As the Brazilian Economy Slips Into Recession, Voters May Opt for Free-Market Solutions

8/11/2019 As the Brazilian Economy Slips Into Recession, Voters May Opt for Free-Market Solutions

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As the Brazilian economy slips into recession, voters may opt

for free-market solutions

By Roger F. Noriega

September 5, 2014

Signs of economic stagnation and simmering popular dissatisfaction in Brazil could not have

come at a worse time for President Dilma Rousseff, who is seeking reelection in October.

According to midsummer polls, voters skepticism about her track record and statist platform

appeared to open the door to a challenge from probusiness candidate Acio Neves.

Political maverick Marina Silva, who took up the Socialist Party (PSB) banner in August upon

the tragic death of her running mate, Eduardo Campos, shook up the race by attracting support

from previously undecided and disinterested voters. As a result, Rousseff is even less likely to

Key Points

News of recession in Brazil and skepticism about President Dilma Rousseffs

track record and platform threaten RousseffsOctober reelection chances.

In the first round of voting on October 5, Brazilians will decide whether maverick

environmentalist Marina Silva or establishment opposition governor Acio Neves

da Cunhaboth of whom offer free-market policieswill face Rousseff in an

October 26 runoff.

Brazilians will likely support the candidate most likely to spur economic growth

and unlock Brazils productivity and wealthmeaning the stability and prosperityof a natural US partner are at stake.


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win a majority of the vote on October 5, and Neves and Silva are battling for second place and

the right to face the president in an October 26 runoff.

The outcome of the election in South Americas most populous country and largest economy will

hinge on whether Rousseff is able to convince anxious Brazilians that more of the same is less

risky than the alternatives offered by candidates on her political left and right. Given the

economic doldrums facing Brazil, voters will probably base their decision on who is most likely

to jumpstart economic growth and unlock their countrys productivity and wealth. The stability

and prosperity of a natural US partner and potential global player are at stake.

Lula: A Tough Act to Follow

Rousseff inherited power from popular president Luiz Incio Lula da Silva, who was president

from 2003 to 2011 and balanced orthodox economic policies with robust social spending to

produce impressive economic growth and a burgeoning middle class.1The same popularity that

made it possible for him to designate Rousseff his successor also made him a tough act to follow.

Even worse for Rousseff, however, Lula failed to spend political capital to tackle a series of

reforms that could have sustained economic growth and created opportunity for Brazilians

hoping to improve their quality of life.

Lula was a machinist with a modest education, and he impressed observers when he declared

upon taking office that his certificate of election was the first diploma he had ever received. A

committed democrat who respected the countrys institutions, Lula stood in stark contrast to a

crop of authoritarian caudilloswho governed concurrently in Venezuela, Bolivia, Ecuador, and

Argentina. While those leaders excoriated neoliberalism and championed socialism of the 21st

century,Lula hewed to the orthodox macroeconomic and monetary policies of his predecessors

that had tamed inflation, spurred growth, and modernized the economy.

The standard-bearer of the leftist Workers Party, Lula exceeded expectations within the private

sector at home and abroad, meaning international capital markets were generous with their

investment and accolades. Unlike Venezuelan leader Hugo Chvez and a cadre of like-minded


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acolytes in Latin America, Lula established rapport with world leaders across the political

spectrum, including conservative US President George W. Bush.

At home, Lula dramatically expanded government programs aimed at eliminating hunger,

alleviating poverty, and encouraging social mobility through education. These social-welfare

programssuch as the BolsaFamliacash transfershave helped 50 million Brazilians out of

poverty.2In a nation with one of the highest levels of income equality in the world, these

programs enjoyed widespread support and earned international acclaim.3

In 2005, Brazil earned a seat at the thenG8 (Group of Eight) dialogue and was hailed as an

example for the developing world. Indeed, Brazils relative stability in the wake of the global

financial crisis of 200708 appeared to validate the most optimistic forecasts for the countrys

economic future.

The windfall from a commodity boom fueled by Chinese consumption and the discovery of vast

deep-water oil deposits in 2007 buoyed the Brazilian economy, lowered unemployment, and

filled the governments coffers. The downside to the countrys apparently boundless prospects

was that Lula was under no pressure to invest his considerable political capital in a reform

agenda that most experts say was needed to make Brazil more competitive and unlock its full

potential.

From Surge to Stagnation

Nearly seven years ago, writing in Brazils largest newspaper,Folha de So Paulo, I observed:

Lula can make Brazils economy unshakeable by liberalizing the labor market, reforming

the antiquated tax system, offering incentives to high-technology industry, and providing

protection for intellectual property worthy of a first-world economy. By doing these

things, Lula can ensure that Brazil can compete effectively for global capital to sustain

high-growth rates, generate millions of jobs that are the permanent cure for poverty, and


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push Brazils economy into a higher orbit. This will make Brazil an industrial giant in its

own right, not merely a warehouse for raw materials for China.4

Alas, neither Lula nor his successor Rousseff adopted this course.5Many economists have

identified specific unfinished business in Brazils reform agenda, including improving

government efficiency and accountability, taming costly public pensions, simplifying the

labyrinthine federal and state tax systems, liberalizing the labor code, removing arbitrary

obstacles to doing business, and attracting foreign capital and technology into the promising

energy sector.

