The presidential election campaign, which is running its course at this moment between Dilma Rousseff (actual President of Brazil), the centre-right candidate Aécio Neves (PSDB) and Eduardo Campos from the Socialist Party (PSB), was thrown into jeopardy, when last week a private jet carrying the socialist party candidate, Eduardo Campos, crashed into a residential area near São Paulo on Wednesday.
The deaths of Eduardo Campos and the six other crew and passengers prompted a wave of shock across the country, rapidly followed by speculation about the effect on the presidential election on 5 October.
In piety of his death the political parties decided not to discuss what could and would come hereafter. Yesterday, Sunday, Eduardo Campos’ funeral was attended by thousands of loyalists and political fiends. Now the way is free to discuss what comes.
I will not relate about the tragedy itself, but will try to figure out what will happen in these most important general elections, now the number 3 candidate is tragically thrown out of the race. At the other hand, sorry to say, this occurrence might be beneficial for the country, as it is to be expected that his partner for the vice-presidency, Marina Silva, will step in as the new presidential candidate. More about the consequences and the (in my opinion) benefits in a minute, but first a few words about the importance of these elections.
I don’t have to remind my readers of the street protests in June last year and the unrest since. After 8 years of a central-right government with Fernando Henrique Cardoso as President and the successful turning around of the monetary crisis by the introduction of the Plano Real, Brazil has seen a 12 years reign of the PT (the Workers Party). First 8 years with Lula as President and then 4 years with Dilma Rousseff, who is now up for re-election. In the eyes of many people, particularly the young and educated, twelve years of corruption, stealing, wasteful spending and a lack of improvement in health care, education and public services, is more than enough. It’s obvious that they want the ruling PT kicked out of office.
Note: If you want to know more about the PT, look up the word “petralha” in the dictionary of this website.
With a jumping start of 40 million almost-sure votes, thanks to the social program Bolsa Família, it also was obvious that the two candidates in opposition to Dilma Rousseff did face tremendous problems to push her into a second election cycle.
Note: In Brazil a candidate needs to have 50% or more of the votes. If not a second election cycle is held 14 days later. This is important as coalitions can be made.
But now the situation is upside-down. The tragic death of presidential candidate Eduardo Campos (PSB) launches Marina Silva, his vice on the ticket. Marina joined the PSB last October after failing to create her own party, the Sustainability Network, but carrying a political heritage of 19.6 million votes from the 2010 election, when she was third in the first round.
In political circles, the former senator is seen as a natural successor to Campos, especially due to her performance in the polls on voting intentions. In April, Datafolha placed Marina second in the race with 27%, against 39% for Dilma Rousseff and 16% of Aécio Neves.
In past elections, the disappearance of a third candidate in the polls did not affect investors in assessing the prospects for the country. After all, both the re-election of Lula and Dilma’s victory in 2010, have gone by largely without interest of the owners of the money. But 2014 has been an unusual year. Not only the market rejects re-election of President Dilma Rousseff, but it also responds to strong oscillations to any event involving the government.
Analysts point out, that if Marina enters the election campaign, as a full presidential candidate, she may have a stronger position than Campos would have had. The market sees in Marina a greater chance of overthrowing Dilma and that showed.
The response of the São Paulo stock market BM&FBovespa to the tragedy that befell Campos was emblematic. Amid rumours that the plane was occupied by both the candidate and by his vice, the stock fell about 3% in a matter of thirty minutes. Investors showed apprehension about the possibility of not having a weighty third candidate, which would open up more space for a victory of the PT over Aécio Neves (PSDB) in the first round.
Confirmation of the absence of Marina on the flight made the stock market reduce its losses and operating in the black for a few minutes before returning to retreat, closing down 1.5%.
In the assessment of economist Gesner Oliveira, partner at GO Associados, it is still early to draw precise scenarios, but the strength of a probable candidacy of Marina transforms the electoral game completely.
“The entrance of Marina not only changes the outlook for the first election cycle, but also for the second. Ironically, to become a candidate in circumstances of a national uproar, Marina can strengthen more than if she had been stayed second on the ticket”, he says.
