Policy Alert #86 | October 28, 2014

On Sunday, Brazilian President Dilma Rousseff won her second term in a hotly contested runoff election against the center-right Social Democratic Party’s candidate Aecio Neves. In this Policy Alert, we examine commentary from Brazil, China, Russia, India, and Japan on one of the tightest races in Brazil’s politics in recent years.

BRAZIL

Brazilian media focused on the unusually heated and polarizing campaign, the apparent regional divide between the poorer north and richer south, and the negative reaction of international markets to Dilma Rousseff’s victory over Aécio Neves in Sunday’s second round.

• The unusually harsh campaign run by both Rousseff and Neves seemed to coalesce into a harder opposition by the defeated Brazilian Social Democracy Party (PSDB) with Neves’s vice-presidential candidate Aloysio Nunes Ferreira declaring that Rousseff “doesn’t deserve a honeymoon period” while promising a firm opposition.
• Many Brazilians also worry that a political fault line is emerging between the poorer northern states-all but one won by Rousseff -and the more prosperous southern states where Aécio won all but two states. The newspaper Estadão ran a piece seeking to refute that and other myths from the election, showing that while Rousseff was dominant in the north and northeast, she was extremely competitive in the south, a fact belied by the state level maps.
• Markets initially reacted negatively to President Rousseff’s victory. The Bovespa-Brazil’s main stock market-fell sharply on Monday after rising and falling in opposition to the polls through the election while the Brazilian real dropped against the U.S. dollar. However, a growing consensus that Rousseff will appoint a more market-friendly Finance Minister has begun to reverse that trend.
• For her part, President Rousseff called for unity while expressing a willingness to reach out to work with the opposition in her belief that “that the clash of ideas can create room for consensus,” and promised to be “a much better president than I have been until now.”

CHINA

Chinese officials congratulated President Rousseff on her reelection and emphasized the importance of growing Sino-Brazilian relations.

• Chinese President Xi Jinping on Monday congratulated Dilma Rousseff on her reelection, pledging to further promote relations between China and the South American nation. “I attachgreat importance to developing China-Brazil relations, and am willing to make concerted efforts with you to strive for sustained and rapid development of the comprehensive strategic partnership between China and Brazil,” he added.
• China vowed to “advance its all-round strategic partnership with Brazil,” according to Chinese Foreign Ministry Spokeswoman Hua Chunying. Hua said that “China has always attached great importance to and perceived its relationship with Brazil from a long-term, strategic height” and that “China is ready to further deepen mutual trust, increase multi-dimensional cooperation and lift its level of practical cooperation with Brazil.”
• In an interview with China Daily, Lourdes Casanova, lecturer at Cornell’s Samuel Curtis Johnson Graduate School of Management stated that Brazil needs its own version of the ‘China Dream.’ “The ‘Chinese dream’ is to say, Chinese citizens aspire to something bigger than themselves” to fight for a better world, a better China and a better future for their children,” Casanova said. “As of now, we see the Brazil dream as a combination of things: The inspirational attitude of the American dream, aspects of the welfare state from the European dream, and of course, a bit of the China dream.”
• Government- run Xinhua warned that “a priority that the new government needs to give to economic revival is to calibrate its economic policies, win back market confidence and realize sustainable development of the national economy.”

RUSSIA

Russian President Vladimir Putin congratulated President Rousseff on her reelection and expressed hopes to continue furthering Russian-Brazilian relations.

• According to the Kremlin’s website, “Mr. Putin said he values highly the attention Ms. Rousseff gives to the strategic partnership between the two countries and confirmed his readiness to continue constructive dialogue, active joint work to take bilateral cooperation in different areas even further, and continue cooperation within the UN, G20, BRICS group and other multilateral organizations.”
• In the state-run RIA Novosti, Daria Chernyshova wrote that the election results reveal Brazil has “two groups with two ideologies regarding the development and social situation in the country… and the others, who are in favor of the not so liberal, who want the state to have an important position in pushing for development, but the kind of development with social inclusion.”

INDIA

While Prime Minister Narendra Modi offered a personal congratulatory message to President Rousseff, Indian newspapers predicted many challenges ahead for the new president.

• Prime Minister Modi congratulated Rousseff on her re-election via Twitter, saying “I look forward to continuing to work with @dilmabr to strengthen India-Brazil relations in the years to come.”
• The Hindu called Sunday’s election “a replay of the political script in Latin America“-the victories of leftist parties despite their poor economic performances. “The term anti-incumbency seems almost alien to the Latin American lexicon.”
• The Pioneer offered a different view, saying that “Brazil has voted for continuity overall, but…also for a change in the ways of governance.” In forming a coalition government, President Rousseff now faces a difficult task of keeping her promise of social welfare expansion to the poor while working with the center-right opposition parties backed by the middle class who favors free markets and free enterprise.
• The Indian Express argued that President Rousseff must “forge alliances” with opposition parties to “infuse new energy into Brazil’s deteriorating economy, which slid into recession in August, while attempting to reunite a country divided by a noxious campaign.”

JAPAN

Japanese news outlets remained pessimistic about President Rousseff’s second term.

• The Sankei Shimbun offered dim predictions for President Rousseff, who not only wonSunday’s election merely by a slim margin but also faces numerous challenges ahead, including economic recovery, public welfare expansion, and the Rio 2016 Olympics.
• The newspaper argued that unless President Rousseff offers concrete plans to address those challenges, her promises in the victory speech-becoming a “much better president” and uniting the country-will be empty words.