TheEconomic Survey of Brazil 2013, published by the Organisation for Economic Co-operation

and Development, echoed the need to cut public expenditures and debt, reform the tax and labor

codes, and continue to manage inflation.6It also recommended education reform that focuses on

improving student performance and skills, entrepreneurship, and vocational worker training.

Moreover, analysts have warned for years that Brazil was too dependent on the Chinese

commodity boom. By 2012, Brazils commodity exports accounted for 14 percent of gross

domestic product (GDP), compared to 6 percent in the 1990s.7Then, the tide began to turn.

Weakening Chinese demand for agriculture goods and other raw materials hit the Brazilian

economy hard, with growth sliding from 7.5 percent in 2010 to 2.3 percent in 2013, and less than

1 percent is projected this year.8 Few were surprised when Brazils finance ministry announced

in late August that the country had entered a recession.9

Another example of the dire need for reform is the current management of state-owned oil

company Petrobras.10Even with the prospects for vast new oil deposits, Brazils petroleum

sector has failed to reach its potential and is under unrelenting pressure from politicians to

generate the revenue needed to fund the states social-welfare programs.

In recent years, Brazil has failed to attract the capital and technologies needed to exploit its

resources because of the nationalist ground rules the government has imposed on investors.


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Domestic-content rules and onerous requirements to enter into partnerships with Petrobras have

discouraged many international oil companies from entering the Brazilian market.11

Even as Petrobrass profitability and stock prices have declined, the revenues needed to fund

exploration and operations to ensure its long-term success are siphoned off to finance election-

year social spending. Early this year, the Brazilian Congress earmarked 75 percent of oil

royalties for education and 25 percent for health care. In addition, in a vain attempt to keep

gasoline prices low, Petrobras has been required to divert revenue to import foreign oil so as to

satisfy domestic consumption.12

Recent reports about falling production, exchange-rate losses, and excessive government

intervention have triggered a lack of confidence from investors who once believed that Petrobras

had the potential to become one of the most profitable oil companies in the world. According to

Adriano Pires, a renowned Brazilian energy consultant, Petrobras is now a tool for short-term

economic policy, used to protect domestic industry from competition, and to fight inflation. This

disastrous process will intensify if it is not reversed.13

Petrobras had hoped to reverse a recent trend of falling annual productionspecifically, a 2

percent dip in 2012 and a 3.11 percent decrease in 2013by aiming for a 7.5 percent increase in

output in 2014. In August, government sources revealed that Petrobras would not meet that

ambitious objective because of delays in bringing new platforms into production. Although the

company has invested between $22 billion and $47 billion a year since 2008 and made large new

discoveries, according to a Reuters report, production is only 5.5 percent greater than it was in

2008.14

Inadequate infrastructure is another obstacle to Brazils growth. Much attention has been paid to

Brazils costly renovation and construction of venues and other facilities to host both the 2014

Fdration Internationale de Football AssociationWorld Cup and 2016 Summer Olympics in Rio

de Janeiro.


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These expenditures stand in stark contrast to the significant countrywide infrastructure deficit

that inhibits key sectors of the economy. In contrast to the global average of 3.8 percent, Brazil

spends only 1.5 percent of GDP on infrastructure.15This underinvestment has resulted in

inadequate transportation networks and inefficient ports, which have hampered commerce, raised

shipping costs, and undermined the profitability of agriculture, mining, and other industries that

depend on the export market.

Overcoming these obstacles is essential for Brazil to sustain healthy growth rates and realize its

aspiration of becoming a global economic power. An emerging-markets research analyst at

Bulltick Capital Markets warned last year, Interventionist and erratic policymaking, capital

controls, fears of Chinas deceleration, and declining commodity prices have affected the

Brazilian economy.16

According to a Bloomberg report from early August, Analysts surveyed by the Central Bank

expect the slowdown to continue. . . . They [the analysts] have cut their 2014 growth estimate for

10 straight weeks, to 0.86 percent, which would mark the slowest expansion since the recession

of 2009. The analysts furthermore noted, Even as economic activity remains uneven, consumer

prices may continue to surge above the 6.5 percent upper limit of the Central Banks target

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An Anxious Electorate

Slow growth and latent signs of inflation appear to be stoking the anxiety of Brazilian voters.

Widespread, spontaneous urban demonstrations in June 2013sparked by public-transportation

rate hikes, spiraling costs of hosting both the World Cup and Summer Olympics, and the

governments perceived ineffectivenesssurprised many observers who considered Brazil a

success story.

The acclaimed social programs that were initiated 20 years ago are credited with expanding the

middle class. However, these citizens are now realizing that the government that helped them


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ascend to the middle class has been much less successful in encouraging the creation of private-

sector jobs needed to sustain their quality of life.

