Brazil Divided by Lula and Bolsonaro, Chaos Ensues Regardless of Who Wins [Global Focus]

Brazil Presidential Election Runoff D-5

[Asia Economy Reporter Park Byung-hee] The runoff election for the presidential race in Brazil, South America's economic powerhouse, is just five days away. Contrary to initial expectations, the runoff is showing a tight race. In the first round of voting on the 2nd (local time), incumbent President Jair Bolsonaro recorded a higher-than-expected vote share of 43.2%, continuing his upward momentum. Bolsonaro has narrowed the gap with former President Luiz In?cio Lula da Silva, who led the first round with 48.4%, to within the margin of error. Nevertheless, local observers cautiously predict a victory for former President Lula.

Due to the extreme division revealed by the election results, political turmoil is expected to continue after the election. Bolsonaro, who admires former U.S. President Donald Trump, has raised the possibility of electronic voting manipulation and has hinted multiple times that he may reject the election results if he loses. The ongoing challenges of COVID-19 and the Ukraine war also contribute to a difficult economic situation, which is expected to burden the next government.

"Satanism" vs "Genocide"

Brazil's Superior Electoral Court (TSE) decided to halt all online political advertisements 48 hours before the runoff vote. This decision was made because the possibility of a close election result increased, and both sides' smear campaigns were deemed to have crossed the line.

President Bolsonaro has attacked former President Lula with harsh terms such as "devil" and "satanism." Lula even issued a statement on his social media, denying ever having made deals or had conversations with the devil.

Lula's camp has responded with equally harsh accusations. They pointed out that 780,000 Brazilians lost their lives to COVID-19 due to Bolsonaro's flawed pandemic policies, labeling it as "genocide." Bolsonaro refused COVID-19 vaccinations, complicating pandemic control efforts. He also sparked controversy by claiming on social media that receiving the COVID-19 vaccine increases the risk of contracting AIDS.

As the competition intensifies, extreme incidents have occurred. On the 9th, in Mato Grosso state, a man in his 20s who supports Bolsonaro stabbed and killed a man in his 40s who supported Lula. Bolsonaro himself was stabbed in the abdomen by an assailant during his 2018 presidential campaign. Both Lula and Bolsonaro are known to wear bulletproof vests in public appearances.

As the gap in support narrows, the smear campaigns have heated up further. A poll released on the 19th by Brazilian polling firm Datafolha showed the support gap was only 4 percentage points.

The British daily The Guardian described the Brazilian runoff as "A clash of two Brazils," pointing out that the presidential election is heading toward severe division.

Felipe Nunes, CEO of Brazilian polling firm Quest, explained, "Brazil is experiencing complete division," adding, "This election is not simply a contest between two candidates but a clash between two worldviews unprecedented in Brazilian history." He explained that the poor, Black people, women, and Catholics tend to support Lula, while the wealthy, white people, men, and evangelical Christians tend to support Bolsonaro.

Nunes said, "The number of voters fearing Lula's third term is slightly less than those fearing Bolsonaro's re-election," indicating Lula holds a narrow lead.

‘Post-election Rejection and Economic Hardship’ Likely to Cause Continued Turmoil

Post-election turmoil is expected to be inevitable. Bolsonaro has repeatedly expressed his intention to reject the election results if he loses, showing behavior similar to Trump. He even stated during his presidential campaign that only God can remove him from office.

The global economy facing recession risks is also bad news for the next government. The Economist pointed out on the 20th that Brazil's next president will face large and complex challenges, noting that Brazil's economy has lost its way.

On the surface, Brazil's current economic situation is not bad. Despite strong tightening measures by the U.S. Federal Reserve this year causing major currencies to weaken against the dollar, the Brazilian real has risen more than 8% against the dollar. The Bovespa Index of the S?o Paulo Stock Exchange has also risen over 14% this year. Brazil's consumer price inflation peaked at 12.1% in April and has since declined to 7.2% in September.

However, Brazil's GDP ranking, which rose to 6th in the world during Lula's presidency, has now fallen to 12th. The Economist pointed out the contraction of Brazil's manufacturing sector, noting that the Mercedes-Benz plant on the outskirts of S?o Paulo plans to cut half of its 7,400 workforce, and that Ford and Toyota have previously closed their Brazilian factories.

The manufacturing sector's share of GDP, which was 26% in 1993, dropped to 15% in 2004 and now barely maintains around 10%. Meanwhile, agriculture accounts for 28%. Brazil's average annual agricultural productivity growth rate is 3%, but manufacturing productivity growth is 0%. The Economist noted that Brazil's average annual economic growth rate over the past decade was only 0.3%.

In August, the United Nations released the Hunger Map, reclassifying Brazil as a hunger crisis country for the first time in eight years. The UN includes countries on the hunger map if more than 2.5% of the population faces chronic food shortages. Brazil's chronic hunger rate currently stands at 4.1%.

Lula, aiming to return to the presidency after 12 years, appeals to voters to remember the prosperous times during his previous terms. From 2003 to 2010, Brazil's average annual economic growth rate exceeded 4%, unemployment was halved, and inflation and public debt decreased. However, during Lula's tenure, the commodity market was booming, and the U.S. was lowering interest rates to stimulate the economy. Now, with the U.S. tightening monetary policy, the environment is completely different, making it difficult to expect the same boom if Lula returns to power.

If Lula Wins, ‘Second Pink Tide’ Will Be Completed

For the same reasons, the second Pink Tide is expected to struggle to wield the same influence as before. The Pink Tide refers to the wave of moderate socialist left-wing governments that took power in South American countries from the late 1990s to the early 2000s. After a decline, left-wing governments have recently returned to power in Mexico, Argentina, Peru, Chile, Colombia, and others, sparking a second wave.

Some analysts say that if Lula wins, all six major South American countries will have left-wing governments, completing the second Pink Tide. However, due to the combination of U.S. interest rate hikes and geopolitical instability, governments lack fiscal space, making it difficult for left-wing governments to gain popularity as before. Therefore, the second Pink Tide is expected to be shorter-lived than the first.

This content was produced with the assistance of AI translation services.