Photo Jonathan Blair

Friday, October 10, 2014

Brazilian elections: The stakes in Round two may not be what they look like

A campaign marked by a dramatic and unexpected turn ended with one more surprise as also-ran Aecio Neves finished with a solid 33.55% of the vote, twelve points in front of Marina Silva and only eight behind incumbent Dilma Rousseff. These results pave the way for what will likely be the most savagely disputed and hardest to predict election round since Brazil's return to democracy in 1985.

Vote distribution paints a divided country, with the poor North and Northeast coming out massively in support of Rousseff’s Worker’s Party (PT), while the West and Southeast, especially São Paulo, took a strong stand in favour of the opposition. Two important anomalies are worth noting, especially as they happened in the richest and largest electoral colleges of the country. Rousseff prevailed in Minas Gerais (43.5 to 39.8 for Neves) and Fernando Pimentel, the PT candidate for governor, was elected  in the first round, with 53% of the vote. Minas Gerais is an agricultural and industrial powerhouse but also the state where Aecio Neves was elected twice as governor, the state he represents in the Senate, and one where his overwhelming popularity was never in doubt before the campaign. This double victory stands as the PT’s most important gain in the firt round. The party’s collapse in São Paulo, where the party was born and where its core union support is concentrated, represents by contrast its most hurting loss. Aecio Neves’ Brazilian Social Democratic Party (PSDB) cleaned out: in that state, Neves won the presidential contest by an unheard-of margin (44.2 vs 24.8 for Rousseff), Geraldo Alckmin was reelected as governor with 57% of the vote while the PT finished third with barely 18%, and the PSDB’s José Serra crushed the PT’s incumbent, widely-respected 24-year veteran Eduardo Suplicy, in the contest for the lone senate seat at play. Along with Marina Silva’s ability to transfer her vote—most likely to Neves--, what happens in those two states, where a third of Brazilian electors live, could well determine the outcome of the second round. Now, does this matter much, that is, what exactly is at stake in this second round?

For one thing, a contest of personality it won’t be: the debates made clear that Aecio Neves is by far the slicker speaker and that he is much more conversant with the substance of policy debates than the somewhat awkward and at times insecure Dilma Rousseff (she was widely derided for bringing and using a thick briefing book during the last debate). Neither, however, stand for themselves. They are standard bearers for substantive and very different visions of Brazil's future. Above all, however, they embody very different prospects for the consolidation of their country's democracy.

In some way, we have a relatively clear Left/(centre-)Right battle. On one side, the PT stands as a socially progressive party, keen on protecting and expanding the social programs and subsidies that have helped millions of poor Brazilians escape a life of misery, a party committed to using the state apparatus to protect and expand the country's manufacturing sector in the face of market forces and globalization's onslaught. In many of its quarters, there is still a profound admiration for Cuba's socialism and even for Venezuela's Bolivarian experiment. By contrast, Neves' PSDB looks a lot like Canada's Liberals or perhaps better, like Europe's "third way" socialist parties, those pragmatic outfits led by Felipe Gonzalez, Helmut Schmidt and Tony Blair. From that perspective, the market and globalization itself represent unavoidable realities that, far from only presenting impediments for the development of the country, offer instead extraordinary opportunities that a country like Brazil, still plagued by immense human misery, cannot turn down. There is no naive embrace of the market, nor a rejection of the need for robust social program. There is however a clear conviction that to sustain those over the long term and to guarantee sustainable growth, trade and the economy need to be further liberalized, inflation must be kept low, prices "true," and the state made as efficient as possible.

Remarkably, these outlooks have changed very little over the last twenty years, the last twelve with the PT in power, and the previous eight with the PSDB in charge. Even more remarkably, neither project has really succeeded in gaining majority support in Brazilian society. Both were forced instead to take the lead of much broader coalitions, most of whose members shared only part, sometimes minute, of their core agenda. This is not about to change.

After Sunday's vote, the PT and PSDB control respectively 12 and 10 of the 81 seats in the Senate (with respective losses of 1 and 2 seats), and 70 and 54 of the 513 seats of the Chamber of Deputies (with losses of 19 for the PT and a gain of 10 for the PSDB ). With 14 parties in the Senate and 22 in the Chamber, governing coalitions will have to be extremely diverse. In addition, elections in that immense country are horrendously expensive, and the parties need lots of money to be competitive. To get elected, and then to govern, in sum, massive compromises and complex dealings are in order, and the results are not pretty.

The PT has governed with the help of some of the most corrupt politicians in Brazil's recent history. The best known was probably José Sarney, former President of the country--elected by indirect suffrage--, long-time and recent President of the federal Senate, and the patriarch of an immensely rich and corrupt clan that has governed and controlled Maranhao, one of Brazil's poorest states, for decades. The clan's candidate for governor of the state, Lobao Filho, was just soundly defeated, but to the very end, in this land of misery, he enjoyed the PT's support. Renan Calheiros is another case: long time senator for the small and poor Northeastern state of Alagoas, he was forced to resign as President of the Senate in the face of massive accusations of corruption but was absolved by his colleagues, with support from the PT, and regained his position, which he will probably keep in the new Congress if Rousseff is re-elected. Also the head of an oligarchical clan, he has just seen his son, Renan Filho, become governor of Alagoas, at the head of a coalition that included the PT. Both Sarney and Calheiros were also elected with PT support in their home states, but even with these "allies," the PT felt the need to buy-off smaller parties legislators through monthly cash payment a scheme that led two of Lula's closest collaborators to prison.

