The 2010 presidential race has begun

With mayoral and local council elections over, now there begins the campaign for the elections of November 2010, when Brazilians will elect the presidency of the Republic, 27 state governors, 2/3 of the Federal Senate, and the entire Chamber of Deputies.

The 2010 campaign influences the analysis of the municipal elections. Most analyses are done with one eye on the analysis of the past (assessment of the results) and the other on the construction of the future (versions favoring this or that candidacy).

Surely the 2008 elections and the new mayors and council members will contribute their share of influence to the 2010 campaign. Yet much more influential will be the country’s recent economic and social situation, already suffering the impact of the international crisis. The crisis has reopened the debate over the economic policy of the Lula administration.

The assessment of the municipal elections

No sooner had the second round of the elections ended than a flood of analyses took by assault television networks and radio stations, newspapers, magazines and the Internet. Let us see some basic data.

In the first round of the 2008 election, the frontrunner in number of city halls won was the PMDB, with 1,195; the runner-up was the PSDB, with 783; the PT won 548 municipal governments.

In the previous municipal elections, the Workers’ Party records were the following: 411 (2004), 187 (2000), 116 (1996), 54 (1992), 37 (1988), and 2 (1982).

The parties that grew the most in absolute figures when it comes to the number of municipal governments, in relation to 2004, were the PMDB (with 138 additional mayoral offices); the PT with 137 additional mayoral offices), and the Brazilian Socialist Party (PSB), with 133 additional city halls. The PSDB, in turn, lost 88 city halls; and the also in the rightwing opposition DEM, lost 294 city halls.

Taking into consideration the demographics of Brazil’s 5,528 municipalities, we see the following: in 2008, the PT won the elections in 277 cities with less than 10,000 inhabitants (against 210 in 2004 and 77 in 2000); we won in 121 cities with a population between 10 and 20 thousand inhabitants (against 76 in 2004 and 28 and in 2000); we won in 82 cities with a population between 20 and 50 thousand inhabitants (against 58 in 2004 and 31 in 2008); we won in 45 cities with a population between 50 and 150 thousand inhabitants (against 36 in 2004 and 26 in 2000); and we won in 23 cities with 150 thousand-plus inhabitants (against 22 in 2004 and 25 in 2000).

Considering the total number of votes cast by the electorate, we have the following: in 2008, the PT obtained 16,486,025 votes (16.6%). This meant an advance in relation to the municipal elections of 2000 (when we received 11,938,734 and 14.1%, respectively) and a slight decrease in relation to 2004 (when we obtained 16,326,047 and 17.2%, respectively).
This result puts us in the second place, behind the PMDB (18,422,732 and 18.6%) and ahead of the PSDB (14,454,949 and 14.6%).

The DEM (Democrats) fell from 11.8% of the votes in 2004 to 9.4% of the votes in 2008. The PSDB fell from 16.5% of the votes in 2004 to 14.6% of the votes in 2008. The votes obtained by Kassab in São Paulo are approximately 23% of the Democrats total votes throughout Brazil. The DEM obtained this year 9,291,086 votes or 9.4% of the total (against 12,973,544 and 15.4% in 2000 and 11,238,408 and 11.8% in 2004).

It is important to mention that the PSDB was the most-voted party in the 1996 and 2000 municipal elections, while the PT was the most voted in the 2004 elections.

The Workers’ Party percentage decrease, in relation to the result obtained in 2004, is probably related to the fact that in 2008 the Party adopted a policy of alliances that limited its capacity to launch candidates in highly populated cities (Belo Horizonte, Goiânia, Campinas, São Luís, Duque de Caxias, João Pessoa, Cuiabá, Aracajú, São João do Meriti, Campos), which added up account for some 5,464,000 voters.