In the evaluation of all analysts polled by news magazine Veja, the candidacy of Marina is much stronger than that of Campos. For João Augusto de Castro Neves, of Eurasia Consultancy, the vice of the PSB has potential, even going to the second election cycle with Dilma Rousseff instead of the PSDB candidate. An unlikely scenario in the case of Eduardo Campos.
“In a hypothetical runoff between Rousseff and Marina, the votes of Aécio will be inherited by Marina, and she will also pick up more votes from the undecided. In the situation of a second cycle with Rousseff and Aécio, Aécio will not inherit many votes from the PSB”, said Castro Neves.
Eurasia reviewed its electoral analysis for Brazil, but it has not yet released if its previous expectation of a victory for Dilma, affirmed in the latest report, will remain.
“The new scenario is much more complex”, says the economist. “There is a discrepancy between the market valuation and voters about the electoral process. Aécio remains the favourite of investors. Marina, if she confirms her candidacy, comes in second place, while Dilma remains the choice to be avoided. The market has a very extreme view of absolute success with Aécio and a total chaos with Dilma. What actually doesn’t have to materialize”, he says.
Despite the preference for Aécio, the market seems to demonstrate apprehension when confronted with the economic beliefs of Marina. Despite ideological conflicts with sectors of the economy, especially the agribusiness, Marina led to the election campaign a heterogeneous team of economists that pleased investors. It is captained by Eduardo Giannetti da Fonseca and André Lara Resende, the latter, one of the creators of the economic reforming plan Plano Real.
“It’s been some time that the market assessment is positive about it. Marina shows a perspective view of renovation and the market has already signalled that it wants change”, said Oliveira from GO Associados. According to the economist, however, the macroeconomic challenges that have emerged along the last years, also known as the ‘cursed legacy’ of Dilma, could overwhelm any government plan. “Given the economic advice of Marina and the challenges that lie ahead, some measures are inevitable for her as well as Dilma and Aécio, in other words how to contain the fiscal deterioration, the adjustment of rates and the regaining of the confidence of the private sector”.
Marina has ten days with the Superior Electoral Court (TSE) to protocol replacing Eduardo Campos. Until then, at least two studies will be published pointing voting intentions in a hypothetical situation of Marina as presidential candidate. Her potential to define the election may be noted, especially in the Southeast, especially in São Paulo and Rio de Janeiro, where she had above average performance in the elections of 2010. According to Rafael Cortez of Tendências, this is a point of attention for the PSDB, since, even in the first election cycle, Marina could garner votes from both candidates Rousseff and Aécio. “She has an important base of voters in Minas Gerais. And this is the home-state of Aécio, where he is strongest. If she can draw votes from Dilma, she certainly also represents a risk to the opposition”.
So, it looks simple for the PSB. Take Marina as successor to Eduardo Campos and have a chance of winning the presidential elections. But reality is a bit more complicated. The PSB had to make (like all other political parties in Brazil) alliances one with the other. There are some 25 parties in the race and no one is strong or large enough to rule the game. Furthermore originally Marina isn’t from the PSB. The PSB took her in for the 20 million votes she represents and now some of them feel they sit with a cuckoo in their nest.
Whatever the feelings, the PSB would be stupid not to accept Marina as their presidential candidate as she is the one and only who can beat Dilma and the PT.
And the first poll after the tragedy with Eduardo Campos, presented this Monday (18 Aug), already shows her power. Marina Silva, chosen as successor to Eduardo Campos, enters the race as a presidential candidate a close second. In the vote, the president and candidate for re-election, Dilma Rousseff (PT), registers 36%, Marina (PSB) has 21% and Aécio Neves (PSDB) 20%.
For the second cycle, Marina would be ahead of Dilma in a numerical evaluation, since it would involve 47% of the votes against 43% for Dilma. The technical tie is considered based on the margin of error, which can be two percentage points more or less.
According to the evaluation of the daily newspaper Folha de São Paulo, determining the next president in the first election cycle will not be possible given the rapid developments in support for the PSB, which now registers almost triple the votes while opponents remain unchanged.
The study showed one more remarkable fact. With the rise of Marina, the rate of invalid votes or blank decreased from 13% to 8% and the undecided went from 14% to 9%.