What's next for the Brazilian economy?
After some ups-and-downs, the Superior Electoral Court (TSE) has announced the leftist candidate, Luiz Inácio Lula da Silva, as the winner of the runoff election of Brazil’s election on October 28.
But the next president of Latin America’s largest economy will have his work cut out for him.
Brazil been in a state of limbo over the last few months, in anticipation of the general election.
Poll after poll showed that the Lula da Silva of the Workers’ Party was set to win the vote, and many became worried about a difficult handover of power.
The far-right incumbent president, Jair Bolsonaro, had been hinting that he would not accept the results if he lost.
And sure enough, Bolsonaro came up with all sorts of conspiracy allegations about the country’s 2022 general election as soon as the results of the first round were announced, making a runoff round necessary.
On October 30, it became clear that Lula da Silva had won with a not-so-overwhelming majority of 50.9% (to Bolsonaro’s 49.1%). The latter remained largely silent in the following days, only privately conceding defeat to the president of TSE.
He finally gave a half-hearted televised speech in which he implied that he would not challenge the results any further and would respect the constitution despite not formally conceding defeat.
Nevertheless, Bolsonaro supporters took to the streets in early November, especially in the south and southwest, where Bolsonaro and the Liberal Party are most popular, asking the army to interfere.
In an unprecedented turn in Brazilian politics, the military indeed made a comment about the election—albeit informally. The armed forces finally issued a report on November 9, stating that they did not find any faults with the electronic voting system during Brazil’s election.
As protests calm down, steps are being taken toward a constitutional transition of power. The nation’s president-elect has delivered a victory speech in São Paulo, which has been received well by many.
While stressing “the need for national unification,” according to Agência Brasil, he has named economic growth as one of his priorities. Lula da Silva has promised new jobs, especially for “the poor,” as well as increased wages and a revival of Brazil’s once-mighty economy.
At the same time, Brazil is struggling with social problems in terms of violence, women’s rights, and racism, which were mostly ignored or downplayed by Bolsonaro’s administration.
And Brazil’s transformation into a true developed nation cannot happen without addressing these issues.
“The president-elect said he is committed to policies to combat violence against women and equal pay for the same job, in addition to fighting racism and all forms of prejudice,” according to Agência Brasil.
Lula da Silva’s leftist political inclinations mean that there is a good chance that he will raise social spending, which will indeed improve social mobility.
But his administration needs to maintain a high degree of fiscal integrity and transparency regarding the government’s spending to attract foreign investors to the country.
Many factors including the lineup of Lula da Silva’s economic team remain unknown. We should wait until January 1, 2023, when the new president formally assumes office, to see how Brazil, its society, and its economy will develop under the new administration.