Indeed, government inefficiency and corruption, bureaucratic obstacles to enterprise and

innovation, a byzantine tax system, and generous public-sector pensions, for example, have

painted the state as part of the problem. In reaction to slowing growth and popular discontent,

Rousseff has pledged massive new government-spending programs while eschewing the difficult

structural reforms needed to retool the economy to make it more competitive, attractive to

investment, and productive.

Polls of the Brazilian electorate since those well-publicized 2013 demonstrations reflect a dip in

public approval of Rousseffs governmentfrom 65 percent in March 2013 to 38 percent in

August 2014, according to the public opinion firm Datafolha. Worse yet for the president, dozens

of periodic polls by IBOPE (Brazilian Institute of Public Opinion and Statistics) record a

catastrophic slide in public support for specific policies on key issues confronting the country.

For example, IBOPE polls found that Brazilians disapproved of the governments

counterinflation measures by a margin of 71 to 21 percent in June, a negative swing of 55 points

since September 2012when respondents approved of these policies by a narrow 50 to 45

percent margin. Even in the area of fighting hunger andpoverty, Rousseffs policies were

rejected by a 53 to 41 percent margin, a negative swing of 31 points in that same period. The

governments health care policies were rejected by a 78 to 19 percent margin; similarly, tax

policies were disapproved by a 77 to 15 percent margin and security policies were disapproved

by a 75 to 21 percent margin. Although Rousseff is campaigning on a promise to increase

government education spending to a staggering 10 percent of GDP, Brazilians polled in June

disapproved of her education platform by a 67 to 30 percent margin.18

In spite of these disastrous numbers, key polls found Rousseff beating Neves, although the race

appeared to be tightening even before the emergence of new Socialist nominee Marina Silva. In

light of these overwhelmingly negative impressions of how Rousseff is handling each of the

countrys major challenges, it would appear that the incumbents best chance at reelection is


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defining her opponents as radically incompatible with the countrys values or as grossly

incapable of managing the nations affairs.

Whether the Brazilian people are prepared to hear arguments from Roussefflet alone tolerate a

negative campaignremains to be seen. Television and radio campaign advertisements

commenced only on August 19.

The Candidates and Their Messages

Dilma Vana Rousseff. Rousseff(born December 14, 1947) is the first woman to serve as

president of the Federative Republic of Brazil. She is the nations 36th head of state, sworn in to

a four-year term on January 1, 2011. In 2010, she won 56 percent of the vote in a runoff versus

Jos Serra of the Brazilian Social Democracy Party (PSDB). Rousseff previously served as

minister of mines and energy from 2003 to 2005 and as chief of staff to Lula. She is a candidate

for reelection, representing the Workers Party (PT).

Rousseff was raised in a middle-class family in the southeastern city of Belo Horizonte. She

became a socialist in her youth and, in the wake of a 1964 coup, joined various leftist guerrilla

organizations. She was imprisoned from 1970 to 1972, during the military dictatorship, and was

reportedly tortured.

As president, Rousseff has remained faithful to the economic and social policies of her

predecessor. In her reelection campaign, she has doubled down on a statist approach,

notwithstanding growing skepticism among Brazilians. Rather than address the economic

downturn and public dissatisfaction that has marked her tenure, her partys platform seeks to

remind Brazilians of the past achievements of Lulas PT government.

In just 12 years the PT and allied parties staged a peaceful social revolution, the widest

and most vigorous process of changing the country's history. . . . After these major

changes, it is necessary to usher in a new cycle of change, to overcome structural and


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secular issues that still prevent the full development of a fairer country and to ensure that

there will be no setbacks in the important achievements of the last 12 years.19

Rather than offer a specific blueprint or any supporting arguments for a new term in office,

Rousseffs platform offers mostly aspirational statements: Economic strength, the breadth of

social policies and productive competitiveness will ensure the sustainability of what has been

accomplished. Rousseff pledges tolaunch a new historical cycle of prosperity, opportunity and

change. Her platform mentions reducing inflation and promoting growth, and she has said that

economic growth will be stimulated with the increase in investment rates in the economy and

the expansion of a solid and dynamic domestic market, and the expansion of infrastructure

investments.20

Rousseffs economic platform furthermore asserts that productive competitiveness will be

achieved through investment in production and mass consumption; investment in social and

economic infrastructure; the reduction of bureaucratic constraints; and investing in education,

science, technology and innovation to build what Rousseff calls a society of knowledge.

Her campaign notes that The expansion and qualification of the internal market and an

expansion in exports will lie in the center of the productivity strategy. The PTs economic

platform also says, without further explanation, that increasing exports will take place by

modernizing Brazils industrial capacity, improving the business environment and empowering a

more qualified workforce. The campaign likewise proposes simplifying the tax code and

reducing logistics costs and bureaucracy to improve the countrys business environment.

On the campaign trail, Rousseff has been clearer about her social and economic proposals. She

has pledged massive new spending on government antipoverty programs, health, education, and

housing. In May, Rousseff announced a 10 percent increase in social-welfare transfer payments

to the poor, well above the rate of inflation. Furthermore, although public-education outcomes

have proven unsatisfactory, she has proposed increasing education spending to 10 percent of

GDP, the highest rate of any nation in history.


