WSJ on tomorrow's Brazilian election.
October 25, 2002
BRAZILIAN ELECTIONS
Brazil's Left-Wing Candidate Likely to Win by a Landslide
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
Leftist candidate Luiz Inacia Lula da Silva is heading
into the final weekend of the presidential runoff race
with leads over the government-backed candidate, Jose
Serra, ranging from 28% to 30%, according to the
latest opinion polls.
Even the lowest of the leads
could create a landslide victory
Sunday for Mr. da Silva that
would turn him into the head
of Brazil's first-ever elected
leftist government.
A Vox Populi poll released late
Thursday showed Mr. da
Silva, the one-time radical union organizer, supported by 60% of those polled, while
Mr. Serra was backed by 32%.
Mr. Serra gets his last chance to catch Mr. da Silva on Friday in the last televised
debate before Sunday's runoff. Trailing badly in the polls, Mr. Serra has turned to
scare tactics, warning Brazilians that electing his rival will bring economic chaos and
hyperinflation. He has repeatedly accused his rival of running away from an open debate on the issues. "It's a
pity that we'll only have one debate but it's better than nothing," Mr. Serra told reporters while preparing for
Friday's debate.
Meanwhile, Brazilian stocks and currency rose Friday, ahead of the likely leftist election victory.
Brazil's currency had been battered in recent months by investor
fears of a leftist victory. On Oct. 10, three days after the first
round of elections, it reached an all-time low of 3.99 reals to the
dollar -- equivalent to a 42-% loss since the beginning of the year.
But since then the real gained almost 7% and closed at 3.73 to the
dollar on Friday, while stocks at Sao Paulo's Bovespa index rose
2.2% on the last day of trading before the runoff elections.
Investors have priced in the almost certain da Silva win and also feel some relief after repeated pledges by the
former union leader to stick to fiscal responsibility and inflation-busting policies, economist say.
"The market is giving Lula the benefit of the doubt," Odair Abate, chief economist at Lloyds Bank in Sao Paulo
said The Associated Press. "But now Lula and his economic team will have to keep fiscal targets and maintain
the rules of the game."
The International Monetary Fund linked a US$30.4 billion accord with Brazil announced in August to a pledge
by presidential candidates to keep a 3.75-% budget surplus before interest payments through 2003.
Market movers in Sao Paulo, however, are anxiously awaiting a rapid announcement of key economic
government officials in case of a da Silva victory, Nicola Tingas, chief economist at West LB in Sao Paulo
said.
The President of Mr. da Silva's Workers Party, Jose Dirceu, on Friday already made a step toward meeting
market wishes for clarity.
In case of an election victory on Sunday, Mr.da Silva would announce a transition team on Tuesday, Mr.
Dirceu said. Yet, members of the transition team would not automatically coincide with cabinet members after
the president is sworn in January, the PT said earlier.
Updated October 25, 2002 8:22 p.m. EDT
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