The PT comes in third place in the total number of city halls won and second in the overall number of votes. Nevertheless, it had the best performance in the 79 largest Brazilian cities (capital cities and/or those with 200 thousand-plus voters). In those 79 cities, the PT elected 13 mayors in the first round and raced in the second-round runoff election in another 15 cities. Tied in the second place are the PMDB and the PSDB: each party elected 9 mayors in the first round and raced in the second round in 11 cities.

The assessment of the second round

In the second-round runoff election, 26,843,804 voters returned to the ballot boxes in 29 cities, eleven of which were capital cities. The second round was a triple weighing of forces: between the government and the opposition; within the government’s power base, opposing the PT and the PMDB; and within the opposition, between José Serra and Aécio Neves.
The results of the second round (especially in the capital cities) consolidated the government’s victory. But the opposition’s leading figure held his ground, with the reelection of Kassab in São Paulo.

Regarding the dispute within the PSDB, Serra set out with an edge. He won in the capital of the state of São Paulo, leaving behind the PT and the very candidate officially chosen by his PSDB party (Geraldo Alckmin). Meanwhile, Aécio Neves sustained bitter defeats against the PT, in his Minas Gerais state countryside; and was politically scarred by the outcome of the Belo Horizonte election.

Inside the ruling coalition, there is a relative strengthening of the PMDB, the PSB and the PCdoB. The PCdoB is now running a capital city (Aracaju) and ran in the second round of another capital city (São Luís). Ciro Gomes, however, saw his candidate lose in the election for mayor of Fortaleza, the capital of Ceará, his main political stronghold.

Of the seven capital cities it governs today, the PT won in six of them in the first round. The exception was Belo Horizonte, where the local PT relinquished the right to nominate its own candidate and made a de facto coalition with the PSDB, in utter opposition to the Workers’ Party national policy of alliances, savoring a bitter defeat in the first round and winning in the runoff ballot thanks to the adversary’s weaknesses. At any rate, the PT comes out defeated from the Belo Horizonte election, and is now an ancillary force in a government where the toucans, as PSDB partisans are known, will be hegemonic. In upstate Sao Paulo, the PT that opposed the alliance with the PSDB fared well, which indicates that Mayor Pimentel will not find it easy to, even with the support of Aécio, become a gubernatorial candidate.

Of the 411 mayors-elect in 2004, the PT managed to be reelected in 230 cities, a 56-percent rate (in second comes the PSB, with 45.5%).

The main contest in the second round was, undoubtedly, the capital of São Paulo, where the PT only won when there was no second round (in 1988) and when we had the support of the PSDB against Maluf (in 2000).

The assessment of the big media

According to newspaper Folha de S. Paulo, “the PT and the PSDB ended the election with similar outcomes. However, in the four last elections, the PT growth has made a rising curve, beating the rival in important rankings, as the total number of votes received and the electorate governed. In 1996, the party only had more mayoral votes than the PSDB in five states. In 2000, in six. In 2004, the map was split in two, with each party taking the lead in 13 states. This year, the PT was the most-voted party in 16 states. In the overall final count, the PT had 2 million more votes than its adversary did- 16.4 million against 14.4 million of the PSDB. It was the winner once again in the South and in the Northeast regions, but failed in the Southeast. The PSDB lost ground, but held its hegemony in Minas Gerais and São Paulo. In the latter, the toucans had 600 thousand votes more. Despite the probable showdown in 2010, the PT and the PSDB should see their current polarization made difficult by the growth of the PMDB. In 2008, for the first time in 16 years, the PMDB candidates were the most voted (18.4 million), taking the leadership that was the PT’s, in 2004, and the PSDB’s, in 2000 and 1996. The poor performance in the capital cities reduced the PT’s pace of growth. In 26 elections, the party had 6 wins, 3 short of 2004. And the triumphs occurred in Fortaleza, Recife, Porto Velho, Vitória, Rio Branco and Palmas -cities that, together, have 3.4 million voters, less than the city of Rio de Janeiro (4.6 million). The PSDB also dehydrated in the capitals- it elected 4 mayors against 5 in 2004. In January, it will administer São Luís, Cuiabá, Curitiba and Teresina, with an overall electorate that adds up to 2.75 million people. Still, considering the country as a whole, it won more cities than the PT- 785 against 560 municipalities.

Quite amazing is the editorial by newspaper O Globo, entitled “Messages to the PT”: “in a broader perspective, the PT seems to repeat the trajectory of parties that, as time goes by, start to be pushed to smaller urban centers, where the exercise of politics is customarily more crony-driven, less informed. Generally these are parties that once having reached power use the key to the public coffers shamelessly and with no parsimony”.

The editorial goes further: “it seems clear that in the three cities – São Paulo at the head – the PT that was defeated was that of the mensalão, of the aloprados, of the delúbios [allusions to different episodes of the corruption charges against the PT], of the setting up of apparatuses inside the public machine etc. It is in the larger urban centers where the most informed voter is, before whom the party’s image, in all likelihood, is still stained”.

Marco Antonio Villa, a historian at the service of the PSDB, follows the same line (Folha, Oct 28): “The army of the aloprados is preparing for combat. They know they cannot afford to lose privileged access to power. They no longer can survive away from it. And they will go to any lengths to continue for another four years (eight would be better) using and abusing of the perquisites produced in Brasília”.

O Estado de S.Paulo is cautious: “the result in the polls in the 26 capital cities in this municipal election signals to a balance of forces between the governor of São Paulo, José Serra (PSDB) and President Luiz Inácio Lula da Silva (PT) for the duel PSDB x PT in 2010. The petista, however, has a slight edge. If the presidential election were today, Lula – and, consequently, the petista candidate to the Planalto, the seat of government – would have 13 capital mayors on his side, against 10 supporting Serra – the most important PSDB name to the 2010 contest. In three municipalities – Belo Horizonte, Salvador and Manaus – , a preference for one or the other is still unclear”.

Analyses produced by the right, on the whole, state that the elections have positioned the opposition well for the 2010 elections; that Lula’s capacity to transfer votes was in 2008 lesser than what was imagined, and thus should be the same in 2010 too; that the PT did not fare well or at least much worse than it expected; and that the PMDB has become the guarantor of the next presidential race.

The analyses by the ultra-left (PCO, PCB, PSTU, PSOL, Consulta Popular and the likes) range from celebrating the PT defeats and licking the wounds made by a very poor electoral outcome, with some very rare exceptions, which impregnate its texts with ill humor in relation to the elections, the process, the people and, ultimately, reality. An example of that is the interview given to newspaper Brasil de Fato of October 6 by Plínio de Arruda Sampaio (PSOL) and Ricardo Gebrin (Consulta Popular). To Plínio, the result of the election “was a monstrous victory of the right and a monumental defeat of the left”. To Gebrin, the “major feature of this election was depoliticization”.

The analysis made by the Workers’ Party national board (www.pt.org.br) states that the elections were “a victory of the PT, of the Lula government and of the allied ruling coalition”. News agency Carta Maior, also aligned with the PT, states that “the 2008 electoral process ended with a clear coming together of conservatism under the wings of toucan José Serra”, yet points out that the PSDB-DEM front will confront difficulties to “wield the scepter of ‘change’”, since this front “has always positioned itself as the most combative native patron and ideological ventriloquist of the resurrection of laissez-faire and the corresponding downgrading of life’s public dimension in all of its spheres, from the economy to politics, from culture to subjectivity. It was that privatization bulldozer that has imploded now dragging the world capitalist system into a crisis only comparable to that of 1929 – or worse”.