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Acio Neves da Cunha.Neves (born March 10, 1960) is a Brazilian economist and senator from

the southeastern state of Minas Gerais. He served as governor of that state from 2003 to 2010

and as a congressman from 1987 to 2002. Neves began his political career as personal secretary

to his grandfather, Tancredo Neves, whose election as president signaled the end of the military

dictatorship.21Acio Neves is the presidential candidate for the PSDB.

When Neves became governor of Minas Gerais, the state was practically bankrupt, with an

annual deficit of $270 million. However, implementing what he described as management

shock, he modernized procurement, reformed the bureaucracy, and cut spending; these

measures led Minas Gerais out of bankruptcy and ushered in a period of economic prosperity.

As part of his economic platform, Neves pledges to implement many of the policies that turned

around his home state. He addresses the need to fight inflation and encourage job creation. He

also asserts on his campaign website that economic development must have a regional context,

with special treatment through programs and projects for the most economically vulnerable

regions of Brazil.22

In terms of foreign trade, Neves cites the need to promote a much more vigorous integration of

Brazil with the world through the reduction of technological gaps and with a modernization

strategy. He pledges to reduce the tax burden on exports, simplify and reduce national and

ancillary costs, and streamline the laws and bureaucracy regulating foreign trade. It is

particularly noteworthy that Neves intends to lay the groundwork for a preferential trade

agreement with the United States.

His economic platform includes a detailed plan for modernizing Brazils infrastructure:

Planningrationally; assessing costs and benefits; listening to the public, investors and users;

executing projects in a competent manner; adopting well-designed projects that embrace best

practices; applying regulations with independence and transparency; balancing the interests of

distributors and users; and reducing the risks of frequent rule changes.23


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In his macroeconomic strategy, Neves outlines the necessity of having a truly autonomous

central bank, which he asserts will be able to maintain an inflation rate of 4.5 percent; reduce

public spending; create an environment that protects legal security; and establish an

administration that is transparent.24

Neves also proposes simplifying the national tax system by unifying taxes and contributions

levied on the same basis, with respect to federal principles; streamlining the use of credit

balances accrued by the tax authorities; and the creation of a single registry for individuals and

corporations.

Marina Silva. Maria Osmarina Silva Vaz de Lima (born February 8, 1958) is a Brazilian

environmentalist and politician. She was a member of the PT and served as a PT senator before

becoming minister of the environment in 2003 under Lula. She resigned from her cabinet post in

2008 and joined the Green Party in 2010 to run as its presidential candidate. She finished third in

the first round, winning more than 19 percent of the popular vote.

In April 2014, Eduardo Campos, governor of the state of Pernambuco, announced his

presidential candidacy for the PSB, naming Silva his vice-presidential running mate. After

Campos's death in a plane crash on August 13, Silva was nominated as the PSB presidential

candidate.

Silvas life story may resonate among those who sympathize with Lulas rags-to-riches story.

She is one of 11 children of rubber-tapper parents, born in the far-western state of Acre. After

her parents died when she was 16, a Catholic boarding school took responsibility for her care,

taught her to read and write, and introduced her to liberation theology. Later in her life, after

nearly dying from heavy-metal poisoning, Silva became an evangelical Christian.

Silva first foray into political activism was as an environmentalist. She was involved in protests

against deforestation with Chico Mendes, the famous trade-union leader and environmental

activist who was assassinated in 1988. Although Silva is a PSB candidate with a Green Party and

PT background, she holds socially conservative positions against gay marriage and abortion.


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Only a few weeks after the tragic death of Campos, Silvas campaign is still developing a

political platform. Nevertheless, her campaign has described an economic agenda emphasizing

the need for reforms that would encourage growth and control inflation, as achieved by

Rousseffs predecessors.

Silvas campaign website stresses the need for [r]eforming the Brazilian state and its

management tools . . . to change [Brazils] development model, adding, The government needs

to address the reform of politics, public administration, public policy management, and

federalism.25Her campaign cites the loss of competitiveness and dynamism in the economy

and says Brazil has a strong economy, which is weakened by the bureaucratic tangle, and an

abundance of natural resources, which is wrecked by the absence of policies that encourage their

sustainable use. Her platform promotes the transition to a low carbon economy, reducing

social inequalities and . . . technological innovation in production.

As minister of the environment, Silva feuded with the powerful Brazilian agricultural industry,

which accounts for one-fourth of the countrys economy. However, the private sector now

appears reassured that she will adopt a much more business-friendly disposition as president.

This optimismapparent in the enthusiasm in Brazils stock market that greeted Silvas surge in

the pollsis based on the reputations of free-market economists and billionaire patrons who are

backing the PSB standard-bearer.26

These advisers are promoting a platform of orthodox macroeconomic management, fiscal

discipline, consistent inflation targeting, and a free-floating exchange rate. University of

Cambridgeeducated economist Eduardo Giannetti da Fonseca has been careful to praise Lulas

approach while criticizing his successor.27These free-market advisers also tout the designation

of Beto Albuquerque, an experienced congressman with a probusiness track record, as Silvas

running mate.28

Maria Alice Setubal, one of Silvas principal advisers and confidants, is a member of Brazils

12th-wealthiest family, whose banking fortune is estimated at $3.3 billion. Setubal commented


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during an interview that the PSB candidate would aim for the governments 4.5 percent

inflation target from the start and would support central bank autonomy to set monetary policy.

