The World Cup is around the corner, and the elections too

Brazil is living a huge strike wave days before the World Cup. This week São Paulo came to a halt when bus drivers stopped working. And this friday president Dilma almost couldn't finish her speech in Brasilia due to the protest of public servants in strike. 

Protests during Dilma's speech this friday

It's no surprise that strikes occur at this time of the year, as each union has its own calendar of negotiations. But now organized workers are taking advantage of the World Cup to leverage their negotiation position, as the world's eyes are turned to Brazil. And that's been picked up by the Brazilian press. 

In this saturday's edition, Folha de S. Paulo calls attention to the fact that Dilma is even considering buying a terrain near the Itaquerão stadium in São Paulo to halt homeless protests in the region. The land would be designated to housing projects.

Both Folha and O Globo gave a fairly big space to former football player (now a member of the World Cup committee in Brazil) Ronaldo's quote about being ashamed of the country's lack of organization  -- it was the cover of Folha. Also on the World Cup, O Estado de S. Paulo revealed that the already very ambitious Brazilian project of receiving the World Cup in 12 cities was even more gigantic: it involved 17 cities, according to Fifa.

Elections

This week another survey for the presidential election was released. From Ibope/Nielsen, the results point out to a small recovery from Dilma Rousseff, from 37% to 40% of the vote intentions, but also a greater chance for a second round of elections, as her adversaries grew more. 

To wrap this post up, I just liked to call attention to Aloizio Mercadante's interview to Folha de S, Paulo two weeks ago. There, the current minister of the Civil House admitted the government's price control policy (a very unusual, not to say inefficient, way of halting inflation). He was later unauthorized by the Finance minister Guido Mantega, but my personal opinion is that mr. Mercadante's ideas resonate deeply in the Brazilian government, and are the first honest acknowledgment of the true Brazilian economic policy. (See Mercadante's interview).

Populist spree on the way to the campaign

As correctly predicted by the Brazilian media, the International Worker's Day changed the tone of president's Dilma Rousseff speech. She was more aggressive, stating that her government has done a lot in terms of raising the minimum salary and reducing unemployment (which is true -- the problem is that this policy is not sustainable). The president promised the continuity of the raises in salaries together with the state paid pensions, the correction of the income tax table (which, roughly put, means less people will pay taxes) and a 10% increase in the benefits paid by Bolsa Família, the main federal income distribution program.

Analysts heard by Folha de S. Paulo and O Globo saw this speech as a sign of weakness from the president. She had to put a monetary incentive for the voter because she was running short on allies they said. In fact, on the week before the announcement Dilma declared she was going to dispute the reelection with or without the political allies.

Eduardo Campos and Aécio Neves also promised
to raise salaries and expand income distribution

The media also calculated the cost the new measures would have for the next government. O Globo stated the total cost would amount to 9 billion reais, while Valor Econômico stated the government would have to find another 1.3 billion reais to make ends meet. The main point is that the populist announcement put further pressure on the government spending reducing the likelihood of any improvement of the country's rating and debt status for the next government, if Dilma is reelected.

Repercussion

On the following day of the speech, the Workers' Party officially chose Dilma as its candidate, thus putting an end to the rumors of former presidente Lula's return. Both candidates from the opposition parties, Eduardo Campos and Aécio Neves also promised, on their own way, to increase the minimum wage and to keep expanding and increasing the income distribution programs of the government. They also joined forces to file a lawsuit against Dilma, accusing the president of using the public time on the television to anticipate the political campaign.

The movements so far reveal the true intention from all candidates is to assure the sympathy from the core voters (the emerging middle class and the lower income workers) while remaining still to vague to discuss an actual plan for the country. This comes as no surprise to anyone that knows how the Brazilian elections work, but it is still somewhat disappointing as mr. Steinbruch (counselor to the presidency and CEO of the steel industry CSN) well put in his column today in Folha de S. Paulo.