandal was designed to foment a coup against her government. Neves had said that Rousseff’s party was guilty of "handing the country’s largest company over to a gang of thieves." In the first debate, Rousseff went on the attack, charging Neves with using public money for personal gain when he was appointed director of the Federal Savings Bank by his cousin in the 1980s. Rousseff claims that when Neves was governor of Minas Gerais, public health deteriorated in the state, while Neves says that Rousseff’s government has lost the capacity to attract investment.

The poor and the vulnerable middle class are concerned that a Neves victory could put at risk their real social gains, while the nation’s well-off are worried that Rousseff is running the economy into the ground. Poor Brazilians — most receive cash payments and are concentrated in the north of Brazil — overwhelmingly favor Rousseff, while those from the upper strata, particularly in the southern region around São Paulo, Brazil’s major city, are keen on Neves. Both Rousseff and Neves are disputing voters in the middle, who are less set in their positions and more susceptible to campaign appeals.

For a time, Marina Silva, the former environment minister who, after a stunning ascent, failed to make it to the final vote because of negative ads against her and her mistakes, had occupied the middle ground. Silva and her adopted Socialist Party have backed Neves in the second round, though it is not clear whether that will be enough to deny Rousseff re-election.

The election may be mercurial, but that doesn’t mean Brazilians have been indecisive. Voters have displayed an altogether reasonable desire to have it all: continued social programs that are widely associated with the last 11 years of PT rule, coupled with an end to politics as usual and its attendant corrupt practices that do not befit a modern democratic society.

Not surprisingly, in the final days before the Oct. 26 vote, both Rousseff and Neves, who were never as far apart as they were commonly portrayed, have notably moved toward more centrist positions, nearly converging on their promise to strengthen programs for the poor, curtail corruption, protect the environment, and spur economic growth. They both seek to reduce inflation to 4.5 percent and strengthen the Bolsa Familia, a program that transfers small — but significant for the recipients — cash bonuses to poor families. In fact, it seems that the one of the few areas where there’s fundamental  disagreement between the two candidates is over monetary policy.

While such pledges can be readily dismissed as empty campaign posturing to secure ballots, it is likely that the policies the candidates would eventually adopt as president overlap in significant respects.

The election puts into sharp relief two competing narratives that have recently dominated Brazil coverage in both Brazilian and international media. The first highlights the impressive expansion of a middle class — some 40 million over the past 11 years, according to Brazilian government statistics — and the corresponding reduction in poverty and inequality. Thanks to a relatively benign economic environment with substantial investment in emerging markets (until recently) and external, chiefly Chinese, demand for the country’s commodities, together with vigorous social programs like the Bolsa Familia, previously poor Brazilians have enjoyed more access to consumer goods and jobs. Per capita income and employment levels have risen.

Politically, most of the credit for such social strides goes to Luiz Inácio "Lula" da Silva, the two-term PT president who left office in 2011 with 80 percent approval and remains enormously popular and a major (thought not fully tapped) asset for Rousseff in the final round. (In 2010, Lula’s last year in office, growth reached a record 7.5 percent.) To counter the charge of being indifferent to the poor, Neves points to the fact that former president Fernando Henrique Cardoso of the PSDB not only managed to stabilize the economy during his two terms in office (1995 to 2003) but also succeeded in getting cash-transfer programs off the ground.

The second narrative is the country’s rampant corruption, which is one of Rousseff’s chief vulnerabilities. To be sure, corruption has been endemic in Brazil, but two major scandals during the PT government inflicted more political damage on the party that has been in power since 2003. Since Rousseff served as energy minister under Lula, the recent and mounting charges of bribery and kickbacks at Petrobras, Brazil’s state-owned company, could particularly hurt her. As energy minister she was formally board chairwoman while the corruption took place.

The country’s long-ossified bureaucracies, now filled with PT political appointees after 11 years of PT rule, are a convenient target for Neves, who is positioning himself as being aligned with the kind of reforms Brazilians overwhelmingly favor. Rousseff, of course, is doing precisely the same, insisting that she too is committed to clean and honest government. Since taking office she has dismissed eight ministers charged with corruption. Still, if the corruption question becomes more salient in the final days of the campaign, that will not be good news for Rousseff.

Corruption often has a greater political impact when the economy is not performing well. In the case of Brazil, though unemployment remains low, inflation and interest rates are climbing, and the economy is stagnant — the result not only of a more problematic external environment but also of some questionable policy decisions. Neves and Rousseff both promise to jump-start the economy. Neves supporters are convinced that Rousseff is incorrigibly tied to a closed economy, while Rousseff backers believe that under Neves economic growth will only benefit the top stratum. In practice, however, the two candidates are not so dramatically far apart when it comes to economic policy. If re-elected, for example, Rousseff has said she will massively change her cabinet. She knows that continuing with current policies will doom her second term. And Neves would have to contend with parts of his constituency who are anti-Rousseff but are not exactly champions of an unfettered market.

In addition, in foreign policy there will probably be greater coincidence between a Rousseff and Neves presidency than is commonly thought. There has been a tendency to overstate the differences, particularly by Neves supporters in Brazil and abroad, who are eager for a greater opening of the economy and a more robust trade policy, along with friendlier relations between Brasilia and Washington. The bilateral relationship has been strained, most recently because of revelations that the National Security Agency had been spying on the Brazilian president and the state-owned company Petrobras. The controversy led to last year’s cancellation of a planned state visit to Washington and a frosty relationship since.

There is little question that much of Washington, frustrated with Rousseff, would likely be more enthusiastic and energetic in pursuing new initiatives with Brazil under a Neves government. But under either administration, rapid improvement of U.S.-Brazil relations is unlikely: There are too many disagreements on bilateral, regional, and global issues. Persistent trade disputes, contrasting views on how to respond to anti-democratic developments in Latin America, and sharp differences on approaches to dealing with the global economic crisis will make it difficult to turn the page.

For now, neither Washington nor Brasilia seems particularly prepared to make a significant and sustained investment in a better relationship. It is useful to remember that the global stature Brazil has achieved in recent years — inclusion as a BRIC member, along with Russia, India, and China, major roles in WTO negotiations and environmental conferences, a credible bid for a permanent seat on the United Nations Security Council — is to some extent attributable to its independence and distance from the United States. The prospect of a "strategic partnership" between the United States and Brazil is far-fetched, at least in the short term.

Few Brazilians these days, though, are thinking about foreign policy — much less about relations with Washington. They are, understandably, focused on domestic priorities and more urgent challenges such as securing better education, health, security, and justice for most citizens. Progress on these scores has been disappointing. Corruption, waste, and the poor quality of public services galvanized the massive protests that swept Brazilian cities last year. Today, the streets are calm but the problems remain unaddressed. After the drama of the presidential campaign, a new administration will turn to the tough task of governing a complex country, with multiple political and societal forces and pressures.

An election dominated by negative campaigning should not obscure the broad consensus among Brazilians about the path their country should pursue. The goals are clear and widely shared. The challenge is finding the leader and team best equipped to navigate Brazil’s political and bureaucratic thicket.