This post was originally published on opedspace.com on November 2, 2014.
From the moment results were announced on last Sunday night, the pre-eminent narrative about the presidential election in Brazil has been how it has divided the country. The Economist, for example, posted a graph comparing the vote weighted according to population and according to income, with the opposition candidate Aécio Neves from Brazilian Social Democracy Party (PSDB) winning in the latter. The implication, as portrayed in mainstream media, is that the incumbent government has polarized the electorate, pitting the "productive" part of the country against those who rely on redistributive policies, most famously the Bolsa Família (a conditional cash transfer program).
The implication, as portrayed in mainstream media, is that the incumbent government has polarized the electorate, pitting the "productive" part of the country against those who rely on redistributive policies...
The incoherence of this narrative has not escaped a number of commentators. To declare that the electorate is now "divided" implies that it was previously "united." This, to say the least, is a strange way of describing what has historically been one of the most unequal countries in the entire world. Not only is Brazil "divided" in terms of class, there are several other divisions in Brazilian society, such as those based on geographical region, race, gender, or sexual orientation. The failure to acknowledge these is an indicator of the enduring power of a patriarchal mindset which continues to hold sway (albeit diminishing) over Brazil’s collective consciousness. Having been voted in by the poor is seen as a mark against incumbent president Dilma Rousseff and her party, illustrating the resistance of a large segment of the population to the basic republican value of equal citizenship.
Although some of the rhetoric surrounding the election is fanciful, this was still the closest one in Brazilian history (Rousseff won 51.64 percent of the vote against the 48.36 percent obtained by Neves). The opposition also seems to have emerged, under the leadership of Neves, stronger than it has been in recent years, largely due to the culmination of a process of electoral realignment first observed during the 2006 election. The Workers’ Party (PT), to which Lula and Dilma belong, has slowly alienated the middle and working classes of the South and Southeast of the country where it originated, to become the party of the lower classes and the lumpen-proletariat, who have made historic welfare gains over its twelve years in power.
Despite all the fear of a "divided country", an alternative interpretation of the electoral outcome depicts a more benign scenario: a consolidation of a two-party presidential system, similar to that of mature democracies such as France or the United States. This development is in part the result of the premature death of potential third force leader Eduardo Campos in a plane crash. Marina Silva—originally the vice-presidential candidate—replaced Campos, but her promising candidature was easily dismantled by opponents’ attacks, confirming the solidity of the two-party presidential system.
However, the situation is somewhat different if we look at the outcome of the concurrent legislative elections, which have yielded the most conservative and highly fragmented congress in Brazilian history. This is symptomatic not only of a shift to the right, but of a dysfunctional political system where the electorate sees the executive as the one responsible for bringing about social change, while representatives to the federal Congress are elected mainly as a result of local-level alliances.
Political fragmentation is perhaps the greatest challenge faced by the president. In recent years the PT resorted to pragmatic alliances (as well as more direct vote-buying) to win congressional support. This resulted in a series of damaging corruption scandals, the most recent of which involved Petrobras, the state oil company. The government has been attempting to change the rules of the game, but its most recent project of "popular consultation mechanisms" designed to bypass Congress was repealed last week and proposals for political reform have faced strong resistance from the political class. Thus, it seems like recent political dynamics will persist, although in a less auspicious environment.
Low growth (predicted at 0.3 percent this year) combined with inflation above target (running at 6.75 percent, 0.25 percent above the upper limit of the target band) is likely to lead to distributive conflicts in the coming months. Oil and power prices—frozen in the run-up to elections—will also have to be raised. Already, the Central Bank raised the interest rate last week, partly in anticipation of the coming price hike, as well as the end of quantitative easing in the United States and prospects of depreciation of the Brazilian real. A rise in expenses unaccompanied by any similar rise in revenue has led to a deterioration of the government’s fiscal accounts, with declining primary surpluses indicating a need for some fiscal adjustment. To add insult to injury, declining world commodity prices promise to affect Brazil’s most dynamic sector, agribusiness, in the near future.
Given these economic hurdles and the PT’s weakened power base post-election, it is unclear how Rousseff plans to re-ignite growth, or indeed if she has an overarching strategy at all. Previous attempts at micro-management of the economy through selective allocations of subsidies and tax exemptions have gone disastrously wrong, serving only to alienate industrialists. Dilma’s brand of "new developmentalism" is in desperate need of renewal given the difficulties her government is about to face.
Despite the looming challenges, one can get some consolation by looking at the alternative project offered in these elections. With all its problems, the PT government has been the first government to heavily invest into the capabilities of the underprivileged. At this juncture, a return to PSDB rule of Brazil would probably have resulted in an at least partial reversal of these gains, perhaps justified by "economic necessity." The year ahead will be difficult, but one thing we can be sure of is that under this administration, the interests of the most vulnerable will not be ignored.