It is true when BBC analyst, Wyre Davies, says that Brasil is now a split nation. Elections, which were originally held on October 15th of this month were continued as the process went into a run-off between leftist incumbent Dilma Rousseff and business friendly Aecio Neves.
Today, Rousseff took the election with 51% of the votes, favored by the poor by the implementation of welfare programs lifting many Brasilians out of poverty, but her competitor took 48% of the votes. By these numbers, the country is split almost entirely in half by different regions. Depending on who won the presidency economic out-looks and fiscal planning would have been dealt with in completely different ways.
Although Rousseff can celebrate the victory, there will be no break for her anytime soon. As Brasil has been in an economic flat-lining, with a faltering economy and high inflation rate, the global market is anxious for what will happen.
Brasil like a few other countries has switched to high government involvement within the communities, services, and businesses. However, the increased government intervention within the economy has opened up better education opportunities and a more accessible healthcare system. Rousseff’s administration did create these opportunities for some, but with a weak infrastructure there are still many problems with the development and services according to Reuters.
Rousseff also faces problems from environmentalists, scholars, and indigenous communities. The opportunity cost for Rousseff’s chosen way of development has lead to the displacement and loss of land for many of Brasil’s most diverse indigenous groups of people. According to Global Voices Online,
This land-hungry economic push under Brazilian President Dilma Rousseff, including road construction, mining, hydroelectric plants, and the exploitation of natural resources, has led to violent clashes between activists and police throughout Brazil. Rousseff’s indigenous policy has been the target of criticism from experts and activists who point out that such development is costing tribes their territory.”
Regardless of these factors and a slight plummet in the market due to a force-able reelection of Rousseff, Brasil’s gross domestic product is at about $2 trillion and is therefore still the largest in all of Latin America. Now Rousseff will have to face further corruption claims and figure out how to please the other 48% of voters that did not support her.
“I voted for Morales,” said Flavia Nunez, a 50-year-old office clerk, in central La Paz. “These other right-wing candidates would take us back in time. I don’t want that.”
Sunday, October 12, 2014, poll booths were up and running in Bolivia. However the elections took a predictable course as current president, Evo Morales, appears to be the clear leader. Morales, famed for his indigenous Aymara descent and the son of a coca farmer, is assumed to win the Bolivian elections for a 3rd term.
Although Bolivia has a system limiting presidents to two terms, in 2009 Morales lead a charter to “ignore his first term, which was under the old dispensation,” says The Economist.
Bolivia, having about 6 million registered voters, was urged to go vote by Morales in an effort to demonstrate the country’s unity. As stated by Flavia Nunez in the above quote, many support Morales’s greater push for nationalism and growth, many Bolivians see this movement as progressive and what they need.
According to the World Bank, the indigenous community makes up about 62% of the country. Bolivia and Guatemala are currently the most populous for indigenous people in all of Latin America, these indigenous groups maintaining the ethnic majority. It is no wonder, that Morales strikes a relatable chord with the people. The Economist noted,
A September survey by Equipos Mori, a pollster, shows that 58% of Bolivians believe the country is “moving in the right direction” and 75% approve of Mr. Morales’s management.”
Many Latin American countries like Venezuela, Peru, Argentina, Brasil, Ecuador and Bolivia (as examples), have emerged as natural gas and crude oil exporters. Within the last couple years, Bolivia’s exportation of gas, minerals and soybeans have enabled the economy to maintain a growth rate of about 5% since Morales took office in 2006.
With similar ideas to Chile and Argentina, Bolivia has begun a nationalization movement,
Semi-nationalizing the hydrocarbons industry enabled him to channel much of this windfall into state coffers. –The Economist
Often times Morales is compared to presidents from Ecuador and Venezuela with his strong pull and almost dictatorship type control within the country, however the people do not paint him in such a light. Political enemies have been prosecuted by Morales before, and his control of about 2/3 of Congress, allows him to easily create and implement new policies.
Bolivia has the resources, but Morales’s “anti-American and anti-capitalist rhetoric” as noted by The Economist foreshadow possible xenophobic problems and an uncooperative market for international trade and investment.
Bolivia is another example of the populist movement within Latin America, the question is if they will take the bait from similar socialistic systems like Russia and China, or will they shut down and miss the international opportunities they need to continue their economic growth?
