23/10/26
Tight presidential runoff in store for Brazil
Tight presidential runoff in store for Brazil
Sao Paulo, 23 October (Argus) — Brazilian president Luiz Inacio Lula da Silva
has been narrowing the gap to senator Flavio Bolsonaro's lead in polls, but Lula
still lags his challenger just days before the presidential election runoff set
for 25 October. Opinion polls indicate that the contest remains close, with
right-wing Bolsonaro holding a narrow advantage. A 21 October average of
multiple polls by independent polling tracker Votendi put Bolsonaro at 51.2pc
and Lula at 48.8pc, a 2.4 percentage-point gap. The margin of error is of 2.2
percentage points. Bolsonaro finished the first round of votes with 47pc, ahead
of Lula's 45.16pc, leaving the two separated by about 2.2mn votes. Lula has
aimed at undecided voters to narrow the gap, with more than 33mn Brazilians not
voting in the first round. He sought to broaden his appeal since the first round
by embracing several proposals aimed at conservative-leaning voters, including
tax amnesty, debt renegotiation for microentrepreneurs and a lower age of
criminal responsibility. He also proposed free weekend bus travel and earlier
payment of the federal social welfare program, ideas that might appeal more to
his left-wing base. Labor policy has been one of the clearest dividing lines of
the campaign. Lula has championed a recently approved reduction in working
hours, while Bolsonaro's allies have argued for greater labor-market
flexibility, including wider use of hourly employment contracts. Meanwhile,
Bolsonaro has focused on the economy. He promises to cut R200bn-250bn
($39.8bn-49.7bn) from the federal budget, which financial markets view
favorably. He has also promised to allow individuals to suspend repayments on
personal debts for six months and for businesses to hold off for as long as a
year. While the election campaigns have featured little debate over energy ,
investors remain focused on potential implications. A Lula victory would likely
reinforce the government's approach to energy transition policies, including
support for biofuels and renewable energy investment. Bolsonaro has generally
favoured fewer environmental restrictions and could seek to accelerate licensing
processes for agriculture, mining and oil. Energy markets are unlikely to face
immediate disruptions under either candidate, given Brazil's importance as a
major exporter, but differences in environmental policy and infrastructure
investment could influence longer-term prospects. Corruption standoff Corruption
allegations have dominated the campaign's final stretch. Bolsonaro has focused
on the Operation Car Wash anti-corruption probe, which sent Lula to jail in 2018
on money laundering and corruption counts. He was later acquitted and freed in
2019. Lula's campaign has accused Bolsonaro of money laundering and corruption
scandals during the Covid-19 pandemic — when his father Jair Bolsonaro was
president. It also has tried to tie him to Rio de Janeiro's militia — illegal
mafia-like vigilante paramilitary groups. Bolsonaro denies any wrongdoing,
saying there is no material evidence of participation in criminal schemes,
extortion or the command of paramilitary groups. Lula has further challenged
Bolsonaro to disclose his banking and telephone records to prove he is clean,
saying he would do the same. Bolsonaro responded by demanding records for people
close to the president. Lula obliged. A recent Quaest survey found that 52pc of
voters disapproved of Bolsonaro, compared with 47pc for Lula. The same polling
shows that 44pc of voters fear a Bolsonaro return to power, against 42pc who
fear a Lula re-election. Institutional impact The runoff's result will have
lasting consequences for Brazil's institutions, as Bolsonaro promises to revamp
the judicial system and the constitution. Changes would include abolishing the
right to re-election for executive branch offices and extending presidential and
gubernatorial terms to five or six years from the current four. He says he would
also promote changes to the supreme court's structure and powers, redefining the
relationship between branches of government. Overhauling the judicial system or
parts of the constitution would require the backing of large congressional
majorities. Brazil also held legislative elections on 4 October, with
Bolsonaro's Liberal party securing sweeping victories . It will hold 121 seats
in the 513-member lower house and 28 in the 81-member senate. Therefore,
Bolsonaro would likely face little resistance to enact changes. The next
president will nominate four or five supreme court justices. One seat is vacant,
three others will retire by 2030 and judge Alexandre de Moraes could face
impeachment pressure from the right-leaning congress. Moraes is seen as a Lula
ally and emerged as a leading figure in the judiciary, especially for his role
in high-profile investigations involving Bolsonaro and his allies. Those
included the one that sent Jair Bolsonaro to jail for 27 years for attempting to
overturn the result of the 2022 election following his defeat to Lula. Flavio
Balsonaro would also likely attempt to win amnesty for his father in case he
wins. Foreign policy Bolsonaro would probably pursue closer relations with US
president Donald Trump after tariffs strained ties under Lula. His victory would
add Brazil to a regional shift towards the right, following conservative
electoral gains elsewhere including in Argentina, Chile, Colombia, Peru and
Ecuador. But it could weaken Brazil's claim to leadership in developing
economies globally and diminish its role in international climate negotiations.
By Lucas Parolin Send comments and request more information at
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