Rousseff Retakes Lead as Voters Doubt Challenger

Brazilians aren’t so enthusiastic about their president but doubt if her challenger can do a better job.

President Dilma Rousseff during an Independence Day parade in Brasília, September 7
President Dilma Rousseff during an Independence Day parade in Brasília, September 7 (Blog do Planalto/Roberto Stuckert Filho)

Brazil’s president, Dilma Rousseff, has widened her lead over her closest rival, polls show. Earlier surveys had Socialist Party candidate Marina Silva with more support but as the election draws nearer, the Workers’ Party incumbent looks likely to stay in office for another four years.

Polling firm MDA said on Monday Rousseff would win a likely second voting round with almost 48 percent support against 39 percent for Silva. A Vox Populi poll released the same day showed Rousseff with a 7 point lead.

A runoff will be called if no candidate secures more than 50 percent support in the first round on Sunday.

Silva, who took over as Socialist Party candidate in August after presidential hopeful Eduardo Campos had died in a plane crash that month, initially surged in the polls with strong support from especially middle-class and young voters who backed her pledge to clean up Brazilian politics. Disillusionment with Rousseff’s inability to deliver higher growth also buoyed her candidacy. The economy expanded just 2.5 percent last year compared to 7.5 percent growth as recently as 2010.

Lately, however, doubts have grown over Silva’s ability to govern without the support of Brazil’s traditional parties.

The alliances led by Rousseff’s Workers’ Party and the centrist Brazilian Social Democracy Party are expected to remain the two largest blocs in the National Congress, giving them the power to derail a possible Silva presidency.

Silva does not appear given to compromising, even if she would lack a parliamentary majority as president. She was environment minister in the cabinet of Rousseff’s predecessor and mentor, Lula da Silva, but resigned in 2008 in protest to what she perceived as the government prioritizing economic development over green policies.

She has shown more pragmatism as a presidential candidate, promising to maintain Brazil’s relatively liberal economic policy — a legacy of both Lula and his Social Democracy Party predecessor, Fernando Henrique Cardoso — giving the central bank autonomy, reforming taxes and curbing what she calls “unsustainable” state support for banks and the national oil company, Petrobras.

This has reassured businessmen and investors although her election platform is full of costly promises, such as raising education spending from 5.6 to 10 percent of economic output, raising health spending, expanding Lula’s popular Bolsa Família social welfare program to ten million more families and doubling the number of subsidized homes. It is difficult to imagine she would be able to fulfill all these promises without breaking another pledge — not to raise taxes. Let alone with a hostile Congress.

Doubt about Silva’s ability to deliver should not be mistaken for newfound enthusiasm for Rousseff. A technocratic former chief of staff to Lula, she has started to change Brazilian politics’ culture of corruption, firing several cabinet members for ethics breaches and pushing Congress to enact a comprehensive anti-graft law while personally vetoing loopholes and demanding higher fines. But structural reforms to improve Brazil’s competitiveness over the long term have been slow to come about.

Brazil’s tax regime is especially burdensome. The World Bank considers it the worst place in the world to file one’s taxes. Payroll taxes add a staggering 58 percent to the average salary. Import tariffs remain high while customs procedures sometimes amount to outright obstructionism of foreign trade.

The government spends 13 percent of gross domestic product on pensions, allowing the average Brazilian to retire at the age of 54. By contrast, just 1.5 percent of economic output is spent on infrastructure even if its weak network of ports, railways and roads is a huge impediment to Brazil’s growth.

Rousseff’s administration has also been prone to interventionism, ordering state banks to slash lending rates and raising taxes on foreign borrowing in an attempt to drive down the exchange rate of the real. Such policies harken back to the years before Cardoso embarked on a program of comprehensive liberalization that saw Brazil briefly overtake the United Kingdom as the sixth-largest economy in the world in 2011.

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