The run-off election in Brasil continues. This past Sunday, August 5, 2014 was election day in many parts of Latin America, but for Brasil it was a presidential election. The selection of Brasil’s new president is key because it will not only effect Latin America’s largest economy, but will send a message to the international community of how this newly emerged trading partner will react in the future. Will it be more open to free trade and investment, or become more nationalized and privatized with its enterprises?
With 41% of the vote, Rousseff still remains the favorite within Brasil. Rousseff has strong support among the poor, however Neves is expected to pick up the leftover votes from those who were originally voting for third place candidate, environmentalist Marina Silva.
Neves and Silva both had similar ideals for the country, such as wanting to reduce the size of government and free-up private enterprise. Neves is now taking on some of the concepts that Silva used in her campaign, for example, making use of the phrase, “a candidate for change,” one that Silva often used in her candidacy.
On the other hand, Rousseff has advertised to the people, that Neves and his alliance with the PSDB (Brazilian Social Democracy Party) symbolize “ghosts of the past.” According to Reuters,
a reference to an austerity drive, layoffs and the privatization of state assets when his Brazilian Social Democracy Party, or PSDB, last held power from 1995-2002.
As under Rousseff’s presidency, Brasil has been in an economic rut, Neves retorted to Rousseff’s condemnation by saying,
The truth is Brazilians are far more concerned with the monsters of the present: high inflation, recession and corruption.”
Official results, as of 7:01 p.m. ET, Brasil’s presidential election is forced into a runoff between: Rousseff and Neves.
According to CNN,
Preliminary election results from Brazil show President Dilma Rousseff in the lead. With nearly 88% of votes counted, Rousseff had 40.68% of votes, Brazil’s Supreme Electoral Court said. Aecio Neves was in second place with 34.71%. And Marina Silva was in third place with 20.99%. If no candidate wins more than 50% of votes, there will be a runoff between the top two candidates.”
Today, as voting was obligatory for all Brasilian citizens, the expected runoff to be between Rouseff and Silva, has taken an unexpected turn. Silva has been outvoted by Neves. Neves’s campaign coordinator José Agripino Máia said prior to results flowing in,
Going into the second round, the PSDB [Brasilian Social Democrat Party] will get in touch with the PSB [Brasilian Socialist Party], but no channel of communication has been opened about this issue. We intend to get to the second round.”
And so Neves had made it to the second round. Neves had been attacking Silva for weeks, saying she was inexperienced and “prone to flip-flops,” however the two had very similar economic plans for the country. Those economic policies being greater support for Central Bank autonomy and implementing new monetary policy.
Rousseff, although recently condemned for a faltering economy, is still being shown favoritism within the nation from voting polls. According to CNN,
She democratized Brazil’s electricity sector through the “Luz Para Todos” (Light for All) program, which made electricity widely available, even in rural areas.”
Rousseff also defends governmental spending, saying that the majority of funds went toward infrastructure projects and not toward the 2014 FIFA World Cup. She also claims that because of her and former President Lula da Silva’s work, a mass amount of Brasilians have come out of poverty.
From a social standpoint, Rousseff is “pro-life” in consideration to abortion as she told Aparecida TV, a Catholic network. However, under her administration Civil Union for gays has been legalized, as she has pledged to fight for gay rights.
If Rousseff wins, will things really be different? Alberto Ramos, Senior Latin America Economist at Goldman Sachs states, that yes,
there is this perception that the economy is trapped in a poor equilibrium of low growth, high inflation and an un-competative economy, a misaligned exchange rate, excessive activism on the fiscal front through the budget, quasi-fiscal through the public banks…bottom-line, the economy is showing significant macro-imbalances…it is hard to imagine that investment will pick up until we sort out those imbalances.”
Ramos, does says though that things will definitely different after this election. Whether Rousseff or Neves, there will be great problems to be tackled for the next president in order to realign Brasil for the international market and as well as for internal development.
Brasil, with the world’s seventh largest economy and a total estimated GDP of $2.4 trillion according to Forbes, is holding their presidential elections today; October 5, 2014.
Original candidates running are incumbent President Dilma Rousseff, Brasilian Socialist Party Candidate Eduardo Campos, and Aecio Neves Brasilian economist and former president of the Brasilian Social Democracy Party. However in August 2014, the foreseen elections took an unfortunate turn.
The Brazilian Socialist Party candidate died when the private Cessna Citation in which he was traveling crashed into a residential area of the coastal city of Santos, about 35 miles south of São Paulo,” as reported by the Wall Street Journal.
