Brazil has a New Boss

After a closer than expected election, a hard leftist takes the presidency. Updated 11/1/2022

Luiz Inácio Lula da Silva is the once and once again President of Brazil

Latest Update

We always try to update our stories with the latest. “Bolsonaro just spoke,” reports regional expert Mateo Haydar, “[d]id not explicitly concede results but said he will "obey constitution," followed by his chief of staff who said there will be an orderly transition. This was a middle of the road approach, where he is not accepting that there was no fraud but will not contest the results to the disappointment of some in his base. Things are likely to calm down after this but news is still unraveling. Will send updates.”

Original Post

On Sunday, leftist former president Luiz Inácio “Lula” da Silva defeated incumbent conservative president Jair Bolsonaro in Brazil’s runoff presidential elections by less than 2% or roughly 2 million votes. 12 state governor’s races were also decided, in split results for both camps. As of this morning, President Bolsonaro has yet to concede or recognize results after months of raising alarms about election integrity and concerns with the digital voting system. What are implications of this closer than expected elections. We asked Mateo Haydar, who closely follows developments in Latin America.

So what is the bottom line here? On January 1, Lula will return to power after serving two previous terms as the first hard leftist elected in Brazilian history (2002-2010) in an astounding comeback after spending the last election in prison for corruption and money laundering charges. Lula was released after 580 days behind bars but was never acquitted. In a rebuke of Bolsonaro, often compared to Donald Trump, Biden immediately congratulated Lula on “free, fair and credible elections” in a time-coordinated response with Canadian PM Trudeau and French president Macron. 

Why did he win? Lula’s narrow victory came on a wave of dissatisfaction following the pandemic and persistent local and international media attacks on Bolsonaro. These were echoed by the center-left candidates in third and fourth place that endorsed Lula after the first round, despite Bolsonaro narrowing the gap. Large conservative blocs in the incoming Congress and likely 14 opposition governors (of 26 total) pose a significant challenge to Lula, who will have to govern with the traditional centrist establishment to secure legislative majorities. 

What are the implications for the U.S.? Lula’s election creates an opening for the regional left to move closer toward “regional integration” efforts, starting by strengthening multilateral bodies that exclude the U.S. (i.e. the Venezuela-driven CELAC which hosts China's regional ministerial conferences) and appointing a pro-China president to the Inter-American Development Bank. While it is no longer the 2000’s period of growth for China, CCP influence is likely to grow under Lula. As the founder of the Sao Paulo Forum in 1990 with Fidel Castro, Lula is a historic ally of the region's anti-American dictators, which may include pushing the Biden administration to normalize relations with Maduro and assisting in sanctions evasion. 

What’s Next? In the immediate term, uncertainty regarding President Bolsonaro’s response to the results remains. Bolsonaro could present a legal challenge, but with the Supreme Electoral Tribunal (TSE) declaring a winner, the outcome is unlikely to change. The election also marks an unprecedented scenario for the region, as almost every major country in South America and the largest economies in the region from the Southern Cone to the U.S. southern border will all be governed by the far-left. Still, Lula is likely to be far more resource constrained than in his first two terms which benefitted from a global commodities boom and a spike in exports to China.