Posted: 31 Oct 2010 05:36 PM PDT
By Sibel Tinar, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – Sunday has been the day of victory for Dilma Rousseff, who is elected Brazil’s next president to succeedLuiz Inácio Lula da Silva, after beating her rival José Serra by over ten points in the run-off round of the presidential elections.
After failing to secure the absolute majority of the votes in the first round of elections on October 3rd, which sent the race to the second round, Lula’s protégée Dilma has secured 56 percent of the votes as opposed to Serra’s 44 percent, and will be Brazil’s first female president when she takes office on January 1st, 2011.
The elections, in which 99.1 million valid ballots were cast, began at 8AM in the morning, and the vote count started after the last ballots closed at 7PM. The Tribunal Superior Eleitoral (TSE) has called the
elections in favor of Dilma shortly after 8PM, when about ninety percent of the ballot count was complete, due to difference between the candidates’ points being over ten percent.
Outside of the country, over 200,000 Brazilians have cast ballots in 101 cities in 86 countries, and the results that came from overseas showed a preference towards Serra instead of Dilma.
Dilma led in fifteen states, including Rio de Janeiro, most states in the North and all in the Northeast, where Lula is from, as well as the Federal District (i.e. Brasília), where Serra secured the majority of votes in eleven states, primarily São Paulo, where he held the positions of mayor and governor, and all Southern states, including Rio Grande do Sul, where Dilma used to be based.
Out of the 135.8 million voters of Brazil, where voting is mandatory for all citizens between the ages of 18 and seventy, 29 million have opted to exercise their right for abstention, 4.7 million voted nulo (null), and 2.4 million voted branco (blank). The number of abstentions has increased to 21.2 percent in this round from 18 percent in the first round, and while considered “normal” by the TSE, it is attributed to the run-off round falling on an extended holiday weekend, as well as the tendency for some people to only vote in the first round.
Announcing: “I have the pride and satisfaction of saying that the elections passed in a peaceful and tranquil climate across the country”, the president of TSE Ricardo Lewandowski has also praised the technology that allowed them to declare the results within about an hour.
Chosen by current president Lula as his successor, and the candidate from Partido dos Trabalhadores (PT, Workers’ Party), Dilma, 62, has never held elected office before, but worked closely with Lula as his former Minister of Energy and Mines, as well as his Chief of Staff.
While some were concerned that she lacked Lula’s charisma and natural leadership ability, she was initially unknown to most voters, but gradually increased her support as the official campaigning started in July, and Lula strategically used his immense popularity in her favor by associating himself with her name and image.
Dilma Rousseff will be the fourth female president in Latin America, after Chile’s Michelle Bachelet, Argentina’s Cristina Fernández de Kirchner, and Costa Rica’s Laura Chinchilla. She is expected to continue Lula’s policies, but by keeping a lower profile on the international scene, and with a bigger focus on economic and domestic policies.
What Does Dilma Rousseff’s Win Mean for the Brazil Real Estate Investor?
As widely predicted in the pre-election polls, it was announced in the late hours of Sunday 31st October that Dilma Rousseff of the Workers’ Party (Partido dos Trabalhadores) will be the new President of Brazil.
With a background as an economist, she was a socialist and formed a fundamental part in the fight against military dictatorship in the 1970s. Her mainstream political career truly began after this period in the state of Rio Grande do Sul where she helped create the Democratic Labour Party (Partido Democrático Trabalhista) and subsequently became Treasury Secretary until the year 2000, when she joined the Workers’ Party. Lula da Silva appointed her Minister of Energy in 2002 and, as a result of the resignation José Dirceu due to a corruption scandal, she became Chief of Staff in 2005 until March of this year when her run for presidency was announced.
As a result of taking over the mantel of da Silva, who leaves office with an unprecedented approval rating of 81 percent, she has been referred as the future ‘automatic pilot president’ and ‘Lula with a skirt’ by media pundits – something which has been denied vehemently. Regardless of this, Rousseff will now preside over a country that has made some notable achievements since the last change of power which will serve to solidify the business / investment environment of the country – examples include the creation of over 15 million jobs (particularly in the less wealthier north-east regions); the removal of 13 million people from absolute poverty; social and housing programmes; the ever-rising middle class with over 30 million joining the class C amongst others.
Whilst many debate that Lula too entered into power at the right on the back of former president Fernando Henrique Cardoso’s successful policies – the above facts must be commended. Nevertheless, Rousseff will not be out her challenges such as necessary improvements required to the country’s education system; improving infrastructure and the encouragement of further innovation (Brazil is lagging considerably behind many of its emerging economy counterparts including China and India).
Investors and business owners in the country have not seen a great deal of change in the marketplaces across the country despite the election decision being postponed earlier in October – indeed, private equity and M&A activity has continued to grow, contrary to what was previously the case in the build up to an election in Brazil. Her pledges with regards to the Brazilian economy of relevance to real estate investors are as follows:* the continuation of social welfare and housing programmes such as the ‘Bolsa Família’ and the ‘Minha Casa, Minha Vida’ housing programmes (phase 2 is currently in the pre-launch stages);
* a more flexible state sector, while actively supporting private enterprise (something of which has been questioned by economic commentators);
* reduce the inflation by half a percentage point to 4 percent by 2012 – although she has emphasised the need for this to be done in a careful and gradual manner;
* increase national savings levels;
* reduce public sector wage levels;
* maintain central bank autonomy, which has proven to be a success;
* rid the country of extreme poverty by 2016;
* cut the state spending to enable the interest rates to be reduced in the coming years;
* impose additional taxes on capital inflows, to limit currency overvaluation (something of which Central Bank chief Henrique Meirelles recently stated as ‘a possibility’).