Center-right the big winner in Brazil’s mayoral elections

And despite recent polls suggesting that we were set for nail-biting vote counts, there were few surprises on Election Day. Here are the main results:</p> <ul><li><strong>São Paulo.</strong> Incumbent Bruno Covas beat left-wing activist Guilherme Boulos soundly, with 59 percent of valid votes.</li><li><strong>Rio de Janeiro.</strong> Former Mayor Eduardo Paes obliterated incumbent Marcelo Crivella, finishing almost 30 points ahead.</li><li><strong>Porto Alegre.</strong> Sebastião Melo rallied the conservative vote to beat Manuela D&#8217;Ávila, from the Communist Party of Brazil, by almost 10 points.</li><li><strong>Recife.</strong> In a battle of cousins, João Campos continued his family&#8217;s dominance of local politics and won against Workers&#8217; Party candidate Marilia Arraes.</li></ul> <iframe title="Top 4 winningest parties in 2020" aria-label="Map" id="datawrapper-chart-Q3NAR" src="https://datawrapper.dwcdn.net/Q3NAR/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="658"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}}))}(); </script> <hr class="wp-block-separator"/> <p><strong>What to take from the elections.</strong> As in the first round, former President Luiz Inácio Lula da Silva and his nemesis, President Jair Bolsonaro, were handed political defeats. Neither got to <a href="https://brazilian.report/power/2020/11/25/mayor-candidates-try-to-emerge-from-shadow-of-bolsonaro-and-lula/">play kingmaker</a>:&nbsp;</p> <ul><li>Only one capital was won by a Bolsonaro-backed candidate. It was Rio Branco, in the Amazonian state of Acre — which is by no means a central constituency for the national chessboard.</li><li>Meanwhile, the Workers&#8217; Party failed — for the first time ever — to win a single race in a state capital. The results show that the anti-Workers&#8217; Party sentiment which helped decide the 2018 race continues alive and well, posing a major challenge going forward for what was once Brazil&#8217;s most popular party.</li></ul> <p><strong>What it means.</strong> If 2018 was the race for renewal — with voters electing candidates who promised to smash the establishment — 2020 marks a return to the status quo. Center-right parties were the big winners and gathered mayoral seats in cities that, when combined, make up 60 percent of Brazil&#8217;s entire population. Indeed, this is in line with opinion polls, which show that most Brazilians identify themselves as being right of center.</p> <ul><li>Municipal elections can serve as bellwethers for national races, suggesting that the 2022 race could be won by moderate candidates. However, jumping to such conclusions this time around is not advised, as Brazil could face an even more severe economic crisis in 2021, when the coronavirus emergency salary expires and millions will be deprived of their biggest source of income since the start of the pandemic. And when a generational crisis hits a country, all political bets are off.</li></ul> <hr class="wp-block-separator"/> <h2>Industry and commerce: opposite expectations</h2> <p>Industrial sectors were among those hardest-hit by the pandemic, but industry leaders have expressed a new-found optimism. The Industry Confidence Index — measured by think tank Fundação Getulio Vargas — has skyrocketed to its highest level in ten years. However, confidence among commerce companies and consumers fell for the second month in a row —&nbsp;a sign that cutting the emergency salary program is having an effect on economic forecasts.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/4512806"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>Industry.</strong> The Brazilian industry is revelling in the devaluation of the Brazilian Real. A weaker currency means that imported goods become more expensive, thus reducing imports and making them more competitive in the domestic market. Additionally, the second coronavirus wave in Europe has made some inputs more scarce — which also benefits local players.</p> <p><strong>Commerce. </strong>Explaining why commerce and consumers are less hopeful about the future is easy: the emergency salary program is set to expire at the end of the year, and Brazil could be entering into a second wave of coronavirus infections.</p> <ul><li>&#8220;Brazilians were already postponing the purchase of durable goods due to fears of losing their jobs. Meanwhile, as the emergency salary is set to expire, millions of workers are returning to the job market — and realizing how difficult it is to find a position in these times.</li></ul> <p><strong>Services.</strong> As coronavirus deaths and cases continue to rise, the services sector — which is the backbone of the Brazilian economy —&nbsp;fears new restrictive measures. While some services can be performed remotely, most cannot.</p> <p><strong>Restrictions.</strong> After the municipal elections, the pandemic returns to the top of the priority list for Brazil&#8217;s local administrations.&nbsp;</p> <ul><li>On Friday, Curitiba became the first major city to roll back its reopening process and reinstate restrictions. Today, the São Paulo state government will announce a new reassessment of its reopening plan.&nbsp;</li><li>But governors fear strong reactions from both business owners and voters, as support for isolation measures has dwindled, and most Brazilians are <a href="https://brazilian.report/society/2020/11/28/traffic-data-shows-brazil-returning-to-normality-amid-pandemic/">going about their business as usual</a>. Another opponent to restrictions will be President Jair Bolsonaro, under pressure from his <a href="https://brazilian.report/newsletters/brazil-daily/2020/11/26/bolsonaro-approval-ratings-suffer-as-aid-program-nears-end/">decreasing approval ratings</a>.</li></ul> <hr class="wp-block-separator"/> <h2>Markets</h2> <p>On November 19, black Brazilian man João Alberto Freitas was murdered by two white security guards inside a Carrefour supermarket in southern Brazil. Investors&#8217; reactions were initially tepid, but after multiple anti-racism protests, Carrefour Brazil stocks took a nosedive last week — with the company losing BRL 1.75 billion (USD 327 million) in market share. On Friday, the supermarket brand avoided using the term &#8220;Black Friday&#8221; for its sales period.