Brazil stock market upbeat over electoral win

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AFP |

Brazil’s stock market soared Monday after far-right firebrand Jair Bolsonaro handily won the first round of the presidential election with a promise of sweeping economic reforms. While the results energized investors, the election has deeply polarized Brazil, leaving voters with a stark choice in an October 28 run-off that will now take place between Bolsonaro and leftist Fernando Haddad.

At opening, Brazil’s Ibovespa index jumped more than six percent. It later stabilized around four percent higher. An ultra-conservative former paratrooper, Bolsonaro easily beat out a dozen other presidential candidates but did not garner enough votes to avoid a second-round showdown with Haddad, the former mayor of Sao Paulo.

Bolsonaro won 46 percent of the vote to Haddad’s 29 percent, according to official results, which exceeded pollster’s predictions. Bolsonaro charged that “polling problems” had cheated him of outright victory in the first round.

Bolsonaro, for his part, said on Facebook he wanted to “put politics at the service of Brazilians, and no longer put Brazilians at the service of politicians.”

His small ultraconservative Social Liberal Party also swelled considerably in Sunday’s general election, going from eight seats to 52 in the 513-seat lower house and debuting with four senators elected to the 81-seat upper house.

One of Bolsonaro’s sons was elected a senator, and another was re-elected to the Chamber of Deputies. Analyst Sylvio Costa of the Congresso em Foco website called the result a pro-Bolsonaro “tsunami.”

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If Bolsonaro ends up as president, he will be able to rely on allied conservative deputies to help pass legislation making good on his pledges to crush crime, tackle corruption and cut climbing public debt through privatizations.

Divided Electorate

But Bolsonaro faces resolute opposition from a large number of Brazilians horrified at his comments in favor of torture and Brazil’s 1964-1985 military dictatorship. He is also reviled by many for remarks degrading women, making light of rape and slamming homosexuality.

Bolsonaro won 46 percent of the vote to Haddad’s 29 percent, according to official results, which exceeded pollster’s predictions. Bolsonaro charged that “polling problems” had cheated him of outright victory in the first round.

However. a big chunk of the electorate also rejects Haddad’s Workers Party, once broadly popular for boom times under former president Luiz Inacio Lula da Silva but now blamed for a subsequent recession that was the country’s worst on record.

Whoever wins the presidency will be confronted with implacable hostility from a big part of the population of 210 million, making governing difficult. Deepening divisions between the wealthier south and the poorer north of the country appear inevitable — and, some observers say, dangerous.

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Reviving the economy is seen as vital, and it’s there that Bolsonaro has proved canny by tapping a respected US-educated neoliberal economist, Paulo Guedes, as his advisor. Guedes, who proposes a free-market shock treatment to upend Brazil’s longstanding protectionism, is likely to be finance minister at the head of a “superministry” overseeing the economy, industry, trade, investment and planning.

It was that prospect that spurred Brazil’s markets. Surveys suggest Bolsonaro has the edge going into the run-off. Haddad was expected to close the big gap by picking up substantial support from the defeated candidates, but it was unclear by how much.

One of Bolsonaro’s sons was elected a senator, and another was re-elected to the Chamber of Deputies. Analyst Sylvio Costa of the Congresso em Foco website called the result a pro-Bolsonaro “tsunami.”

“Bolsonaro is favored to win in a runoff and, as such, we are increasing his odds of winning from 60 percent to 75 percent,” the Eurasia Group political analysis firm said in a briefing note. Political analyst Fernando Meireles of Minas Gerais Federal University said: “The probability of Bolsonaro coming out victorious seems pretty big right now.”

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Reaching Out

Both candidates were starting to reach out to centrists in a bid to broaden their appeal. “We are going to speak with all the democratic forces in the country,” Haddad said as he left a prison where he held his weekly consultation with ex-president Lula, who is serving a 12-year prison term for corruption.

Haddad said he already spoke with the third-placed candidate knocked out of the race Sunday, center-left politician Ciro Gomes. “We are totally prepared to modify parts of our program so it is more representative of the democratic alliance we want to build,” Haddad said.

Bolsonaro, for his part, said on Facebook he wanted to “put politics at the service of Brazilians, and no longer put Brazilians at the service of politicians.”

© Agence France-Presse

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