Bolsonaro: only one more step to Brazil’s presidency

In the first round of the presidential elections in Brazil, Jair Bolsonaro pooled 46.0% of the valid votes, missing the absolute majority. The runner-up was Haddad, the candidate of the workers’ party PT, who crossed the finishing line with 29.3% of the votes. Both must now face a second ballot on 28 October. Although Haddad is likely to attract a large share of the votes in the second round from the candidate Gomes who came in at third place (12.5%), the gap between him and Bolsonaro seems too big to close. Faced with the choice between a hardline security drive backed by a business-friendlier political course and a return of the PT with its candidate Haddad who had been implicated in corruption scandals, the election turned out in favour of Bolsonaro. Bolsonaro’s openly racist and misogynistic statements and his support for the military dictatorship in Brazil (1962 to 1985) still managed to find favour with large sections of the centre right.

In addition to the presidential elections, elections were also held for the Chamber of Deputies, and two thirds of the seats in the Senate were newly filled. Profiting in Bolsonaro’s wake, his party PSL managed to raise its number of seats in the lower house (513 seats) from 8 to 52. The parties in the current ruling coalition suffered in some cases significant losses, with neither of them achieving a majority in either the Chamber of Deputies or the Senate. In addition to the right-wing supporters of Bolsonaro’s camp, the left-wing parties of the Chamber of Deputies also chalked up gains, despite the PT’s losses.

In the past, it was necessary in a corruption-prone process to form majorities by accepting political compromises or even direct inducements. It always proved helpful that party membership was not particularly stable and that ideological differences could be bridged. The centre parties usually rallied behind the president concerned. In purely arithmetical terms, the old ruling coalition together with Bolsonaro’s PSL that was previously in opposition would have a majority in both chambers of parliament.

The Brazilien real had already welcomed Bolsonaro’s improving chances in recent weeks by firming up, and was able to make significant gains after the elections. At the end of the day, the centre-right parties can be expected to support Bolsonaro, thereby making the formation of a stable and business-friendlier government likely. If, contrary to expectations, Haddad succeeds in staving off Bolsonaro in the second round, he would certainly find it much harder to gain a viable majority in parliament.

Nevertheless, the new government will also have to deal with the economic realities in Brazil. In his election campaign, Bolsonaro had whistled back his economic advisor who had hinted at reintroducing a financial transaction tax. Bolsonaro also rejects an increase in income tax. With a budget deficit expected to exceed 8% of GDP, consolidation measures are essential. Developments in Argentina, where a business-friendly president failed to consistently tackle the budget deficit, should serve as a warning signal for the new government in Brazil.

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