Brazil: Bolsonaro Victory Boosts Reform Outlook

Jair Bolsonaro's PSL was President Temer’s most loyal ally in Congress, suggesting that the full  privatization of Eletrobras and a social security reform, could be approved by the end of the year, experts say. (Photo:

Brazil's congress is expected to be more market-friendly, experts say. (Photo: Mario Roberto Duran Ortiz)

Pension reform, Eletrobras privatization outlook boosted after election.

Inter-American Dialogue

Far-right candidate Jair Bolsonaro trounced his opponents in the first round of Brazil’s presidential election on Sunday, garnering 46 percent of the vote, just four percentage points short of winning the election outright. His closest rival, Fernando Haddad of the leftist Workers’ Party, trailed with 29 percent of the vote. A runoff between the two candidates is scheduled for Oct. 28. To what can Bolsonaro attribute his support? How much of a chance does Haddad have of coming from behind and winning the runoff, and what must he do over the next three weeks to achieve that? What is the significance of the strong showing of Bolsonaro’s Social Liberal Party in Sunday’s congressional elections, and what is the importance of the results of other key state and legislative races?

Rubens Barbosa, former ambassador of Brazil to the United States: Sunday’s election was the most unpredictable and polarized in Brazil’s political history. A populist, Bolsonaro can attribute his support to Brazilians’ deep disillusionment over corruption, violence and government inefficiency. Moderate and centrist positions have been replaced by rightist and conservative attitudes.

A strong anti-Workers’ Party sentiment, an assassination attempt against Bolsonaro a month before the election and the new role of social media also played an important role in Sunday’s result. Given the generalized anti-leftist feeling across the country with the exception of the northeast, Haddad has no chance to come from behind and win the runoff no matter what he does. The election has shown that the political parties mean nothing to voters.

The political system is in shambles. Twenty-one parties are represented in the Senate. Brazil, like many other countries, is deeply divided.

The so-called center-right or center-left in power over the last 30 years disappeared and has been replaced by radical extremists. Several evangelicals and rural representatives were elected to Congress and in key states. Leaders from the traditional parties were defeated. Bolsonaro’s party is second only to the Workers’ Party in the lower chamber. What remains to be seen is how governability will be secured after Jan. 1 to win approval for critical reforms in such a polarized and radicalized political situation.

For the first time, Brazil will have to live with an organized radical and neoliberal right with dangerous rhetoric about minorities.

Peter Hakim, member of the Advisor board and president emeritus of the Inter-American Dialogue: Bolsonaro’s landslide victory reflects Brazilians’ loss of faith in their government, their leaders (left, right and center) and their institutions. Brazil’s rampant political and corporate corruption, rising crime and violence across the country, a weak, uncertain economy, declining household incomes and social benefits, and deteriorating public services have fueled the mistrust and pessimism of ordinary Brazilians, and pushed many to turn to desperate measures. Though still possible, Haddad’s chances of a runoff victory are extremely remote. It would require him to win almost 90 percent votes cast for candidates other than him and Bolsonaro, who appears to grow stronger every day. Moreover, the former army major has a potent message: ‘why bring back to power the party and politicians responsible for today’s appalling conditions?’ No matter how simplistic or wrongheaded his solutions might be, Bolsonaro has engaged the issues of greatest importance to voters. Haddad’s strategy has been confined to identifying with Lula and claiming he would restore the idyllic past of Lula’s government. It sounds like a fantasy today. The legislative victories of Bolsonaro’s tiny political party provide him with unexpected support in Congress, but his future government is likely to be extremely weak. He himself has few accomplishments to his name and no serious experience of managing political affairs or anything else.

He admits his ignorance of economics and trade. In short, the threats to Brazil’s democracy and society will come not from an overly intrusive, authoritarian-inclined government. The risk, instead, is a weak, erratic government that lacks the power and competence to pursue a serious political, economic and security agenda. The next four years will be a period of grave danger for Brazil.

Monica de Bolle, director of the Latin American Studies program at the Johns Hopkins University School of Advanced International Studies: There are a lot factors contributing to Bolsonaro’s support, and we will likely be analyzing them for months to come.

