THE LAUNCHING OF THE PRESIDENTIAL CAMPAIGN AND THE RISKS OF SOCIOECONOMIC INSTABILITY

General elections are scheduled to be held on 2 October, 2022, to elect the President, Vice President, and members of the National Congress. Elections for state Governors and Vice Governors will be held at the same time.

The president is elected to a four-year term by absolute majority vote through a two-round system. The National Congress (Congresso Nacional) has two chambers. The Chamber of Deputies (Câmara dos Deputados) has 513 members, elected to a four-year term by proportional representation. The Federal Senate (Senado Federal) has 81 members, elected to an eight-year term, with elections every four years for alternatively one-third and two-thirds of the seats.

The elected candidates will start their duty on the 1 January 2023.

2022 National Electoral Calendar

THE FIRST CANDIDATES ARE ANNOUNCED

The calendar issued by the Superior Electoral Court (TSE) provides for the period between 20 July and 5 August for the realization of party conventions. These conventions aim to deliberate on coalitions and to choose candidates for president and vice president. After the convention, the party can register the candidacy at the TSE, which is the last step for the candidate to become official.

The main candidates, according to the polls, have already made official their candidacies: Ciro Gomes, from the Partido Democrático Trabalhista (PDT), on the 20 July; former president Luiz Inácio Lula da Silva, from the Partido dos Trabalhadores (PT), on the 21; President Jair Bolsonaro, from the Partido Liberal (PL), kickstarted his re-election effort on the 24; and finally, Simone Tebet, from the Movimento Democrático Brasileiro (MDB), formerly Partido do Movimento Democrático Brasileiro (PMDB), was confirmed on the 27_.

Most of the remaining candidates, who should not be present at the second round, were also confirmed in July: Leonardo Péricles, from Unidade Popular; Sofia Manzano, from Partido Comunista Brasileiro (PCB); Luiz Felipe D’Ávila, from Novo; Pablo Marçal, from Partido Republicano da Ordem Social (Pros); José Eymael, from Democracia Cristã; Vera Lúcia, from Partido Socialista dos Trabalhadores Unificado (PSTU); Roberto Jefferson, from Partido Trabalhista Brasileiro (PTB). Luciano Bivar, from União Brasil, gave up and Soraya Thronicke replaced him. Federal deputy André Janones (Avante) withdrew his candidacy and now supports Lula. Changes in the party leadership led to the withdrawal of Pablo Marçal‘s candidacy (Pros).

THE MAIN CANDIDATES AND THE FIGHT FOR VOTES

Following the confirmation of the main candidates, political campaigns should intensify. According to media sources, the politicians leading the pools already have well-defined strategies to overcome resistance points and attract voters who reject them or who do not know them.

Regarding President Bolsonaro’s re-election campaign, the biggest problem is his rejection among women, 57% of this group would not vote for Bolsonaro at all, according to a survey from Datafolha Institute. Thus, there is a strategy to soften his image showing him in quiet moments with his family, especially the first lady, Michelle Bolsonaro. Another important audience for the President’s campaign is young people. Datafolha survey showed that among people aged 16 to 24, Bolsonaro’s rejection reaches 63%. To reverse these numbers, on the president’s social networks, the strategy has been to use mockery against opponents, with memes and a less serious tone. The low-income population, where former president Lula reaches 57% of voting intentions against 20% for Bolsonaro, is also fiercely targeted. To reduce this difference, the President expanded the dissemination of social programs such as the Auxílio Emergencial and the Auxílio Brasil. Added to this, Bolsonaro maintains the speech that he had an atypical mandate, due to the COVID-19 pandemic and he also blames the war in Ukraine for the crisis in Brazil.

For its turn, former president Lula’s campaign tries to take the focus off the corruption scandals from his former mandates, which are exploited by opponents, and to focus on the economy. The plan is to bring a comparison between the situation during his two terms and the country’s current condition. Four years ago, 70 percent of evangelical Protestant Brazilians voted for President Jair Bolsonaro; Luiz Inácio Lula da Silva is courting this voting bloc and consequently avoid commenting on topics considered controversial, such as the topic of abortion. A public that the former president is concerned with is the business community, in this layer he has a strong rejection and loses to the current president (56% intend to vote for Bolsonaro against 23% who declare a vote for Lula). Consequently, he seeks to meet with businessmen to discuss an agenda that could increase his popularity among them. Campaign advisers also want him to avoid bringing former president Dilma Rousseff into his government, as she left the presidency with 70% of disapproval.