She also noted that Silva is surrounding herself with people who understand the markets, and

she is committed to gain the trust of the financial establishment.29

The Campaign

The first-round balloting will be held on October 5. A runoff is required if no candidate obtains

more than 50 percent of the vote, and the two top finishers advance to the runoff, which is

scheduled for October 26.

Of Brazils nearly 200 million people,about 143 million who are age 16 or older are eligible to

vote in the upcoming presidential elections. Voting is obligatory for most persons; voting if

voluntary for persons who are ages 16 to 17, older than 70, or illiterate. Forty percent of voters

live in urban centers, and the rest in the countrys interior. All votes are cast on touchpad

devices.

Eleven candidates are seeking the presidency in Brazil, although Rousseff, Silva, and Neves are

the three frontrunners heading into the October balloting.30The campaign is dominated by

television and radio advertising spots, which are limited to state-purchased blocks of time

between August 19 and October 3 that are strictly apportioned among the various alliances.

The August 13 plane crash that took the life of PSB candidate Campos has changed the race

dramatically. A Datafolha poll taken in mid-July found Campos with 10 percent of the vote,

Neves with 20 percent, and Rousseff with 36 percent.

Since Silva was designated as Camposs successor, a new Datafolha poll gives her 21 percent of

the vote, compared to 20 percent for Neves and 36 percent for Rousseff. In a runoff, the poll

predicts that Silva would beat Rousseff 47 to 43 percent. That same poll found that Rousseff

would beat Neves 47 to 39 percent in a prospective runoff.


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That poll also found that Rousseff had the highest rejection rate, with 34 percent of those

polled saying that they would not vote for her under any circumstances. Silva had the lowest

rejection rate, at 11 percent, compared to Neves, whose rate was 18 percent. Oddly enough, that

poll also recorded a significant increase in Rousseffs approval rating, which rose to 38 percent.

Since their television and radio advertising began in mid-August, each candidate will have had

six weeks to make his or her case before the first round of voting. The publics anxiety over the

future and its solid rejection of Rousseffs handling of every key issue may lead voters to take

heed of the alternatives being offered by Silva and Neves. However, those challengers are far

from closing the deal with voters.

Silva is an experienced candidate, but it remains to be seen if she can deploy a competent

message and campaign team in the coming weeks. Her prospects have been buoyed by the rush

of media attention, but she can expect much more critical scrutiny as election day approaches.

Although her appeal for a new politics is refreshing, voters will consider whether she has the

temperament and talent required to manage Brazils fractious political model. These skills will

be sorely tested if she moves into the second round and has to wheel and deal to broaden her

coalition.

Neves has been betting that Brazilians are open to a fresh approach to retooling the nations

economy to achieve sustainable growth. Unfortunately for him, Silvas surge has appeared to

eclipse Nevess message.

Rousseffsteam cannot be sanguine about the tightening race. However, she has the advantages

of a rock-solid base of around 40 percent, the powers of incumbency, and her partys superior

political organization. Her best strategy may be to run a sober campaign emphasizing experience

and empathy, hoping that Silva stumbles as media scrutiny and the PT criticism intensify. Of

course, Rousseffs campaign will be able to deploy Lulas legacy to remind the working class

and new middle class of his protgs role in transforming Brazil.31


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Conclusion

Given the trajectory of Brazils economy and the manifestations of public anxiety in recent

years, it was entirely predictable that the 2014 presidential race would tighten as the election

approached. However, Rousseff intended to play it safe, doubling down on social spending

despite palpable popular doubts that these policies could turn the country around.

The unexpected change in the field of candidates has scrambled the first-round contest and, it

appears, will force Rousseff into a runoff. This new scenario means that Brazilians will be

paying attention to two outspoken critics of the status quo, giving them more time to envision a

new president and a new path for their country.

Roger F. Noriega ([email protected]), a former US ambassador to the Organization of

American States and assistant secretary of state for Western Hemisphere affairs (200105), is a

visiting fellow at AEI and managing director of Vision Americas LLC, a Washington, DCbased

firm with US and foreign clients. He is a member of the board of directors of Brazil Minerals,

which operates in Brazil.

Notes

1. Lulas Legacy,Economist, September 30, 2010,www.economist.com/node/17147828.2. Bolsa Familia is a social-welfare program that provides cash stipends to encourage poor families to availthemselves of schooling and health services. The program, which originated in Braslia, was implemented at thefederal level by former president Henrique Cardoso (19952003). See Shobhan Saxena, Brazil Celebrates a Decadeof Bolsa Familia with Pride and Politics, The Hindu, November 8, 2013,www.thehindu.com/todays-paper/tp-international/brazil-celebrates-a-decade-of-bolsa-familia-with-pride-and-politics/article5328034.ece.3. The World Bank notes that Brazils Gini coefficient, which measures income inequality, is 54.7, which is the 13thhighest among 150 countries. See World Bank, GINI Index, http://data.worldbank.org/indicator/SI.POV.GINI.4. Roger Noriega, Lula pode fazerde 2008 um ano muito bom [Lula Can Make 2008 a Very Good Year],Folhade So Paulo, December 30, 2007,www1.folha.uol.com.br/fsp/opiniao/fz3012200708.htm.