Notably, however, his unexpected showing as well as the surprising shifts in Congress point to an electorate that was utterly fed up with the so-called establishment. Unlike any other candidate, Bolsonaro was able to personify the anger and sheer indignation with a corrupt establishment and weak institutions that have become highly politicized. In this context, Haddad faces a very steep climb in the next three weeks. It will be extremely difficult for him to turn around the sentiment that has rallied behind Bolsonaro—many say that he needs to make a gesture to the center and recognize the failings of the Workers’ Party (PT) over the last few years. I agree, but am not sure what kind of centrist message he can deliver in view of the strong anti-PT sentiment that has taken over Brazil. PSL’s strong showing boosts Bolsonaro’s political capital and potential ability to form a coalition, something that many analysts were deeply skeptical about.

Melvyn Levitsky, professor of international policy and practice at the University of Michigan’s Gerald R. Ford School of Public Policy and former U.S. ambassador to Brazil: Jair Bolsonaro was projected to lead the first-round election results, but he exceeded the polling margin over the second-place candidate, former São Paulo Mayor Fernando Haddad, by a considerable percentage. Bolsonaro’s popularity is largely based on public dissatisfaction with a number of problems for which he has devised simplified, often violent and sometimes unlawful solutions: widespread corruption, drug trafficking and crime, gang control of large urban areas, police ineffectiveness and a general public disgust with a dysfunctional government that does not seem to be willing or able to attend to the people’s needs.

Being stabbed certainly didn’t hurt his image as Brazil’s savior. He also struck a Trump-like, ultra-nationalist chord by emphasizing how these issues were embarrassing Brazil and how he planned to return Brazil to greatness. (‘Let’s make Brazil great! Let’s be proud of our homeland once again!’) Bolsonaro seems to be riding a global wave of populist, nativist movements based on general discontent; witness events in places like Poland, Hungary, Romania, the Philippines, Russia and the United States. Haddad, who visits former President Lula in prison every week, is counting on votes from the left that boosted Lula to the presidency. That tactic has a limit. Lula’s Workers’ Party (PT) lost its reputation for honesty and efficiency via the numerous scandals involving Lula himself, a number of his appointees and those of his impeached successor, Dilma Rousseff. Bolsonaro should win. The question is how will he govern? His party is small so he will have to build a coalition. It is clear he recognizes this. His first words after Sunday’s election seemed to focus on moderating his image and diminishing the fire and brimstone of his campaign. We will have an indication of his governing style in the content of his campaign during the run-up to the second round.

Mark Langevin, director of BrazilWorks and senior fellow at the Schar School of Policy and Government at George Mason University: The election reveals a rapid political realignment of the Brazilian electorate. A near majority of voters ditched the traditional parties in favor of Bolsonaro, his sons and his Social Liberal Party (PSL). The critical election featured a substantial bloc of voters who lean toward civilian authoritarianism, openly celebrate the military dictatorship and advocate for reducing restrictions on gun ownership. In the past two weeks, voters joined the bandwagon in hopes that Bolsonaro can downsize crime and corruption.

The realignment is fully underway in the Chamber of Deputies where the PSL elected 52 candidates to become the second-largest party caucus after the Workers’ Party (PT). The PSL was President Temer’s most loyal ally in Congress, suggesting that a number of controversial legislative projects, including the full  privatization of Eletrobras and a social security reform, could be approved by the end of the year. The overall incumbent re-election rate tumbled, but the realignment was much less pronounced in the Senate.

Patronage parties, including the Democratas and the Progressive Party, are likely to pursue formal alliances with the PSL in the coming months. Haddad and the PT survived the Bolsonaro bandwagon, but there is little hope that Haddad can stop the bleeding in the second round. The biggest winners are the Bolsonaro family and their social media network. Both sons, Eduardo and Flávio, will exert national leadership in Congress. The family’s success now depends less on Twitter and more on demonstrable reductions in crime and increased job creation.

Daniel Cunha, macro strategist at XP Securities and Erich Decat, political analyst at XP Investments: Jair Bolsonaro has proved to be not just a candidate, but rather a movement—an electoral force not seen since Lula in the 2002 election. In general, all local and regional candidates who linked their candidacy to Bolsonaro’s campaign, directly or indirectly, were elected, and with stronger support than polls had suggested.

