REUTERS - Ruling party candidate Dilma Rousseff placed a strong first in Brazil’s presidential election on Sunday but 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, won 46.9 percent of the valid votes.
She had needed 50 percent to avoid a runoff on Oct. 31 so she will now go up against her nearest rival, former Sao Paulo state governor Jose Serra, who won 32.6 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 19.3 percent of valid ballots and her supporters will now be a highly prized voting bloc in the second round.
Rousseff is favored to win the runoff and become the first woman to lead Brazil, although Serra now has four more weeks to rally support and chip away at her lead. A first-round victory would have given Rousseff a stronger mandate to push through reforms such as changes to Brazil’s onerous tax laws.
Visibly disappointed, the 62-year-old Rousseff sought to put a positive spin on the outcome, telling supporters that a second round would give her more time to detail her proposals.
“We are warriors, and we’re accustomed to challenges,” she said in a speech in Brasilia, flanked by her running mate and her party’s top brass. “We do well in second rounds.”
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, helping Brazilian markets to rally 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 because Rousseff seemed unprepared.
“I think she might even disappoint (Lula),” he said.
At a church service in Brasilia, 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.
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, Silva had 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. She said on Sunday night her party would meet to discuss its loyalties in a runoff.
Uphill battle for Serra
Serra, a former health minister and one of Brazil’s most experienced politicians, relished in the result.
“I am thrilled, but I’m not surprised,” he shouted to a cheering crowd of supporters in Sao Paulo. “Now we’re going to fight and we’re going to take victory.”
Serra, 68, has vowed to run a centrist, pro-business government. Yet he also believes in a strong state presence in some sectors, and his administration would likely be broadly similar in practice to Rousseff’s.
While the extension of the campaign marks a new lease on life for Serra, who ran a lackluster campaign until the final week, political analysts say he faces an uphill battle.
Lula will continue to tout his accomplishments—including 20 million people lifted out of poverty since 2003 -- and tell voters that Rousseff is the best candidate for the job.
Runoffs are common in Brazil—Lula won them in both 2002 and 2006 -- 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.
With the Brazilian real trading at a two-year high, some investors have speculated that the Lula government was waiting for the first-round vote to pass before announcing measures aimed at containing the currency.
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 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.
Some investors fear Rousseff could govern to the left of Lula, although her advisers have told Reuters she is unlikely to lead a major expansion of the state apart from in some strategic areas such as the energy sector.
Sunday also saw voting for local and regional races throughout Brazil that will determine the makeup of Congress. Rousseff’s 10-party coalition increased its majority in the Senate and will likely have more than the 60 percent threshold needed to approve constitutional reforms.
The winner of the runoff will take office on Jan. 1.