5. This paper draws from several AEI publications in recent years that have detailed Brazils economic woes and themismanagement of Petrobras, including Roger F. Noriega and Felipe Trigos, Brazil and Mexico: Hope or Hype?AEI, April 3, 2014,www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/brazil-and-mexico-hope-or-hype/;and Roger F. Noriega and Felipe Trigos, Latin American Energy Monopolies: Boom or Bust?AEI, July 31, 2013,www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/latin-american-energy-monopolies-boom-or-bust/.6. Organisation for Economic Co-operation and Development, OECD Economic Surveys: Brazil 2013, (October2013),www.oecd-ilibrary.org/economics/oecd-economic-surveys-brazil-2013_eco_surveys-bra-2013-en.
mailto:[email protected]:[email protected]:[email protected]://www.economist.com/node/17147828http://www.economist.com/node/17147828http://www.economist.com/node/17147828http://www.thehindu.com/todays-paper/tp-international/brazil-celebrates-a-decade-of-bolsa-familia-with-pride-and-politics/article5328034.ecehttp://www.thehindu.com/todays-paper/tp-international/brazil-celebrates-a-decade-of-bolsa-familia-with-pride-and-politics/article5328034.ecehttp://www.thehindu.com/todays-paper/tp-international/brazil-celebrates-a-decade-of-bolsa-familia-with-pride-and-politics/article5328034.ecehttp://www1.folha.uol.com.br/fsp/opiniao/fz3012200708.htmhttp://www1.folha.uol.com.br/fsp/opiniao/fz3012200708.htmhttp://www1.folha.uol.com.br/fsp/opiniao/fz3012200708.htmhttp://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/brazil-and-mexico-hope-or-hype/http://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/brazil-and-mexico-hope-or-hype/http://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/brazil-and-mexico-hope-or-hype/http://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/brazil-and-mexico-hope-or-hype/http://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/latin-american-energy-monopolies-boom-or-bust/http://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/latin-american-energy-monopolies-boom-or-bust/http://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/latin-american-energy-monopolies-boom-or-bust/http://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/latin-american-energy-monopolies-boom-or-bust/http://www.oecd-ilibrary.org/economics/oecd-economic-surveys-brazil-2013_eco_surveys-bra-2013-enhttp://www.oecd-ilibrary.org/economics/oecd-economic-surveys-brazil-2013_eco_surveys-bra-2013-enhttp://www.oecd-ilibrary.org/economics/oecd-economic-surveys-brazil-2013_eco_surveys-bra-2013-enhttp://www.oecd-ilibrary.org/economics/oecd-economic-surveys-brazil-2013_eco_surveys-bra-2013-enhttp://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/latin-american-energy-monopolies-boom-or-bust/http://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/latin-american-energy-monopolies-boom-or-bust/http://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/brazil-and-mexico-hope-or-hype/http://www.aei.org/outlook/foreign-and-defense-policy/regional/latin-america/brazil-and-mexico-hope-or-hype/http://www1.folha.uol.com.br/fsp/opiniao/fz3012200708.htmhttp://www.thehindu.com/todays-paper/tp-international/brazil-celebrates-a-decade-of-bolsa-familia-with-pride-and-politics/article5328034.ecehttp://www.thehindu.com/todays-paper/tp-international/brazil-celebrates-a-decade-of-bolsa-familia-with-pride-and-politics/article5328034.ecehttp://www.economist.com/node/17147828mailto:[email protected]


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7. Peter Kingstone, Brazils Reliance on Commodity Exports Threatens Its Medium- and Long-Term GrowthProspects,Americas Quarterly(Summer 2012),www.americasquarterly.org/kingstone.8. TableEconomists Cut Brazil Growth Forecasts for 2013, 2014, Reuters, December 16, 2013,http://finance.yahoo.com/news/table-economists-cut-brazil-growth-103527789.html.9. Brian Winter, Brazil Enters Recession in Election Blow, Reuters, August 29, 2014,www.reuters.com/article/2014/08/29/us-brazil-economy-idUSKBN0GT1FS20140829.10.Noriega and Trigos, Latin American Energy Monopolies: Boom or Bust?11. Juan Forero, Brazils Oil Euphoria Hits Reality Hard, Washington Post, January 6, 2014.12. Brazil President Hails Oil Royalties Law as Historic Victory, Press TV, January 27, 2014,www.presstv.com/detail/2013/08/20/319595/brazil-president-hails-oil-royalties-law/.13. Simon Romero, Petrobras, Once Symbol of Brazils Oil Hopes, Strives to Regain Lost Swagger,New YorkTimes, March 26, 2013.14. Petrobras Unlikely to Meet 2014 Oil Output Goal, Government Source, Reuters, August 4, 2014,www.reuters.com/article/2014/08/04/petrobras-output-idUSL2N0QA1UD20140804.15. Has Brazil Blown It?Economist, September 26, 2013,www.economist.com/news/leaders/21586833-stagnant-economy-bloated-state-and-mass-protests-mean-dilma-rousseff-must-change-course-has.16. Kathryn Rooney Vera, Is Batista a Symbol of Brazil's Markets, Economy? Bloomberg Brazil, July 26, 2013,www.bloomberg.com/video/is-batista-a-symbol-of-brazil-s-markets-economy-BVz1WqUPTU6BzQZKt1FZmA.html.17. Matthew Malinowski and David Biller, Rousseff Fundraising Outpaces Neves Ahead of Brazil Election,

