Financial Times – Brazil’s electoral race no dog and pony show

Joe Leahy SEPTEMBER 5, 2014 

When Brazil’s presidential election circus arrived in Rio Grande do Sul this week, it was hard not to see the difference between the styles of the two leading candidates.

Marina Silva, the upstart environmentalist who has suddenly taken the lead in the polls, staged what was almost a stealth visit. On Thursday, she arrived at Expointer 2014, a large agricultural fair on the edge of the state capital Porto Alegre, in a van ,and held tough closed-door meetings with her erstwhile adversaries in the rural sector.

After the talks, in which she guaranteed large landowners that she would respect the constitution when dealing with conflicts ranging from the environment to indigenous rights, she gave a hard-hitting press conference. She spared no one, from her opponents to the media, which she said had inaccurately represented her stance on genetically modified crops to make it look more extreme.

By contrast, incumbent President Dilma Rousseff’s was a high-profile show of force, more presidential than campaign-like. She presided over a carefully organized agricultural presentation in which Rio Grande do Sul’s finest horses and horsemen, rams and bulls were paraded.

Scores of speeches were given, with each speaker greeting the dozens of ministers, secretaries and other dignitaries present by name. Then she boarded a golf cart and toured the giant fair, this time appearing more like Dilma the candidate than Dilma the president as a small group of supporters chased her around cheering her name.

Ms Rousseff exuded confidence. She was after all visiting the state where she started out in politics.

But the events of the week show that she is also aware that it will take more than a dog and pony show to keep her bid for a second term on track.

While she was attending the presentation, the market was absorbing the news that an old enemy of her administration, inflation, was rearing its ugly head again.

In the 12 months ended August 31, prices rose slightly above the top of the central bank’s target range of 4.5 per cent plus or minus 2 percentage points. This comes after the economy slipped into technical recession in the first half.

This sort of economic performance would be enough to topple a government in many other countries. But the ordinary Brazilian seems to be oblivious to the macro-economic figures because of low unemployment. Ms Rousseff in her electoral ads has been denying there is a recession, pointing to the low jobless rate.

But even her customary resilience in the face of the country’s long-running disappointing economic performance finally seems to be giving way. This week, she said she might change her economic policies and team if she wins a second term. She gave no details. But most took this to mean her unflappable finance minister, Guido Mantega, might be dumped. Rumoured potential replacements include Otaviano Canuto, secretary for international affairs at the finance ministry, or Nelson Barbosa, a former finance secretary.

The reputed changes are unlikely to excite markets much. Indeed, Ms Rousseff’s campaign has contained little so far for investors. After all, the people whose votes she needs next month do not work along the golden kilometre of São Paulo’s Faria Lima financial district.

She is probably hoping there will be time to win investors back next year, when the hard work of trying to cure Brazil’s sick economy begins.

For now, she will continue to play down the economy and focus on Brazil’s social advances over the past 12 years under governments led by her Workers’ party.