Rousseff v. Neves: The 2014 Brazilian Presidential Election

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Presidential Candidate Aécio Neves will challenge incumbent Dilma Rousseff for the Brazilian presidency in an October 26th runoff. March 13, 2013 (Agencio Senado/Wikimedia Commons)

Presidential Candidate Aécio Neves will challenge incumbent Dilma Rousseff for the Brazilian presidency in an October 26th runoff. March 13, 2013 (Agencio Senado/Wikimedia Commons)

“O povo não quer fantasmas do passado de volta,” incumbent Brazilian President Dilma Rousseff cautioned supporters during an October 5th election night speech. Her warning, literally translated as: “the people do not want ghosts of the past back,” alluded to presidential candidate Aécio Neves of the Brazilian Social Democracy Party (PSDB). PSDB, which governed the country from January 1995 to January 2003 under President Fernando Henrique Cardoso, is a center-right party with close ties to business and economic elites. Contrastingly, Rousseff’s Worker’s Party (PT) traditionally derives support from the lower classes and organized labor. The upcoming October 26th runoff election will not only determine the course of domestic government policy, but it will also hold broad implications in international markets. And despite a sustained push to direct anger at her opposition, Rousseff remains the central target for popular discontent and anger.

For many Brazilians, the most important factor in the upcoming election will center on the once thriving domestic economy. Under Rousseff’s tenure, both inflation and GDP growth have become areas of concern, whereby “economists slightly raised their estimates for inflation as measured by Brazil’s consumer-price index, or IPCA, for the end of this year to 6.29%” and “reduced their estimates for economic growth this year to 0.48%.” These changes sharply contrast with her predecessor, Luiz Inácio da Silva (Lula), “in which growth averaged 4.1 percent” and inflation remained relatively low. Additionally, public sector deficits continue to rise and “gross public debt has risen to 60.1 per cent of GDP from 56.7 per cent in 2013.” Macroeconomic instability, coupled with a decline in foreign investment remains the primary concern for most Brazilians. But the true roots of citizen anger and discontent rest far deeper.

2013 protests in Rio de Janeiro, Brazil against the hike in public transit fares and government corruption. June 16, 2013. (Agencio Brazil/Wikimedia Commons)

2013 protests in Rio de Janeiro, Brazil against the hike in public transit fares and government corruption. June 16, 2013. (Agencio Brazil/Wikimedia Commons)

The previously well-regarded Rousseff became the center of public outrage beginning in June 2013, when popular opinion shifted drastically and rapidly toward the negative. “More than 250,000 anti-government demonstrators” took to the streets angered over government corruption, substandard public services, police abuse and “a proposal for constitutional reform that would have limited the ability to investigate [government]officials.” Rousseff responded by promising substantial political and economic reform—the most prominent piece of which was the 2013 Brazilian “Anticorruption Law.” According to the Association of Corporate Counsel, a legal advisory organization, “until now, there was no specific law imposing liability on corporations for corrupt acts committed by their employees or agents.” But, under the newly enacted legislation, “both the corporations and the individuals involved in the corrupt activity face liability.” This measure, while undeniably constructive for long-term government stability, has failed to have an immediately noticeable impact, as examples of public misconduct continue to surface.

In September 2014, after the passage of the Anticorruption Law, an exposé by Veja news magazine named numerous top government officials in a criminal probe surrounding state-owned oil company Petrobras. According to the Brazilian Federal Police, ‘Operação Lava Jato’ (Operation Car Wash) is an ongoing “investigation of money laundering by currency exchange houses” naming high-ranking officials including mayors, ministers, Governors, deputies and Senators as primary suspects. Members of the Workers’ Party (PT), of which both Dilma Rousseff and former President Lula are members, have surfaced as central suspects in the criminal probe—thereby turning Petrobras into a political liability. While Rousseff has not been directly named in the investigation, the inquiry speaks to an ongoing narrative in Brazilian politics about the corrosive and widespread nature of political misconduct. And for many, the scandals are indicative of a lack of leadership from Rousseff. Rightly or not, she will continue to receive the brunt of public anger.

While supporters of third-place Brazilian Socialist Party candidate Marina Silva (who recently endorsed Neves) will likely decide the outcome of the election, the inevitable question remains: what if President Rousseff manages to be reelected? How would her reelection affect domestic economic growth and foreign direct investment? What will happen with the ongoing public misconduct and corruption scandals? These questions do not currently have answers; however, the international community will gain greater clarity over the coming weeks.

The views expressed by the author do not necessarily reflect those of the Glimpse from the Globe staff, editors, or governors.

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About Author

Zachary “Zach” Smith is an International Relations and Political Economy double major with a minor in History at the University of Southern California. His research interests include development economics, international law, global finance and legislative representation. He previously worked for the Governor of California, California State Assembly and Los Angeles County District Attorney. More recently, Zach worked at the Pennsylvania Office of Trade and Investment in Taipei, Taiwan as a USC Global Fellow. This semester, he is conducting funded research with Professor Nicholas Weller on the effect of social capital in group settings.

 

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