Trying to establish themselves as a viable third way, Simone Tebet and Ciro Gomes seek to show that their candidacies are strong enough to break the polarization between the supporters of Bolsonaro and Lula. Third place in the polls, Ciro Gomes tries to change two important traits of his political persona: his explosive temper, by transforming it into indignation with the current situation in the country and, the difficulty in creating agreements with other left parties, which mostly supports Lula. Ciro is trying to attract young audiences through online content as well. The challenge for Simone Tebet, the only woman representing one of the main parties, is to be known nationally. According to a Datafolha, only 29% of voters know Tebet, while 99% know Lula and 98% know Bolsonaro.

THE PRESIDENTIAL RUN AND THE RISKS FOR THE ECONOMY

The Brazilian presidential election will take place within an economically complicated moment not only for Brazil, but for most countries in Latin America. The region is now dealing with bad economic situation, and after two years of health crisis, societies have been impoverished, growth was put on hold and inflation rises. In addition, the War in Ukraine is making the situation even worse, raising prices of commodities, and favouring exports to the detriment of internal consumption, and generating a large impact on the basic goods such as food and fuel. According to experts, this scenario of economic dissatisfaction increases the likelihood of social unrest, with protests and strikes against governments, producing social and political crises that may spread across the continent.

Brazil currently has one of the highest inflations in the world – behind only Turkey, Argentina, and Russia – in the last 12 months inflation has accumulated a 11.73% increase. This is the worst figure since May 2003, when the index reached 17.24%. Political commentators affirm that the fear of a negative impact on his popularity in the election period, particularly among the low-income classes, drove President Bolsonaro to support measures that can deal with the loss of buying power.

One of these measures is the Proposed Constitutional Amendment (PEC) that created and improved a series of social benefits, nicknamed PEC Kamikaze. The PEC institutes a national state of emergency to bypass the ban on creating benefits in an election year. With this, it is possible to increase the value of Auxílio Brasil from R$400 to R$600, to give truck drivers an aid of R$1,000 and taxi drivers an aid of R$200 until the end of the year. In addition to an increase in the value of the gas voucher up to R$120 every two months. The PEC also includes a transfer of R$2.5 billion to maintain free public transport for the elderly and R$3.8 billion to subsidize ethanol.

The sum of R$41.2 billion in social benefits raises fears of a “rebound effect” in Brazilian inflation. In practice, analysts say that the proposal leaves the management of the country’s public accounts more confused, which could lead to a scenario already faced by Brazil in other occasions. There may be a worsening of international investors’ risk perception with the Brazilian economy, leading to a devaluation of the local currency, which has the potential to provoke further inflation. Another issue that researchers agree on is that the PEC will create a problem for the next government considering that it will be very difficult to resist pressures to make the benefits permanent but there are no fix sources to pay them.

PERSPECTIVES

For 2023 the estimates are not encouraging. Inflation should break the target and stay close to 5.09%. Much influenced by PEC Kamikaze’s expenditures – R$41 billion – which will be paid for by the next government. Analysts point out that the main challenge that the next president will face in the coming years is the combination of recession or low growth and high inflation.

According to a survey published by Datafolha, 53% of Brazilians say that the economy will have a lot of influence on their electoral choice. This helps to understand the importance that the economy has for the political stability of a country. It was a scenario like the current one that took millions of Brazilians to the streets in June 2013 following increase of public transports’ price, under the motto “it’s not just for 20 cents!”.

Social movements, with street protests and, in some cases, overthrow in government, are already spreading within other countries of the region. In Argentina, for example, where the inflation rate exceeds 60%, protests have been taking place, taking thousands of people to the streets and leading to the resignation of the Economy Minister in July. Ecuador registered several protests led by the Confederation of Indigenous Nationalities of Ecuador (Conaie). Protests were violent with military convoys and embassies attacked; roadblocks, as well as tolls were set up by demonstrators to control traffic in large cities. An agreement between Guillermo Lasso’s government and the movement’s leadership ended the protests, with the promise of a reduction in fuel prices, fertilizer subsidies and the overthrow of a decree that expanded oil extraction projects in preserved areas.

In Panama, protests have been gradually spreading throughout the country for the last weeks. Price increases, along with growing inequality over the past several years, has triggered one of the largest mobilizations the country has seen in several decades.