Bloomberg, August 7, 2014,www.bloomberg.com/news/2014-08-06/rousseff-leads-neves-in-brazil-presidential-campaign-fundraising.html.18. A summary of a series of polls conducted by the Brazilian Institute of Public Opinion and Statistics (IBOPE)was included in an electoral guide prepared by the Department of Macroeconomic Research of the Ita Unibanco,S.A. conglomerate, obtained by the author.19. Dilma Rousseff, Programa de Governo 2014 [Government Program for 2014],https://programadegoverno.dilma.com.br/wp-content/uploads/2014/07/Programa-de-Governo-Dilma-2014-RGB1.pdf.20. Ibid.21. Tancredo Neves was elected president in 1985 but died without taking office. His designated vice president, JosSarney, became acting president on March 15, 1985, and was sworn in as president upon Nevess death on April 21,1985.22. Seehttp://aecioneves.com.br/.

23. Acio Neves, Conhea algumas das propostas [Government Proposals],http://aecioneves.com.br/propostas.html?utm_medium=menu.24. Ibid.25. Marina Silva, Estado ea democracia de alta intensidade [Government Guidelines],http://marinasilva.org.br/diretrizes/eixo-01/.26. Reed Johnson and Rogerio Jelmayer, Brazil Eager for Silvas Economic Vision, Wall Street Journal, August20, 2014,http://online.wsj.com/articles/investors-seek-signs-of-how-marina-silva-would-run-brazils-economy-1408571595.27. Asesor de Marina Silva Elogia Poltica Econmica de Lula y Critica a Rousseff [Marina Silvas AdvisorPraises Economic Policy of Lula and Criticizes Rousseffs], Intereconomia.com (Sao Paulo), August 20, 2014,www.radiointereconomia.com/2014/08/20/asesor-de-marina-silva-elogia-politica-economica-de-lula-y-critica-a-rousseff/.28. Anderson Antunes, Meet the Multimillionaire Banking Heir Who Is Backing Brazils Marina Silva Presidential

