Update: We wanted to provide a short update on the results of the election. As expected, Bolsonaro won the most votes, though not enough to win outright, though he came surprsingly close. Despite there being a small fine for not voting in Brazil, almost a third of voters either didn't vote in the last round of the elections or cast blank or null ballots. The low turnout may give Bolsonaro an edge, or if those voters decide they don't like Bolsonaro and come back to the polls it could be a win for Haddad. The run-off election between Bolsonaro and Haddad is scheduled for October 28. We'll be keeping a close eye on things to be sure we can provide the best advice for our clients.
Brazil’s Presidential election is fast approaching, and who the ultimate winner will be is still an open question. The first round of voting happens on October 5th 2018, but the field keeps changing. The most popular candidate, Luiz Inacio Lula da Silva of the Workers Party (PT), who was running from a jail cell after receiving a 12 year sentence for corruption, withdrew from the election last Tuesday. He had been declared ineligible to run by the country’s top electoral board two weeks earlier. He named is running mate Fernando Haddad as his successor on the ballot.
While we can’t predict who will win the election, we can help our clients plan for different possibilities. Smith Brandon International has extensive experience working in Brazil. We know that despite the unpredictability of the upcoming elections, Brazil will likely remain a huge potential opportunity for businesses. We follow developments there quite closely, so we can provide the best advice and help to our clients. Read on for more information on the upcoming election.
The same corruption scandal and investigation that brought down Lula, Operation Car Wash (which we have written about numerous times here on the blog), has also brought down numerous other politicians and has resulted in most of the major party candidates, including Haddad, polling at low numbers.
Currently the front runner is far-right candidate Jair Bolsonaro, of the Social Liberal Party (PSC) who is polling between 24 and 28 percent depending on the poll. But he was recently stabbed in the abdomen at a campaign event, and may not be able to do much campaigning between now and the election, though so far this hasn’t changed his polling significantly. His closest rivals appear to be Haddad, who is polling between 13 and 19 percent, and Ciro Gomes of the Democratic Labor Party (PDT), who is polling between 11 and 13 percent.
Though he is the front runner, no candidate is likely to get enough votes to win the election in the first round, so a run-off election is expected. After numerous controversial remarks from Bolsonaro about women, racial minorities, and the LGBT community, many voters have indicated that they would never vote for him, regardless of who his opponent is. A number of analysts believe he is unlikely to win a run-off election.
The Washington Post recently published an article about how women may be the key to who ultimately wins the election. Women outnumber men in Brazil by about 7 million, and polls have found that a large portion of women in Brazil are still undecided, though Bolsonaro is generally unpopular with women. It is very difficult to predict who will ultimately come out on top after run-off elections.
All the uncertainty about the election has led to volatility in the Brazilian markets, with more predicted as the election nears, and possibly beyond. Were Bolsonaro to win he would likely try to implement business friendly policies, but many believe the political chaos that would follow a Bolsonaro win would make it difficult for him to successfully implement those policies. Other business-friendly, but more centrist candidates are polling poorly at the moment.
Meanwhile some businesses hoping for economic reforms worry about a win by Haddad, who’s party, the leftist-populist Workers Party (or PT), is distrusted by many businesses.
Ciro Gomes, has also recently moved up in the polls. Although is he is seen as more of a moderate than Haddad many business people feel his policies would not be very business friendly either.