Brazil braced for tense presidential runoff between Lula and Bolsonaro

Brazil is braced for a tense presidential runoff after a closely fought first-round vote set up a showdown between two of Latin America’s most divisive politicians.

While leftwing challenger Luiz Inácio Lula da Silva came out on top with 48.4 per cent of valid ballots cast on Sunday, incumbent leader Jair Bolsonaro will be buoyed by a performance that defied many assumptions.

The far-right populist surprised pundits by claiming a 43.2 per cent share of the vote, higher than most opinion polls had predicted.

The race now goes to a second round on October 30 and analysts believe both men will tack to the middle ground in order to broaden their appeal and win over backers of eliminated candidates.

“Both Bolsonaro and Lula will need to get out of their comfort zone and try to capture votes outside of their supporter base. The expectation is for Lula to move even further towards the centre in an attempt to capture some support from the new Congress.

“He also may need to tone down talk on reverting [pro-business] reforms,” said Daniela da Costa-Bulthuis, a portfolio manager at Robeco.

“Bolsonaro, on the other hand, will need to address the environmental concerns in Brazil and drop the confrontational tone against the Supreme Court and the electoral system,” she added.

A vendor holds up the front page of one of Brazil’s national newspapers on Monday after the first round of the country’s presidential elections © AFP via Getty Images

By persistently alleging without solid evidence that Brazil’s electronic ballot machines are vulnerable to fraud, the rightwinger has fed fears he may reject defeat.

Opponents are wary of the potential for disorder on the streets from the more radicalised fans of Bolsonaro, who has previously said that “only God” can remove him from office.

But after the results were counted on Sunday, the conservative former army captain appeared to acknowledge the need for a more conciliatory tone.

“I understand that among part of the population there is a desire for change,” he said. “But sometimes change can be for the worse. We tried during the campaign to demonstrate this, but it seems that it did not reach the most important layer of society.”

The president received a boost as allies scored big wins in congressional and gubernatorial races. In the Senate, his Liberal party picked up eight new seats out of the 27 available on Sunday. In a lower house dominated by the right, Bolsonaro’s party will be the single biggest with 99 out of 513 seats.

Allies of the president also clinched governorships in Rio de Janeiro and Brasília. In São Paulo, a second round run-off for the governorship is likely to elect a bolsonarista.

“Bolsonaro has better strategic support in key states, such as São Paulo and Rio de Janeiro. He also has momentum with the better-than-expected result,” said Lucas de Aragão, partner at Arko Advice. “Lula is still the slight favourite, but the race will be competitive.”

Financial markets appeared to welcome the prospect of Lula diluting his state-centric prescriptions for the economy. The Brazilian real climbed 4.5 per cent against the US dollar on Monday morning and the country’s Bovespa stock index was up 4 per cent.

But supporters of the veteran leftwinger could not conceal their disappointment. Going into the count, some opinion surveys had suggested the two-term former president could win outright in the first round by attaining more than half of ballots.

“I feel lost. I can’t understand how the people were able to vote the way they did,” said Maiara Fernanda Barbosa, a lawyer from Minas Gerais, a bellwether state where Lula won a majority. “It is sad to see people endorse violence, prejudice, racism.”

However, Lula struck a defiant note and said he was relishing the prospect of another month on the stump.

“It will be the first chance for us to have a head-to-head debate with the president of the republic, to find out if he will continue to tell lies or if he will, at least once in his life, speak the truth to the Brazilian people,” the 76-year-old declared on Sunday evening.

The former trade unionist has sought to portray himself as a statesman and moderate, adept in building consensus and representing the nation on the international stage. This message, however, did not seem to resonate in Brazil’s wealthier states, such as São Paulo.

Some suggested that voters remembered Lula’s involvement in the Lava Jato corruption scandal, which saw him spend almost two years in prison before his convictions were annulled by the supreme court.

“Regardless of the result, it is good to see that half the population thinks that to have a thief in power is not the best option,” said one Bolsonaro supporter, who works in a bank in São Paulo.

Eduardo Mello, a political scientist at the Getulio Vargas Foundation, said Lula had failed to gain traction in the populous and relatively wealthy south-eastern states of São Paulo and Rio de Janeiro.

“His potential supporters [there] are urban low middle-class voters, more moderate and less ideological. It is likely that these voters didn’t want to vote for a candidate whose only point in the campaign was that he isn’t a ‘fascist’ and he isn’t Bolsonaro,” he said.

“They will need to see him make concrete plans on economic recovery, growth and stability,” he added.

Lula speaks to supporters
Lula speaks to supporters on Monday after winning the first round of Brazil’s election © AFP via Getty Images

Known for his pragmatism in government, Lula now faces the urgent task of building as many alliances as possible before the tiebreaker.

Both contenders will be vying for the votes of the third- and fourth-placed candidates, centrist Simone Tebet and leftwinger Ciro Gomes, who gained about 7 per cent between them.

“Where those votes go for the second round is key. If the majority of Ciro’s votes . . . are transferred to Lula, he becomes the favourite,” said Hussein Kalout, a former official in the administration of Michel Temer, Bolsonaro’s predecessor as president.

Ahead of the decisive vote, many will now be questioning the value of Brazil’s opinion polls, which dramatically underestimated Bolsonaro’s popularity.

Most mainstream pollsters gave Lula a 10 percentage point lead before the race. They were also proven wrong in several gubernatorial races, notably São Paulo.

“I suspect they are underrepresenting rural and small-city voters in the countryside . . . If this is true, this is a problem because the urban-rural divide in the country is growing, and their methodologies need to keep up,” said Mello.

“Or it might be that Bolsonaro’s supporters are simply not responding to polls because they don’t trust them. If this is the case, it is a harder problem to fix.”

Additional reporting by Kate Duguid

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