Washington’s Missing China Strategy
To Counter Beijing, the Biden Administration Needs to Decide What It Wants
After a campaign season with many surprising twists and turns, Dilma Rousseff was reelected president of Brazil on Sunday evening. The win brings her Workers’ Party (Partido dos Trabalhadores, or PT) its fourth presidential term in a row. Even so, the result was not a consequence of complacency among the electorate. Nor does it signal continuity to come. The Brazilian electorate was nearly evenly split; with all the votes counted just a few hours after polls closed, Rousseff has pulled in 51.64 percent of the valid vote and her rival, Aécio Neves of the Brazilian Social Democratic Party (PSDB), 48.36 percent. For that reason, the next term is likely to be the most difficult that the PT has ever faced.
The campaign began uneventfully. For months, Rousseff stayed well ahead of her two main challengers, Neves and Eduardo Campos of the Brazilian Socialist Party (PSB). When Campos died in a tragic plane crash in August, his charismatic vice president Marina Silva replaced him and briefly shot into first place. But Silva steadily lost supporters throughout the campaign season, thanks to both her own missteps and strong attacks from the PT, her former party. Enough voters jumped to Neves in the final days before the first round of voting that he won, becoming the standard-bearer for change in a face-off with Rousseff. Silva and the PSB pledged him their support.
The PT and PSDB have competed in every Brazilian presidential election since 1994. They represent genuine programmatic alternatives to each other, especially in economic policies and foreign relations. The PT leans left and favors more state intervention in the economy. Under it, public spending and the role of public banks have increased, and state planning agencies orient many sectors of the economy. In its foreign policy, the PT has focused on what it calls South-South relations, especially under former President Lula da Silva.
In contrast, the center-right PSDB is more market-oriented. It led privatization efforts in Brazil in the 1990s. (Former PSDB president Fernando Henrique Cardoso came to the presidency in 1994 on the strength of his inflation-fighting credentials.) These days, it continues to seek market solutions to Brazil’s economic problems and calls for greater economic participation by private actors. In terms of foreign policy, the PSDB would have reoriented Brazil’s foreign policy toward traditional global power centers, such as the United States.
Although Brazilian presidential elections generally come down to a simple bipartisan race, the country’s politics as a whole are much more complicated. When, in January, the country’s new congress is sworn in, 28 parties will be represented. Nine different parties won governorships. And that means that governing Brazil will require managing complex coalition politics that are both partisan and regional.
In partisan terms, Rousseff will have an easier time building a coalition than Neves would have had. Although her own PT won only 70 seats out of 512 in the lower house and 12 of 81 senate seats, parties that officially supported her candidacy won 304 and 53 of the seats, respectively. They are now likely to join her governing coalition, but they will try to extract as many concessions as possible for their formal support. In geographic terms, things are even trickier. Consider that a map of the second round’s results by state shows Rousseff winning almost all the states north of a line that cuts the poorer northern states from the wealthier southern ones. Neves won almost all the states below. Brazil’s federal system will require Rousseff to work with governors across the country, not least to solve immediate problems with water and electricity supply that stem from an ongoing drought as well as larger infrastructure deficits.
In other words, Rousseff will spend much of her second term (as she did her first), cajoling and threatening her coalition partners into supporting her legislative agenda. They gave her a couple of stinging defeats in her first term, including on votes on how to divide royalties from petroleum and gas among the states and on a new Forest Code. Although she might prefer to replace those partners, both the PT and PSDB have had to depend on the same set of “big parliamentary center” parties to reach a majority in the legislature. These parties are less programmatic than either of the presidential parties, and their members are only weakly disciplined. They seek control over key ministries and access to power. They can easily desert the governing coalition when they feel their interests are not respected—but no other parties have enough members with which to build a majority.
Rousseff won because of two economic bright spots: surprisingly strong employment and robust social assistance provision. But now she will have to take on a faltering economy and rising inflation. Economic growth has declined since the high point at the end of Lula’s second term, and the country has gone into recession over the last year. Large amounts of public spending on infrastructure projects and preparations for the World Cup failed to spur growth and even generated large protests in June and July of 2013. The financial and business sectors were pulling hard to replace Rousseff, and it is not clear how they will work with the government in her second term. Marquee firms such as the oil giant Petrobras were already stumbling under heavy debt and weak production figures before the newsmagazine Veja published accusations in the final days of the campaign that Lula and Rousseff knew of a giant corruption scheme at the firm. Perhaps the most important question of Rousseff’s second term is whether her approach to all of these problems will be to double down and defend her own and her co-partisans’ actions in the previous term or whether the second term will see some alterations in her economic approach.
In her victory speech on Sunday night, Rousseff stressed the need for the country to unite after the close result and to enter into dialogue to bridge the gaps that had opened during the long election season. She said that she had heard that the most repeated word of the campaign was change. Indeed, one of Rousseff’s own slogans was “More change, more future” (Mais mudanças, mais futuro). After winning, she promised to reform politics, combat corruption, and encourage local action to rejuvenate the industrial economy. Most Brazilians, including Neves’ supporters, probably do want those things, but it will be even harder for Rousseff to deliver them in her second term than it was in the first.