&nbsp;</p> <hr class="wp-block-separator"/> <h2>Tradition wins the 2020 elections</h2> <p>Two years after Brazilian voters opted for change — electing candidates who presented themselves as &#8220;anti-establishment&#8221; —&nbsp;traditional parties and politicians made a comeback. Not only did the center-right win in constituencies home to 60 percent of the population, but young candidates also performed worse than in previous elections. Officials over 50 and 60 were the only age group to increase their share of elected city councilors.</p> <ul><li>While most parties still struggle to attract <a href="https://brazilian.report/power/2020/02/10/lula-workers-party-renewal-politics-gig-economy-evangelicals/&#93;">members under </a><a href="https://brazilian.report/power/2020/02/10/lula-workers-party-renewal-politics-gig-economy-evangelicals/">24 years old</a>, that is not a problem for groups which try to embody change, such as Novo (to the right), and the Socialist and Freedom Party (PSOL, to the left).</li></ul> <div class="flourish-embed flourish-chart" data-src="visualisation/4512240"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <hr class="wp-block-separator"/> <h2>Looking ahead</h2> <ul><li><strong>China.</strong> After members of the Bolsonaro family <a href="https://brazilian.report/newsletters/brazil-daily/2020/11/25/brazil-economy-minister-paulo-guedes-threatens-to-walk/">ramped up their anti-China rhetoric</a>, the Asian country delivered a message by way of newspaper Huanqiu/Global Times, a daily tabloid newspaper under the auspices of the Chinese Communist Party. In a <a href="https://www.globaltimes.cn/content/1208427.shtml">story</a> entitled &#8220;Will cold-chain imports trigger a new wave of Covid-19 in China?,&#8221; the newspaper highlights the risk of importing frozen products from Brazil.</li><li><strong>Diplomacy. </strong>Almost one year after the left-leaning Alberto Fernández took office as president of Argentina, he will have his first talk with Brazilian far-right counterpart Jair Bolsonaro. The talk will happen today, as November 30 marks &#8220;Argentinian-Brazilian Friendship Day.&#8221; So far, Messrs. Bolsonaro and Fernández have given each other the silent treatment, with the exception of a few jabs through the press. This, despite the two countries&#8217; <a href="https://brazilian.report/latin-america/2020/06/10/blanked-brazil-argentina-turning-china-trade/">massive mutual importance</a>.&nbsp;</li><li><strong>Unemployment. </strong>Brazil&#8217;s unemployment rate hit a new record high at 14.6 percent. The rate has been increasing on a weekly basis, as the easing of Covid-19 lockdown measures encourages people to look for work again. Some economists foresee an <a href="https://brazilian.report/business/2020/10/23/brazil-unemployment-hits-new-records-but-worse-is-yet-to-come/">even bleaker scenario in 2021</a>, as the end of the <a href="https://brazilian.report/power/2020/08/20/what-happens-when-brazils-coronavirus-emergency-aid-ends/">coronavirus emergency salary</a> program will push more and more people back into the workforce to seek jobs.&nbsp;</li><li><strong>Vaccine.</strong> The federal government plans to announce a <a href="https://brazilian.report/power/2020/11/26/brazil-insists-on-botched-strategies-against-the-coronavirus/">national vaccination plan</a> on December 1. One thing, though, seems to be clear: not all Brazilians will be given access to <a href="https://brazilian.report/podcast/2020/10/21/podcast-electoral-calculations-around-covid-19-vaccine/">Covid-19 immunization</a> in 2021. The Health Ministry is expected to make senior citizens, people with chronic diseases, and health professionals the country&#8217;s three vaccine priority groups. &#8220;Our goal is to vaccinate 80 million people per year,&#8221; said Deputy Health Minister Élcio Franco.</li></ul> <hr class="wp-block-separator"/> <h2>In case you missed it</h2> <ul><li><strong>Space agency.</strong> A group of eight countries, led by Mexico and Argentina, have created the <a href="https://brazilian.report/newsletters/brazil-daily/2020/11/27/without-brazil-latin-american-nations-launch-space-agency/">Latin American and Caribbean Space Agency</a> (ALCE), with plans to launch several small satellites as early as 2021 or 2022. Brazil, home to one of the world’s best sites for launching satellites (the Alcântara Launch Center, in Maranhão), has not joined. Initiatives such as ALCE aim at giving Latin American countries control over their own communication systems.</li><li><strong>Black Friday. </strong>Despite the pandemic, <a href="https://brazilian.report/business/2020/11/26/where-should-brazilian-investors-look-ahead-black-friday/">Black Friday 2020</a> was an e-commerce success. According to a survey by Ebit/Nielsen, online sales raised over BRL 4 billion (USD 748 million) on Thursday and Friday alone — a 25-percent increase from 2019. According to Ebit/Nielsen, vendors&#8217; strategy to spread promotions over the entire month of November — instead of only one day — helped attract consumers. </li><li><strong>Housing boom. </strong>A dramatic drop in interest rates has sparked a mortgage boom in Brazil, a welcome surge for big banks, whose business loan portfolios have been put under pressure by the coronavirus crisis. Brazil’s last such boom ended badly, though bankers say this one is different as it is driven by low interest rates, a deep housing deficit, and is underpinned by cautious credit models.</li><li><strong>Moro.</strong> After weighing up moving to the U.S., former Justice Minister Sergio Moro will stay put in Curitiba. On December 1, he will become a <a href="https://www.alvarezandmarsal.com/insights/alvarez-marsal-hires-brazils-former-minister-justice-and-public-security">managing director</a> for consultancy firm Alvarez &amp; Marsal, as part of its disputes and investigations department. The firm is currently conducting the court-supervised recovery process of Odebrecht — the construction group which met its downfall after having its corrupt dealings with politicians exposed by Operation Car Wash, led by then-Federal Judge Sergio Moro.</li><li><strong>Moro 2. </strong>Mr. