July 22, 2014

No World Cup boost for Brazilian president’s reelection bid

The recently held World Cup in Brazil boosted the country’s global image but didn’t do much to help President Delma Rousseff’s reelection chances.

Brazilian President Dilma Rousseff’s path to reelection in October hit another bump this week when economists lowered their forecast for the country’s economic growth this year to under one percent, an ominous sign that Latin America’s largest economy is likely to continue sputtering.

A survey of approximately 100 economists by Brazil’s Central Bank released Monday showed that they pegged growth for 2014 at 0.97 percent. That is down from 1.05 percent last week and 1.16 percent one month ago.

The forecast follows a new poll that came out late last week where the gap between Rousseff and her main opponents in a potential runoff dwindled to the narrowest it has ever been.

All this comes a week after Brazil hosted the World Cup to much adulation, without major problems, and in doing so won the hearts of thousands of foreign visitors — and billions of people who watched on television.

For the moment though, that success does not appear to have translated into political gain for the country’s first female leader who invested enormous political capital in ensuring Brazil successfully host the tournament.

She was seen side-by-side with FIFA, the highly-secretive world soccer governing body, considered by many to be corrupt and a source of disdain among many Brazilians.

Rousseff’s main challenge is resurrecting an ailing economy, say observers, which has been sluggish for most of her first term.

That is in contrast to the expanding economy over which her predecessor and former boss Luiz Inácio Lula da Silva presided, which made Brazil a darling among developing nations.

According to the new poll from Datafolha, should the election go to a runoff — the last one did in 2010 — the gap between her and each of the two main opposition candidates is small. Rousseff drew 44 percent versus 40 percent for Aécio Neves , former governor of the state of Minas Gerais.

After the poll, the Eurasia Group noted in a research note that, “the tightening clearly occurred earlier than we anticipated, so a deteriorating economic outlook is probably a more important driver.”

It noted that measures such as business confidence, industrial production and growth forecasts have been falling so that “the odds of the Brazilian economy entering into a technical recession have clearly grown.”

Still, in the first round, Rousseff remains the favorite, with 36 percent of the vote, compared to 20 percent for Neves and eight percent for Eduardo Campos, former governor of Pernambuco state.

Her other advantage is that neither of her main opponents have widespread recognition or appeal here, and each has struggled to form a coherent message. She and her party are still credited with expanding the middle class.

The Eurasia Group gives Rousseff a 70 percent probability of getting reelected but cautions that could change.

Datafolha’s nationwide poll was conducted July 15 and 16, interviewing 5,377 individuals in 223 municipalities. It has a margin of error of plus or minus 2 percent.

It also shows that Rousseff has not recovered from the hit she took after last year’s nationwide protests over the quality of public services and corruption.

In the new poll, 32 percent of Brazilians think she is doing a good or great job. That is just two points from the 30 percent low she hit in June 2013 after protests shook the nation. A mere three months before that, 65 percent of Brazilians had rated her government good or great.

Rousseff’s current job approval is just two points higher than it was in a poll conducted just before the World Cup began on June 12. As recently as February, 41 percent thought she was doing a good or great job. So for the moment, it does not appear that the goodwill generated from the World Cup has benefited the incumbent.

Prior to the tournament, Brazil faced criticism that it might not be ready and over how it handled the organization. While much of the criticism remains valid, and Brazilians main concerns remain unaddressed, the tournament did go smoothly, at least if you ask foreigners.

In a separate Datafolha poll, Brazilians raved about the handling of the World Cup. Some 83 percent said that the organization of the tournament was good or great, and 92 percent said that the comfort of the stadiums was good or great.

Brazilian hospitality also rated highly with 95 percent calling it good or great.

Several reasons explain this. The month-long tournament saw no major logistical problems and provided some of the most exciting soccer matches in recent World Cup history.

Parties in neighborhoods like Vila Madalena and Copacabana were legendary. At times, Brazilian men even thought pretending to be foreigners would help them meet women.

But beyond both the debauchery and Brazilian hospitality, deeper reasons explain why the World Cup seemed to go smoothly. They are not necessarily ones though that locals are celebrating, another potential problem for Rousseff’s reelection.

Travel within Brazil was smooth for visitors in part because overall air traffic volume fell, not exactly a boon for the country’s economy.

ABEAR, the Brazilian Association of Airline Companies, said recently that airline passenger volume in Brazil fell by seven to eight percent during the month of the tournament.

Visitors could move around Brazilian cities without many problems in part because many cities decreed holidays on all days that Brazil’s team played matches.

Jorge Perreira, 52, who manages an antique bookstore in Rio de Janeiro, said at one branch there was no increase in sales, and at the other in downtown, there was a 50 percent drop.

Many colleagues who run other small businesses also suffered, he said.

“We expected much more movement,” he said.

He is the type of voter Rousseff cannot take for granted. Asked about the legacy of the World Cup, Perreira said that, “I don’t feel like there was much impact on my life. I expected it would be better.”

Protests were also smaller and less frequent than expected than what Brazil saw one year ago.

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