Rousseff faces runoff in Brazil election

SAO PAULO, (Reuters) – Ruling party candidate Dilma  Rousseff placed a strong first in Brazil’s presidential  election yesterday, but she will face a runoff after some  voters were turned off at the last minute by a corruption  scandal and her views on social issues.

Rousseff, a former Marxist guerrilla who was handpicked by  President Luiz Inacio Lula da Silva to continue the center-left  economic policies that have made Brazil one of the world’s  hottest emerging markets, had 46.6 percent of valid votes with  98 percent of ballots counted.

Brazil's ruling Workers' Party presidential candidate Dilma Rousseff (C), President Luiz Inacio Lula da Silva (L) and Sao Paulo's governor candidate Aloizio Mercadante attend a campaign rally in Sao Bernardo do Campo October 2, 2010. Brazil will hold general elections on Sunday. REUTERS/Paulo Whitaker

That result left her unable to get the 50 percent of valid  votes she needed to avoid a runoff vote between the top two  candidates on Oct. 31, election regulators said. Rousseff will  face her nearest rival, former Sao Paulo state governor Jose  Serra, who won 32.7 percent of the votes.

An unexpected late surge by a third candidate, the Green  Party’s Marina Silva, came largely at Rousseff’s expense. Silva  had 19.5 percent of valid ballots and her supporters will now  be a highly prized voting bloc in the runoff.

Rousseff is favored to beat Serra in the runoff and become  the first woman to lead Brazil, although a first-round victory  would have given her a stronger mandate to push through reforms  such as changes to Brazil’s onerous tax laws.

Her campaign has been helped by red-hot economic growth and  Lula’s constant support. Neither Rousseff nor Serra is seen  deviating from the mix of social programs and investor-friendly  policies that have made Lula wildly popular, and confident  Brazilian markets rallied in the run-up to the vote.

Yet recent allegations of a kickback scheme involving a  former top aide to Rousseff, plus questions among evangelical  Christians about her positions on abortion and other social  issues, appear to have instilled just enough doubt in voters’  minds to cost her a first-round victory.

Rousseff had spent the past month well above the 50 percent  support level in pre-election polls, and the disappointing  performance is likely to revive questions about her relative  lack of charisma and thin executive experience.

Valdeci Baiao da Silva, a security officer in Brasilia,  said the good economic times had made him a Lula supporter —  but he voted for Serra on Sunday because Rousseff seemed  unprepared and unpredictable.

“I think she might even disappoint (Lula),” he said.

At a church service in Brasilia yesterday, Pastor Otaviano  Miguel da Silva urged his followers not to vote for candidates  from Rousseff’s ruling Workers’ Party because “it approves of  homosexuality, lesbianism, and is in favor of abortion.”

Brazil is overwhelmingly Catholic, but evangelicals are  growing in number and pre-election polls showed them abandoning  Rousseff in significant numbers as the vote grew closer.

Rousseff met with church leaders last week and affirmed her  support for existing laws, but she may not have been able to  overcome Internet videos showing previous statements in which  she appeared to support the decriminalization of abortion.

Green Party candidate Silva, herself an evangelical,  appeared to be the main beneficiary of the last-minute shift.

A former environment minister who quit Lula’s government in  2008 after a dispute over development plans in the Amazon,  Silva had previously said she would not make an endorsement in  a runoff — though her new position as a potential kingmaker  could cause her to change her mind.

Rousseff still seen
winning runoff

Serra, a former Sao Paulo governor and one of Brazil’s most  experienced politicians, now has an extra four weeks to chip  away at Rousseff’s lead. Still, political analysts say a major  scandal involving Rousseff directly would be virtually the only  scenario under which she could lose a runoff.

Lula will spend the coming weeks touting his  accomplishments — including 20 million people lifted out of  poverty since 2003 — and telling voters that Rousseff is the  best candidate for the job.

Runoffs are common in Brazil — Lula faced them in 2002 and  2006, and emerged with a strong mandate in both cases — and  Rousseff is expected to take victory.

“This is an electoral climate that favors the incumbent  party,” political analyst Luiz Piva said. “Brazilians are  generally very happy with their government.”

Investors have been happy too. Brazil’s stock market, bonds  and currency have all remained strong in the run-up to the vote  — a marked contrast to the panic that preceded the 2002  election of Lula, a former radical.

Under Lula’s mix of social welfare policies and generally  investor-friendly economic management, Brazil has witnessed the  rapid growth of a middle class that is snapping up cars, houses  and other goods in record numbers.

The country has also joined Russia, India and China in the  “BRIC” group of emerging powers that are gaining in influence,  especially as more developed economies have stagnated.

Rousseff, a career civil servant who had never run for  elected office, has vowed to focus on improving Brazil’s woeful  infrastructure — especially as the country prepares to host  the World Cup in 2014 and the Olympics in 2016.