Other dimensions of the analysis

The analysis of the 2008 election should take into account:

a) its three dimensions –one that is clearly local, one that is strongly state-related and still a third one that is explicitly national–, which have combined in different ways throughout the country, too big and complex to fit into excessively oversimplified explanations;

b) that there does not exist a direct and unequivocal relation between municipal and presidential elections. Between 2008 and 2010, much will happen, starting with the exercise of the new governments, which may reinforce or completely reverse the popular will expressed in 2008;

c) that the atmosphere in which the 2008 municipal elections took place is bound to be very distinct from the scenario looming for 2010, among other reasons because of the international crisis and its impacts on Brazil;

d) that there are profound differences across Brazilian municipalities. As cities grow in size, their social base diversifies itself, which calls for close examination of the political behavior of classes and fractions of classes. A phenomenon that is also permeated by a regional dimension, still little studied and accounted for, which makes the PT confront greater hardships in Paraná, Santa Catarina, Mato Grosso do Sul; and to make greater electoral accomplishments in the country’s northeast;

e) it is necessary to consider the difficulties of the PT in the capital cities of São Paulo and Rio de Janeiro and to what extent such difficulties are linked to the party’s difficult relationship with the middle classes – traditional and emerging –, including the crisis of 2005;

f) that –contrary to expectations and vows—electoral corruption, the buying of votes, frauds, and violence were very much present in the 2008 elections. Such reality had enormous influence on the performance of the left as a whole and of the PT in particular, in the elections for city councilmen/women, which will be the object of a specific analysis.

Lula’s political weight

The country’s overall atmosphere, which catapults Lula to an 80-percent popular approval rate%, benefited all executive office holders, regardless of their party. Because of that, the reelection rate, in 2008, was above 50%, the highest since 2000. Of the 20 capital city mayors that ran for reelection 19 were reelected (the exception was the mayor of Manaus).
In such an atmosphere, the question is not whether Lula’s support influenced the outcomes but, rather, how and for whom his influence worked, since every party in the ruling coalition fought for the president’s support. In fact, even the opposition parties tried to neutralize, or even “take a ride” on Lula’s popularity. True, they were not very successful at that: the PSDB, the DEM, and the PPS lost voters and city halls.

Newspaper O Estado de S. Paulo (Oct 29) confirms that during the Lula government there has been “a municipal dehydration of the opposition parties. In relation to the municipal electoral map of 2000, when toucan Fernando Henrique Cardoso was still the president, the PSDB, the DEM, and the PPS, the main opposition parties today, have already shrunk by 910 city halls”.

The sharpest fall “happened with the DEM, which is to command as of next year 532 cities less than it did in 2000, when it was still called PFL”. In 2000, “the then PFL won in 1,028 cities. Four years later, it shrank to 790. Since then, already with a new name and very strong opposition rhetoric against the federal government, the fall has been even more dramatic, with wins in only 496 cities, despite the win in São Paulo – the largest [city] of all.”

Among the toucans, “the drop was less intense on account of the control the party has of important regional governments, as São Paulo and Minas Gerais, and of the expectation of power for the 2010 presidential succession. After all, today, the party has in the governors of São Paulo, José Serra, and of Minas, Aécio Neves, two names with great political potential to race in the contest to succeed Lula. Nonetheless, the toucans have lost 204 cities since 2000”.

The smallest of the three opposition parties, the PPS “in 2000, had 166 city halls. (…) With Lula’s victory, the PPS joined the power base (…) leapt in 2004 to 306 city halls. But the PPS broke with the government that same year (…) In the opposition, the PPS shrank once again, falling now to 132 city halls”.

Lula’s influence is not magical, or automatic or exclusively in favor of the PT. In many places, the president of the Republic made a point of not taking part in the contest, especially in runoff elections where power base parties were the competitors. Thus, the PT loss does not prove, in some case it even confirms, how decisive Lula’s electoral influence can be. In a nutshell: of the 30 cities where there was a second round, the parties forming the ruling coalition won in 26. Of the 26 Brazilian capitals, the majority coalition governs 20.

The “victory” of the opposition

In 2008, the opposition lost municipal governments and some millions of votes, when compared to 2004. In spite of that, analysts connected to the opposition are celebrating the electoral result. The explanation? It could have been worse. Let us imagine what electoral balance one would be making, had the PT won in São Paulo, Salvador and Porto Alegre.