To some extent, the far-right candidate confirms his stronger momentum and heads to the runoff as the clear favorite against Haddad. That is not to underestimate the second round, but all Bolsonaro has to do is to avoid any major mistakes in the next 20 days to become the next president. In this context, he might adopt a more passive strategy by skipping some TV debates and avoiding direct combat with Haddad. He’ll probably prefer to give occasional interviews for certain TV channels that should be chosen very carefully, in addition to
continuing to rely on the Internet. Regarding Bolsonaro’s governability in a possible future government, there are more questions than answers. However, Bolsonaro has said he will seek the support of the center-right.

It’s a good sign for those who campaigned against the establishment. The administration’s upper hand will be necessary to try to address controversial reforms, but it is not sufficient. Having political skills and the right team in the right place is still pivotal.

Ana Heeren, managing director for strategic communications and Latin America head at FTI Consulting: Bolsonaro’s dominant performance reflects the powerful anti-Workers’ Party (PT) and anti-establishment sentiment being fueled by the PT’s central role in massive corruption scandals and its inability to resolve Brazil’s financial crisis and rising levels of violent crime. The overwhelming desire for new leadership was also seen in other key state and legislative races. Bolsonaro’s PSL party saw unprecedented growth, dominating in Brazil’s two most populous states, São Paulo and Rio de Janeiro; and securing four seats in the Senate (where it previously had none) and 52 in the lower house (where it previously held eight). The Senate only had eight senators re-elected of the 54 seats that were up for re-election, and several traditional political figures were voted out to make way for new leaders. These results, borne of the same anti-establishment sentiment propelling Bolsonaro’s first-round win, shift legislative power to the right. Critically, this shift in the legislature will give Bolsonaro, if he wins the runoff, a significantly larger pool of allies in Congress and key states than expected.

That said, to approve constitutional reforms, such as pension reform, 66 percent of the legislature is needed, and an absolute majority requires 257 votes. This weekend’s first-round results have certainly dampened concerns that Bolsonaro would not be able to govern if elected president, but he would still need to forge alliances to be able to enact major reforms.

Juliano Griebeler, director of government affairs at Barral M Jorge Consultores Associados: The main driver for Bolsonaro’s support came from anti-Workers’ Party (PT) sentiment and fear that Bolsonaro could lose to the PT in the second round. In the second round, Haddad will have to win over all of Gomes’ supporters, and he will have to win the support of the voters who did not vote in the first round and those who cast blank ballots.

For his part, Bolsonaro has to keep with his successful anti-establishment strategy. So for the next three weeks, we can expect Bolsonaro to increase his rhetoric against the PT and Haddad to soften his rhetoric to try to win over undecided voters. The anti-establishment feeling that was apparent in the presidential election was also reflected in the congressional elections. Bolsonaro was able to help elect 52 representatives of his party to the Chamber of Deputies. This will help Bolsonaro construct a government coalition and have governability to move forward with his agenda. We can expect a more conservative Congress in social aspects and one that is more market-friendly.

Regarding states, the PSDB was not only defeated in the presidential race but also in the Senate.In elections for governor, however, seven party members managed to advance to the runoff, where they are the favorite in at least three of those races. The PT won in the states in which it traditionally obtained a good performance (Bahia, Piauí and Ceará), but lost in Minas Gerais. The scenario ignited a warning signal in Haddad’s campaign, as states where gubernatorial candidates won first-round victories might see higher abstention rates in the runoff.

Thyago Mathias, director of advocacy and strategic communication at Llorente y Cuenca in Brazil: The first-round results confirm the growth of a conservative wave in Brazil. This wave gathers voters disillusioned with politics and against corruption and the Workers’ Party. What do these voters agree on? The answer includes a variety of issues including more security and the social agenda. Bolsonaro, who has voted for a greater state presence in the economy during his 27 years as congressman, is now signaling that he will avoid raising taxes and promote looser regulations. Bolsonaro’s electoral base is centered around a strong conservative agenda. The challenge for Haddad is to move toward the center to congregate millions of votes needed from other candidates or from the 40 million voters who stayed home or cast blank ballots in the first round.

Republished with permission from the Inter-American Dialogue's daily Latin America Advisor


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