Getting the right people elected, beginning with the party's presidential candidate, costs lots of money, a major challenge for a workers and middle-class party whose main electoral support lies among the poor; hence the need to reach beyond natural allies to the deep pockets of the country's largest corporations.

Brazil has remarkably liberal rules regarding the financing of political parties, with no limits to private or corporate contributions. At the same time, however, parties are required to declare the name of the contributors and the amount of their gift to the party, all information that the Supreme Electoral Tribunal makes public through its web site,  progressively over the course of the campaign, and in full shortly after.

A look at the data already made public is eye opening. According to the latest electoral accounts, Dilma Roussef has received 123,307,942 Reais (or $C 57,584,808) in private electoral contributions. Of that amount, 99.59% involved donations of $R 100,000 or more. Some of the contributions, from several of Brazil's largest private corporations, are staggering. OAS and Andrade Gutierrez, two engineering firms heavily engaged in government-financed infrastructure projects, from stadiums for the World Cup, to port infrastructure and oil refineries, have respectively contributed $R 20 and $11 million. JBS-Friboi, the world's largest food processing company, and the recipient huge loans from the Brazil's government-controlled development bank (the BNDES) has for its part given $R14.5 million to Dilma Rousseff's campaign for president. These three companies, clear beneficiaries of government contracts and subsidies, have in sum contributed until now more than R$ 45 million (or about $ 21 million canadian), to support her re-election.

Leaving aside the very obvious ethical and political issues raised by such dealings and those involving the above-mentioned 'articulations' with parties in the Congress, it should be quite clear that neat the Left--Centre-Right distinction outlined above does not quite do justice to the game being played in the second round of the Brazilian elections.

The complexities, ambiguities and obscurities of what Brazilians call "political articulation" were not absent from the PSDB years. José Sarney and his cohort were in fact important allies of Fernando Henrique Cardoso's government and they certainly did not provide their support for free. A few scandals came to light, but none leading to prison terms or to the transparent absolution of criminal activities that benefited the likes of Renan Calheiros under PT rule. Still, it is possible that many of the dealings simply did not come to light and other tools, such as executive nominations to government ministries and state corporations, were quite openly used--as they were by the PT--to advance the government's agenda. Similarly, the electoral accounts of Aecio Neves are also very interesting. He has received until now more than $R40 million in private donations, 80% of which larger than R$100,000 or more. The name of the many of his donours are still not public but the three most generous ones (at $R2 million each) are the country's largest bank, Itau, and two large engineering firms, Odebrech and OAS (both of which also contributed larger amounts to Rousseff's campaign). Moreover, the campaign is still on and Neves’ chances did not look good after Marina Silva entered the race. The accounts are far from closed, in other words.

What all this illustrate is that beyond clear social and economic outlooks, a slight but perhaps more fundamental rearrangement of the Brazilian state may be at stake in the second round. On one side, the consolidation of a system in which a few large corporations and political cliques work tightly with the government, keeping it in power in exchange for local prominence, protection from prosecution, patronage and massive contracts and subsidies. Fernando Henrique Cardoso, partial to the candidate of the party he helped to found, but still a social scientist, probably put it best when he called the resulting contraption "state capitalism." Such arrangements are meant primarily to perpetuate the PT’s hold on executive power and they may well be compatible with the maintenance and even deepening of social programs for the poor, for a while at least. Above all, however, the pact they imply between the party in power and the country’s largest corporations augur poorly for the consolidation of democratic governance in the country.

Given the constraints imposed by Brazil's peculiar political system, the opposition cannot and would not promise a radical change. This was the illusion entertained by Marina Silva and now discarded by the electorate. Aecio Neves, far from an angel, is a consummate politician who has been elected three times in the country's second largest electoral college. Much of the private sector--though by no means all, as we saw--and all the major media, will line up behind him, in many cases less in support of his agenda than in opposition to the PT's, which remains a left-wing party with profound ideological roots and where social movements remain a force. In the end, in other words, the PT may not be the most reliable ally of capitalist firms, the size of their financial support notwithstanding. Several centrist and right-wing parties currently supporting the government have in fact suggested that they would gladly switch side, and, clearly, they will be welcome. Neves is not known to have ever turned down private sector contributions, and his party has muddled through expertly and for years in the dirty fields where policy is made in Brazil. For now, however, he owes much less than Rousseff to the powers that be in the Brazilian economy and in Congress. Moreover, his program, which favours liberalization and a degree of restraint for the government, implies lesser space for the political engineering that a statist PT in power has built with its allies, political and private alike.

The stakes in sum, are mostly political, and they have to do with the protracted consolidation of Brazilian democracy. In a slow process that began in the early 1980s with mass demonstrations in favour of the direct election of the president, the election of Lula in 2002 was a huge breath of fresh air and certainly the biggest step forward. Paradoxically, the reelection of his heir, Dilma Rousseff, could well be the first major step back in the process. The signs are many, in other words, that the Right-Left image is more caricature than reality.

[Published on  as “The stakes in Brazil’s final election” vote]