Second Round

Latin America's largest economy faces an unexpected run-off vote on Sunday (29 October) between President Luiz Inácio Lula da Silva and Geraldo Alckmin of the main opposition party the PSDB. Polls released in the weeks preceding the first-round vote had indicated that Lula was within reach of an outright victory on 1 October, but the late emergence of another political scandal implicating the ruling PT caused his popularity to slip. The final results showed President Lula with 48.61% of the vote, giving him a 7% lead over the former governor of São Paulo, who came in second place with 41.64% of the vote.

Polls ahead of the second-round vote put Lula firmly in the lead. A CNT/Sensus poll released yesterday gave Lula 63.2% of the valid vote (excluding blank, null, and undecided votes) against 36.8% for Alckmin. The poll was conducted between 23 and 25 October. Meanwhile, a Vox Populi survey published yesterday by Carta Capital gave Lula a 22% lead over Alckmin. Lula had 61% of the valid vote compared with 39% for Alckmin. The poll conducted between 23 and 24 October had the same results as an earlier survey by the same agency released on 19 October. Both candidates closed their campaign on Wednesday.

The Candidates

• Luiz Inácio Lula da Silva was elected president in the second round of the 2002 presidential elections with 52.79 million valid votes, after three failed bids for the presidency. He took office in January 2003. A former leader of a metalworkers’ union who gained notoriety for organising strikes against the military dictatorship during the late 1970s and early 1980s, Lula was a founder of the PT and in 1986 was elected federal deputy for the first time. He has undergone a dramatic transformation from a left-wing firebrand to a moderate social democrat, who has won the praise of the financial markets with the implementation of orthodox macro-economic policies and modest structural reforms. At the same time, he has retained his image as a man of the people, frequently alluding to his humble origins to demonstrate his ability to identify with the poor. Despite real achievements in terms of increasing economic and financial stability, the second-half of Lula's first administration has been tainted by a succession of political scandals that have lost Lula his closest allies including his former Chief of Staff José Dirceu and Finance Minister Antonio Palocci, as well as the former board of directors of the ruling Worker's Party.
  
• Geraldo Alckmin took over the role of governor of Brazil's richest state in 2001 following the death of the popular former governor Mario Covas. He was then elected to the post in 2002. A devout Catholic Alckmin studied medicine at university, but has spent his working life in politics. In terms of political leanings he is considered to be more market friendly than his main rival for the post of PSDB presidential candidate José Serra, who was the preferred choice of many within the PSDB. The less charismatic Alckmin's nickname “picolé de chuchu” or “tasteless vegetable on a stick” says a lot about the PSDB candidate, who is regarded as a competent administrator, but without the personal touch of Lula. His campaign is also thought to have suffered as a result of him being a relatively unknown figure outside of the state of São Paulo.

Outlook and Implications

Lula's failure to win an outright victory in the first round will have come as a surprise to his campaign advisors, but the tactics employed over the past few weeks show that some lessons have been learnt. Lula was accused by some of arrogance over his failure to attend any of the TV debates with rival candidates prior to the first round. In contrast, in the second-round campaign, he has attended a number of debates with Alckmin. Lula's closing campaign speech in which he admitted that the PT had made grave mistakes also demonstrated more humility. Lula's campaign ahead of the second round has also focused on the record of the former government of Fernando Henrique Cardoso, insinuating that Alckmin has a hidden agenda on privatisation.

Lula's continued popular appeal despite the corruption scandals that have rocked his government is thanks largely to the economy's performance. Despite disappointing growth, lower inflation, and a higher minimum wage have increased the purchasing power of the poor. In addition, cash transfers under the Bolsa Família programme, which now reaches 11.1 million families, have provided a lifeline to many struggling to meet their basic needs. The results of the first-round vote showed support for Lula to be highest in areas with the lowest human development index and support for Alckmin higher in richer parts of the country.

Meanwhile, the convergence of economic policy between the PT and the PSDB means that Alckmin has failed to present himself as a viable alternative, while his anti-corruption discourse has not significantly dented support for Lula.

However, if Lula does win a second term there will be many challenges ahead. The PT did not do as badly as initially anticipated, but Lula will still need to gain the support of other parties to build the congressional majority needed to govern effectively. Meanwhile, the performance of the right-wing Liberal Front Party (PFL) in the Senate elections and the PSDB victories in the gubernatorial elections for the key states of São Paulo and Minas Gerais shows the need for improved relations with the opposition parties.

Contact: Raul Dary

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raul.dary@globalinsight.com

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