In the three cases, the PT lost against the incumbent mayor, who was reelected. In these three capitals, therefore, the previous status quo was maintained, with smaller margins in Porto Alegre and São Paulo, and a larger margin in Salvador.
That is, the outcome of the 2008 elections was not a victory of the opposition. Yet it kept alive the possibility that it might win in the presidential elections, as a) Lula will not run for the presidency in 2008; b) the PT did not make a quantum leap in terms of votes and cities governed; c) the possibility was maintained of driving a wedge into the government’s power base, through the allurement of some of the ruling coalition parties.

The right knows that, both in 2002 and 2006, “allied base” parties did not support Lula in the first round. In some cases, these parties did not officially support Lula even in the second-round runoff election.

The opposition’s plan for 2010 is to spur as many ruling coalition presidential candidacies as possible in the hope that the PSDB candidate will go to the second round in the first place.

The opposition also intends to coopt parties of the power base, from the very first round, for the oppositionist alliance. Part of the success of this cooptation operation requires, paradoxically, inflating the transaction value of potential allies.

That is what explains the insistence with which the PMDB is presented as the great winner of the elections, despite other possible analyses of the PMDB’s performance. According to O Estado de S. Paulo, allies “of Fernando Henrique in 2000, PMDB politicians won the administration of 1,257 cities. In the next election, in 2004, there was an inflection on account of the party’s delay to fully adhere to the new petista government. The PMDB lost 200 city governments, yet still won in 1,057 cities. Now, totally in line with the Lula government, the party strengthened itself again, with victories in 1,203 municipalities”.

In sum: measured by the same rule applied to the opposition, the PMDB is smaller today than in 2000; and it achieved what it has thanks to the government. True, this does not alter two facts: the PMDB got a larger number of votes and elected the largest number of mayors. However, it should be borne in mind, too, that there is no guarantee that the PMDB will march united in 2010. Something it failed to do in 1989, and has failed to do in all other presidential elections.

The opposition and the crisis

The opposition says that Lula did not transfer votes, but … a) privately, it hopes for a worsening of the economic crisis, which could hamper the government’s popularity and the chances of its candidate to the succession; and… b) publicly, it calls for the government to cut expenses.

According to Professor José Pastore (Oct 24), “without including interests, the bulk of federal expenditures has been with salaries and social work. In 2007, some R$ 110 billion were spent on the payroll and R$ 337 billion on social work, including social security”. Unable to defend a cut in interest-related expenses, Professor Pastore prefers to aim at the weakest: “in times of normalcy, Brazil practiced fast-growing social work that is quite justifiable in hours of serious crises. Where to find now the money to aid the most vulnerable if the crisis drags on? This is the most disastrous consequence of policies that, to ensure popularity, compromise sustainability”.

According to former Central Bank chairman Affonso Celso Pastore (Oct 29), “the Brazilian economy will have to go through an adjustment, one guided by an economic growth slowdown. If we have to make an adjustment in the current account, in the real exchange rate, we need to bring down domestic absorption. From what I have seen in the government’s latest statements, there is no mood to cut expenditures. Occasionally the president hints that if necessary he will cut them. However, as the Minister of Finance [Guido Mantega] has been a Keynesian ever since he was a little child, and prefers to raise expenditure in face of a crunch like this, this reduction in absorption will have to occur in the consumption of households and in investments. Unfortunately, more in investments”.

Summing up, the Pastores and part of the opposition defend growing less. How much science is there in that reasoning? The answer is in an article by another oppositionist, Professor Eliana Cardoso (Oct 30): “Life is a string of unpredictable events (…) the world is full of surprises, some momentous as the black swans of the Taleb: the destruction of the twin towers in New York, the tsunami in Indonesia and the American financial crisis. These are unpredictable events of a formidable impact, for which we invent explanations ex post facto”.