Taking over Campos’s place was Marina Silva an environmentalist and politician is was a former member of the Workers Party (WP).
So why is this election so important to the global community? What does each candidate stand for and how does it effect the future of Brasil?
Electing a new president is an exciting thing, and this Sunday the new face (or the same) of Brasil is to be voted on. The ideologies of each candidate would represent something different for the country; in the wake of inequality protests, a fallen economy and scandal, the chosen leader will distinctly shape the future of the country and its reactions to outside relations.
President Rousseff, is the 36th incumbent president and the first woman to be president in Brasil. The daughter of a Bulgarian businessman, Rousseff grew up in the middle class and joined a socialist movement during her younger years, eventually leading to her arrest as she was apart of a Marxist Urban guerilla that fought against a military dictatorship.
In 2002 Rousseff began to work in the committee of energy and policy under former President Luiz Inacio Lula da Silva. From there in 2005 she became Minister of Energy working until 2010 when she stepped down to run for president and won.
Despite Rousseff’s radical roots, her ideology has changed drastically from Marxism to a pro-capitalist framework. Although from the get-go it was assumed Rousseff would be pro-privatization and neoliberalism, her policies and actions over privatization have been ambiguous. According to the New York Times,
The election has been followed closely throughout Latin America, with Ms. Rousseff’s government supporting leftist allies in Venezuela and Cuba. The campaigning has also fueled volatility in financial markets as big investors expressed anxiety over some of Ms. Rousseff‘s policies, which have expanded the influence of big state companies in the economy.”
A strong competitor to Rousseff, is Marina Silva, “the daughter of impoverished rubber tappers from the Amazon, ” as Reuters describes her in an article. Silva, of Portuguese and African descent, comes from a humbling background, that is relate-able to many regions and groups within Brasil.
Asked in an interview with Reuters last week what it would mean to be Brazil’s first black president, Silva replied: “Not just (that) … I’d also be the first environmentalist. I’m very proud of my identity as a black woman,” she continued. “But I don’t make political use of my faith, or my color. I’m going to govern for blacks, whites, (Asians), believers, non-believers, independent of their color or social conditions.”‘
Silva, as an environmentalist and winner of the Goldman Environmental Prize, plans to protect the amazon region and maintain other environmental stability projects. However, Silva is more conservative than expected as she has openly embraced large scale hydroelectricity projects and offshore oil development. According the The National Interest,
On foreign policy, Silva and her team have signaled that they would like to enhance Brazilian trade with the United States, and they have indicated that a Silva administration would pursue a more balanced foreign policy, which will delight Washington and spook both Caracas’ increasingly desperate government and the glacial, gerontocratic government.”
This is a very important point, as Rousseff was working with her allies of Venezuela and Cuba to move away from the United States and increase partnerships with China and Russia.
Silva also points out that mass deforestation has been the due to the policies and lack of protection under Rousseff, according to the New York Times. Silva wants to:
shift toward energy sources viewed as having less of an impact on the environment. With the Amazon gaining importance as a strategic pillar of Brazil’s economy — which is the largest in Latin America — the jump in deforestation has each candidate lashing out at the other.”
Last, but not least is candidate Aecio Neves, who introduced the idea of a “Management Shock.” Under this idea, a set of reforms would be implemented designed to bring the state budget under control by reducing government expenditure and promoting investment. Unfortunately, in the most competitive election since the reestablishment of democracy in Brasil in the 1980’s, the odds are not in the favor of Neves as he has about 1/5 voter support, according to Bloomberg News.
The chosen representative for the PSDB (Brasilian Social Democrat Party), many of Neves’s ideas align with Silva’s in slowing inflation to the target number of 4.5 percent and pledging to adopt stricter “fiscal discipline,” as sited by Bloomberg News.
Although Rousseff, the estimated leader in the polls, greatly attracts the working class and the majority of Brasil in-spite of the economic recession and a slowed economy, economic gains have been made to bring Brasil to where it is and the people will not forget that. What many have realized however, is
…that Rousseff has placed vanity projects, like hosting the 2014 World Cup and the 2016 Summer Olympics, over more fundamental issues like the cost of public transportation, health care and education.”
As said by The National Interest, prior to and in the wake of the 2014 World Cup, the Rousseff administration has seen widespread protests and fended off corrupt allegations.
This blog is a platform for the investigation of the economic situations and governmental transitions within Latin America and how these factors have increased activities with unusual trading partners.