From the “Nirvana” to “Lula light”: how is going to be Brazil post-election?

In few hours, Brazil will decide who is going to be the thirty-seventh President of the Republic. If there are no surprises, the first round of elections will not deliver to the country a new guide, it must wait for the second one.

The candidates that remain strong are the usual three: Dilma Rousseff, President and member of the PT (Workers’ Party); Marina Silva of the PSB (Brazil’s Socialist Party), which took place after the tragic death of Eduardo Campos on August 13th; and Aécio Neves of the PSDB (Brazil’s Social-Democratic Party). It was an unusual election campaign, in which the emotions and surprises have broke, more than once, the apparent balance.

In the past few weeks, for example, the predominant position of Rousseff has come back strongly. The president was able to take away part of the voting intentions from Silva for herself. But it was also a time of rebirth for Neves, supported by a traditional party and better organized than the PSB. In the five weeks following the death of Eduardo Campos, previously designated as the chosen candidate of PSB for the Presidency, the election campaign was marked by two major movements: the rise of Marina Silva, who almost achieved the possible victory in the first round, and the comeback of Rousseff and Neves, against the same Silva. The latest poll from Datafolha (October 2), an institute belonging to Folha’s Group, reported that Dilma Rousseff has 40% of voting intentions; Marina Silva has 24%, and Aécio Neves, 21%. On August 29th, the candidate of the PT and the one of the PSB had each 34%, while the PSDB had 15%.

In the latest survey carried out by Vox Populi-Charter Capital, which are very close to Dilma, the President would receive 38% of the votes, Marina Silva 25% and Aécio Neves 17%. According to analysts, 10% of Brazilians are still highly uncertain. Since the possibility (not quite sure) that Marina Silva and Dilma Rousseff dispute the second round, Mauro Leos – senior analyst at Moody’s and responsible for the rating of Brazil – has drawn four possible scenarios post-election. The first one is called “the edge of Nirvana” and provides the victory of Marina Silva, the ex-senator able to live up to 80-90% of the promises. The second is defined as “the great disappointment”, with the same candidate capable of performing only 50% of her program. The third scenario is the “light Lula” a situation in which Dilma Rousseff, confirmed in Brasilia again, would be forced to make choices which are more favorable to markets, improving the transparency of her own administration. The worst possible scenario involves the re-election of Rousseff and few changes in the government team and same strategies. Leos define it as “worse than usual”.

The felling between the PT and the markets has never been the best, far from it actually. Data confirmed by the fall of Ibovespa, the main local index, that coincided with the recovery of Rousseff in the polls. On the day of publication, the index fell 4.52%, falling that was not seen since September 22nd, 2011. At the moment, however, the predictions are short-term: “Whether is going to be Dilma or Marina – has affirmed Leos during a conference sponsored by Moody’s in Sao Paolo – the scenario will be defined only after the elections, and it will depend on public pressure for change”. Also alliances and the position of the Conservative Neves are going to be decisive.