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Life after Lula


Dilma Roussef, the favourite (just) to win Brazil’s presidential election on 3 October, couldn’t be more different from her political mentor, the popular President Lula. The 62-year-old economist, former minister of energy and cabinet chief has never faced an election before, which is evidenced by her lack of charisma or oratory skills. Her long, bureaucratic sentences annoy even her advisers.

The candidate’s campaign has been more difficult than it should have been. The environment couldn’t be better for a Lula heir: Brazil’s GDP will grow an estimated 7.3 per cent this year, and around 5 per cent per annum for the following four. Since its GDP per capita is almost twice China’s and three times that of India by purchasing power parity, the country is living in a boom even by emerging markets standards. Lula has a historic popularity rating of more than 75 per cent after seven years in office.

But so far the two lead candidates, Dilma Roussef and José Serra, have failed to enchant the voters, and are almost tied in the polls with just under 40 per cent each of the predicted vote. Dilma’s chief rival, the former governor of São Paulo state, José Serra, 67, is also worrying his advisers because of his bad temper and inability to smile. Praised for his successful Aids policies when he was health minister in Fernando Henrique Cardoso’s administration, Serra also has an image of a tough manager.

Besides the personal similarities, both candidates are also much closer in political and economic views than they would like to admit. In part this is down to their personal histories. Dilma and Serra were strong opponents of the military dictatorship that ruled Brazil from 1964 to 1985. While Serra fled to Chile, where he married a niece of Salvador Allende, Dilma was active in armed militant organisations in the 1960s, captured and imprisoned in 1970 and spent three years behind bars, where she was tortured. Dilma and Serra were children of immigrants, Dilma’s father a Bulgarian, Serra’s an Italian from Calabria.

Brazil being a country where liberalism is still a bad word, the new president probably will keep the balance between private enterprise and the state in Brazil, regardless of who wins. Since the global crisis of 2008, though, defenders of a bigger, proactive state have been more vocal. Serra openly criticises the policies of the Central Bank, which makes its goal of attaining autonomy look increasingly distant.

Thanks to a vibrant domestic market and a new emerging middle class, the near future looks promising for Brazil. Yet the euphoria generated under Lula has postponed reforms and real changes needed to challenge the problems the country suffers from: an expensive, bureaucratic state; a heavy tax burden (37 per cent of GDP); a badly managed public education system; widespread violence and growing number of favelas surrounding every big city.

Yet with increasing economic and political clout, and as hosting to the 2014 World Cup and 2016 Rio de Janeiro Olympics, Brazil will stay in the spotlight in the coming years – even if it does have a less shiny president than Lula.

Raul Juste Lores is economics and business editor at Folha de S. Paulo

Election facts:

1 Population: 190 million.
2 Voters: 135.8 million (the vote is compulsory in Brazil and you can get into legal trouble if you don’t go to the ballots).
3 Youth:*** 2.39 million voters are 16 or 17 years old. At this age, however, it is not compulsory to vote.
**4 The date:
The election is on 3 October. If no candidate gets at least 50 per cent of the vote, there will a second round on 31 October.
5 The contenders: Dilma Roussef, former chief of cabinet of Lula; Jose Serra, former governor of São Paulo State; and Marina Silva, former environment minister in Lula’s administration.
6 GDP: $2.02trn, estimated growth for 2010: 7.3 per cent (source: Brazil’s Central Bank).

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The country’s new banknotes range from two to 100 reals and increase in size with the denomination. The ascending sizes are to help sight-impaired people use the notes. Countries have long varied the size of their currency but the practice was first adopted to prevent counterfeiting (so you couldn’t pass a small note off as a larger one).

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