Bolsonaro’s Victory Opens New Chapter for Brazil, But Path Forward is Uncertain

10-29 blog post

Summary

 

Brazillian Congressman Jair Bolsonaro dubbed the “Donald Trump” of Brazil has won the presidential election against leftist candidate Fernando Haddad, 55% to 45%. Hailing from the once small Social Liberal Party (PSL), Bolsonaro now holds Brazil’s highest office. Furthermore, his party now has 62 representatives in the Federal Chamber of Deputies and the PSL will most likely have majority representation, making Brazil’s Congress conservative. His promises to “unify and pacify” Brazil stands in contrast to a largely divisive election marred by strong partisanship. Bolsonaro has been known for his rather harsh rhetoric on the campaign trail but seems to be tempered after his win for the time being. This conservative pivot marks a new path for Brazil which has left many uncertain about its future. At the forefront of Bolsonaro’s proposed changes is an economic plan which, while generally well regarded, has created debate as to whether the country’s economy is better off remaining state-led or switching to market-led. These plans have been praised by a former advisor to President Trump, Steve Bannon, as “Enlightened Capitalism” while Trump himself called to congratulate Bolsonaro and tweeting that both countries “will work closely together on Trade, Military and everything else!”. Brazil’s future is vague at the moment, but going forward, the tense political situation domestically needs to be quelled after such a controversial election cycle.

Bolsonaro’s Victory Opens New Chapter for Brazil, But Path Forward is Uncertain

Far-right congressman Jair Messias Bolsonaro was elected president of Brazil last night with 55 percent of the vote, to leftist Fernando Haddad’s 45 percent. Bolsonaro’s decisive victory was matched down-ballot: allies from other parties were elected governors of São Paulo, Minas Gerais and Rio de Janeiro—the largest and most influential states in Brazil. His once tiny Social Liberal Party (PSL) elected 62 deputies to the Federal Chamber of Deputies, making it the second largest delegation—but PSL will likely become the largest party in February, overtaking the Workers’ Party, when a dozen elected conservative deputies are expected to migrate to the PSL because their parties did not reach the minimum vote threshold required to have representation in Congress.

The former army captain celebrated his electoral triumph by promising to “unify and pacify” Brazil after the most polarizing campaign since the reinstatement of democracy in the mid-1980s. The electoral environment, poisoned from the beginning by extreme partisanship, violent rhetoric, and the candidate’s own hardline stances, became toxic after Bolsonaro was stabbed at a campaign rally in early September. Addressing supporters in Rio de Janeiro after his victory was confirmed, the president-elect promised that under his leadership “it is not going to be us against them”—a jab at the unsuccessful strategy of the Workers’ Party (PT) of former President Luiz Inácio Lula da Silva.

Bolsonaro’s conciliatory statement contrasted with the tone of his supporters’ victory street parties in major cities, which (in keeping with the focus of the campaign), were more a celebration of the “end of the PT” than a celebration of the new leader and Brazil’s future. The statement suggested that Bolsonaro understands that the sometimes-incendiary rhetoric which served him well on the campaign trail won’t help him govern. Yet Bolsonaro’s statement also spoke to the idea, expressed by the evangelical Senator Magno Malta shortly before Bolsonaro’s victory speech, that “the Lord anointed Jair Bolsonaro and from this day on, be becomes president of us all…Brazil above everything, and God above all.”

In an early indication of the prevailing skepticism regarding Bolsonaro’s ability to form and lead an administration capable of confronting the mounting fiscal and public security crises, the conservative-leaning daily Estado de S. Paulo described his election as “a leap in the dark” (salto no escuro) in its main editorial the day after the election.

The immediate concern centers on the feasibility of the ambitious economic agenda developed by Paulo Guedes, a Chicago-trained former investment banker. The plan was well received by the Brazilian private sector and the international community, which has often reminded the country’s leaders of the need to open the economy and reduce the nation’s suffocating bureaucracy to attract productive investments. Despite the presence of Guedes, Bolsonaro’s private sector constituency is one with diverging interests, particularly regarding changes in the entrenched protectionist policies that benefit several powerful sectors, in both industry and agriculture. As economist Monica de Bolle stated at the Wilson Center earlier this month:

“Brazil always fluctuates between do we want a more market-led economy [or] do we want a more state-led economy, and we always end up, always, with a more state-led economy….Bottom line, we are going to be facing some very big issues come January 2019 and I think we are running a risk…[of] severe fiscal turbulence, given that these reforms are not going to be put in place.”

An early indication of Bolsonaro’s economic posture could come in the case of the proposed merger of Embraer’s civilian aircraft production division and Boeing. Informed sources say the deal has the support of the leadership at the Brazilian Air Force, which developed Embraer as a state company before it was privatized in the 1990s.

Supporting the Embraer-Boeing deal could also help Bolsonaro in another area: his expressed desire for stronger relations with the United States. After U.S. President Donald Trump called Bolsonaro to express congratulations Sunday night, Bolsonaro told the press that they had a very friendly call. On Monday morning, Trump tweeted that he had “a very good conversation” with Bolsonaro, and that the two countries “will work closely together on Trade, Military and everything else!”

Bolsonaro has also found support from the same right-wing populist groups that supported Trump’s political rise in the United States. Steve Bannon, who played a central role in Trump’s election, told Folha de S. Paulo that Bolsonaro represents the path of “enlightened capitalism” and will lead to a closer relationship between Brazil and the United States. Bannon, who served as a strategic advisor in the White House before Trump fired him last summer, plans to invite Bolsonaro to his “The Movement” summit in January 2019, gathering leaders from around the world who support economic nationalism and the populist-radical right.

However, Bolsonaro’s immediate challenges lie in Brazil’s domestic problems, starting with healing a fractured political scenario. This morning, the defeated Haddad kept the focus on Brazil in wishing his opponent the best:

“President Jair Bolsonaro. I wish you success. Our country deserves the best. I write this message today, with a light heart, with sincerity, so that it encourages the best in us all. Good luck!”

 

 

Source: Wilson Center Brazil Institute, Paulo Sotero, Oct. 29, 2018. Photo credit toAssociated Press.