Bid,Forbes,www.forbes.com/sites/andersonantunes/2014/08/27/meet-the-multi-millionaire-banking-heir-who-is-backing-brazils-marina-silva-presidential-bid/.29. Raymond Colitt, Socialist Candidate Would Shoot for 3% Inflation as Brazils President, Bloomberg, August22, 2014,www.bloomberg.com/news/2014-08-22/marina-silva-would-shoot-for-3-inflation-as-brazil-s-president.html.30. The other eight registered candidates for president of Brazil in 2014 are Everaldo Pereira, Social Christian Party;Luciana Genro, Socialism and Freedom Party; Eduardo Jorge, Green Party; Jos Maria Eymael, Social DemocraticChristian Party; Levy Fidelix, Brazilian Labor Renewal Party; Mauro Iasi, Brazilian Communist Party; Rui CostaPimenta, Workers Cause Party; and Jos Maria, United Socialist Workers Party.
http://www.americasquarterly.org/kingstonehttp://www.americasquarterly.org/kingstonehttp://www.americasquarterly.org/kingstonehttp://finance.yahoo.com/news/table-economists-cut-brazil-growth-103527789.htmlhttp://finance.yahoo.com/news/table-economists-cut-brazil-growth-103527789.htmlhttp://www.reuters.com/article/2014/08/29/us-brazil-economy-idUSKBN0GT1FS20140829www.reuters.com/article/2014/08/29/us-brazil-economy-idUSKBN0GT1FS20140829http://www.reuters.com/article/2014/08/29/us-brazil-economy-idUSKBN0GT1FS20140829www.reuters.com/article/2014/08/29/us-brazil-economy-idUSKBN0GT1FS20140829http://www.presstv.com/detail/2013/08/20/319595/brazil-president-hails-oil-royalties-law/http://www.presstv.com/detail/2013/08/20/319595/brazil-president-hails-oil-royalties-law/http://www.reuters.com/article/2014/08/04/petrobras-output-idUSL2N0QA1UD20140804http://www.reuters.com/article/2014/08/04/petrobras-output-idUSL2N0QA1UD20140804http://c/Users/Owner/AppData/Local/Temp/www.economist.com/news/leaders/21586833-stagnant-economy-bloated-state-and-mass-protests-mean-dilma-rousseff-must-change-course-hashttp://c/Users/Owner/AppData/Local/Temp/www.economist.com/news/leaders/21586833-stagnant-economy-bloated-state-and-mass-protests-mean-dilma-rousseff-must-change-course-hashttp://c/Users/Owner/AppData/Local/Temp/www.economist.com/news/leaders/21586833-stagnant-economy-bloated-state-and-mass-protests-mean-dilma-rousseff-must-change-course-hashttp://www.bloomberg.com/video/is-batista-a-symbol-of-brazil-s-markets-economy-BVz1WqUPTU6BzQZKt1FZmA.htmlhttp://www.bloomberg.com/video/is-batista-a-symbol-of-brazil-s-markets-economy-BVz1WqUPTU6BzQZKt1FZmA.htmlhttp://www.bloomberg.com/video/is-batista-a-symbol-of-brazil-s-markets-economy-BVz1WqUPTU6BzQZKt1FZmA.htmlhttp://www.bloomberg.com/news/2014-08-06/rousseff-leads-neves-in-brazil-presidential-campaign-fundraising.htmlhttp://www.bloomberg.com/news/2014-08-06/rousseff-leads-neves-in-brazil-presidential-campaign-fundraising.htmlhttp://www.bloomberg.com/news/2014-08-06/rousseff-leads-neves-in-brazil-presidential-campaign-fundraising.htmlhttp://www.bloomberg.com/news/2014-08-06/rousseff-leads-neves-in-brazil-presidential-campaign-fundraising.htmlhttps://programadegoverno.dilma.com.br/wp-content/uploads/2014/07/Programa-de-Governo-Dilma-2014-RGB1.pdfhttps://programadegoverno.dilma.com.br/wp-content/uploads/2014/07/Programa-de-Governo-Dilma-2014-RGB1.pdfhttps://programadegoverno.dilma.com.br/wp-content/uploads/2014/07/Programa-de-Governo-Dilma-2014-RGB1.pdfhttp://aecioneves.com.br/http://aecioneves.com.br/http://aecioneves.com.br/http://aecioneves.com.br/propostas.html?utm_medium=menuhttp://marinasilva.org.br/diretrizes/eixo-01/http://marinasilva.org.br/diretrizes/eixo-01/http://online.wsj.com/articles/investors-seek-signs-of-how-marina-silva-would-run-brazils-economy-1408571595http://online.wsj.com/articles/investors-seek-signs-of-how-marina-silva-would-run-brazils-economy-1408571595http://online.wsj.com/articles/investors-seek-signs-of-how-marina-silva-would-run-brazils-economy-1408571595http://online.wsj.com/articles/investors-seek-signs-of-how-marina-silva-would-run-brazils-economy-1408571595http://www.radiointereconomia.com/2014/08/20/asesor-de-marina-silva-elogia-politica-economica-de-lula-y-critica-a-rousseff/http://www.radiointereconomia.com/2014/08/20/asesor-de-marina-silva-elogia-politica-economica-de-lula-y-critica-a-rousseff/http://www.radiointereconomia.com/2014/08/20/asesor-de-marina-silva-elogia-politica-economica-de-lula-y-critica-a-rousseff/http://www.forbes.com/sites/andersonantunes/2014/08/27/meet-the-multi-millionaire-banking-heir-who-is-backing-brazils-marina-silva-presidential-bid/http://www.forbes.com/sites/andersonantunes/2014/08/27/meet-the-multi-millionaire-banking-heir-who-is-backing-brazils-marina-silva-presidential-bid/http://www.forbes.com/sites/andersonantunes/2014/08/27/meet-the-multi-millionaire-banking-heir-who-is-backing-brazils-marina-silva-presidential-bid/http://www.forbes.com/sites/andersonantunes/2014/08/27/meet-the-multi-millionaire-banking-heir-who-is-backing-brazils-marina-silva-presidential-bid/http://www.bloomberg.com/news/2014-08-22/marina-silva-would-shoot-for-3-inflation-as-brazil-s-president.htmlhttp://www.bloomberg.com/news/2014-08-22/marina-silva-would-shoot-for-3-inflation-as-brazil-s-president.htmlhttp://www.bloomberg.com/news/2014-08-22/marina-silva-would-shoot-for-3-inflation-as-brazil-s-president.htmlhttp://www.bloomberg.com/news/2014-08-22/marina-silva-would-shoot-for-3-inflation-as-brazil-s-president.htmlhttp://www.bloomberg.com/news/2014-08-22/marina-silva-would-shoot-for-3-inflation-as-brazil-s-president.htmlhttp://www.bloomberg.com/news/2014-08-22/marina-silva-would-shoot-for-3-inflation-as-brazil-s-president.htmlhttp://www.forbes.com/sites/andersonantunes/2014/08/27/meet-the-multi-millionaire-banking-heir-who-is-backing-brazils-marina-silva-presidential-bid/http://www.forbes.com/sites/andersonantunes/2014/08/27/meet-the-multi-mil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31. The author interviewed Joao Augusto de Castro Neves, analyst at the Eurasia Group in Washington, DC, whoprovided valuable insight on the dynamics of the presidential campaign in Brazil.

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