The government and the crisis

The government, which initially adopted a blasé attitude in face of the crisis, now says that it will be long, impacting and of unpredictable consequences, though it keeps on saying that the Brazilian economy is less vulnerable than in other circumstances.

Contradictorily, Brazil’s Central Bank (BACEN) has not altered its interest rates policy. Just days ago the Council for Monetary Policy kept the base rate at 13.75%. Or a real interest rate of 7.9% a year, which places Brazil in the first place (excluding Iceland).

As economist Ricardo Carneiro says, a decision that “goes counter to the decisions of the world’s principal central banks, whose attitude, in face of the threat [posed] by a crisis of great intensity, has been to reduce their base rates, some of which are already at negative levels, as in the American case”.

To Carneiro, the BACEN “conducts a policy that contradicts the set of measures put in place by the Government, after the crisis escalated (…): a reduction of reserve requirements; sales of local currency on the spot market and hedging against foreign exchange fluctuations; feeding credit lines to foreign trade with international reserves; assurance of credit volumes for several activities via public banks”.

If the objective of those measures is to prevent “a credit crunch”, what is “the rationale for keeping interest rates at such high levels? Wouldn’t it be more logical and coherent to reduce the base rate and discourage a race of the agents toward public bonds – in the case of Brazil, generously remunerated and risk-free?”.

There is no technical explanation for the BACEN’s decision. There is only a political explanation: Meireles shares the opinion according to which Brazil should not grow. And uses the Central Bank’s de facto autonomy to impose such opinion.

The BACEN is not alone

The Central Bank gained the company, recently, of the Union’s Advocacy General (AGU after the Portuguese acronym): both are going counter the government’s general policy.

Renato Simões, of the Workers’ Party national executive board, shows that the Union’s Advocacy General accepted “the most conservative of understandings on the scope of the Amnesty Law (…) To the AGU, Bill n. 6.683/79 sanctioned by the military at the early stages of the distension of the authoritarian regime, and Bill n. 9.104/95, which indemnifies families of those killed or missing in that period, bring ‘a spirit of reconciliation and national appeasement’ (sic) that might be ‘disturbed’ by the reopening of healed wounds, in the view of the organ”.

The decision by the AGU contradicts the government’s official position, according to which it is incumbent upon Justice to decide on the breadth of the Amnesty. And contradicts the idea, hegemonic in the human rights movement and in the Justice of countries like Spain, according to which crimes against humanity do not prescribe.

To Renato Simões, “the AGU may still reverse this position. It is on the defendants’ bench of Brazil’s history. It may shift to the active pole of action, leaving the sad condition of defendant to that of a restorer of a past we have inherited, and which we want to see reviewed”.

Upcoming moves

The political agenda for December and February is full: the election of the presidents of the Chamber of Deputies and the Senate, speculations on a ministerial reform, debate over the pre-salt oil fields, and the pace of the works under the PAC (growth acceleration programme).

In addition to the repercussions of phenomena stemming from the crisis, such as banking industry consolidations, mandatory vacations set by big companies, and losses incurred by pension funds. And the struggle for salaries, which a concerned editorial published by O Estado de S. Paulo on Oct 28 reported as being on the rise. On one of the repercussions of the crisis, Bernardo Kucinski wrote, “Total losses of the 350 complementary pension funds surpassed up to October R$ 40 billion, according to the Department for Complementary Retirement. What has saved us from an even bigger disaster was the government’s delay to authorize pension funds to invest abroad. Among those most affected is Previ –the Bank of Brazil pension fund–, which invested 65% of its assets in variable income. Its worth has shrunk from 140 billion reals in May to R$ 125 billion in September “.

The backdrop will be the debate over the economic policy, more precisely over the gains of the financial sector. As Professor Carlos Lessa recalls, there are resources available for heavy investing by the government and the private sector in the country’s productive sectors, by increasing expenditure: “in interest alone the Brazilian Central Bank pays R$ 170 billion, four times more the federal programme for education, budgeted at R$ 40 billion”.