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October 9, 2018

Brazilian Presidential Election heads to Runoff on October 28th

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Brazilians went to the polls on Sunday to choose a new president among 13 contenders. Mr. Jair Bolsonaro ended with 46% of the vote with second place going to Mr. Fernando Haddad with 29% of the vote. Mr. Bolsonaro fell short of the 50% needed to win, so he and Mr. Haddad will now go to a runoff election on October 28th.

Mr. Bolsonaro is a 63-year-old far-right former army captain and 7 term lawmaker who promised to crack down on crime and corruption if elected. He was attacked and stabbed at a campaign rally in early September and remained off the campaign trail for the last month prior to the election as he recuperated from the attack.

In second place was Mr. Fernando Haddad from the Workers Party. Mr. Haddad is a former mayor of Sao Paulo and Education Minister. Mr. Haddad is a 55-year-old economist, lawyer, and history professor with little name recognition nationwide. He was chosen in August as the Workers Party candidate when the former president, Luiz Inacio Lula da Silva, was ruled ineligible to be a candidate because he is currently in prison on a corruption conviction.

Mr. Bolsonaro has the support of the financial markets for his promise to reform the tax and pension systems, curtail social spending, and his support for privatizing state-run industries in Brazil. In reality though, he has not laid out any specific economic plan to deal with Brazil's widening inequities and complex economic problems. He only offered simplistic platitudes that he would "fix the economy."

Many Brazilians blame the Workers Party, which won the presidency in every election since 2002, for the current economic problems and the widespread corruption of the political class. The vote for Bolsonaro was as much as a vote against the current political system as it was a vote in favor of his far-right rhetoric.

He also had the support of most of the agricultural community although he basically did not elaborate any policy at all toward agriculture. The agricultural community supported him because they detest the policies of the Workers Party and the party's support for the landless-poor and agrarian reform. The Workers Party spent most of their efforts in support small family farmers, with much less efforts directed to commercial farmers.

The Brazilian stock market reacted positively to Bolsonaro's strong showing with the Brazilian currency also strengthening. The currency ended Monday trading at 3.75 per dollar.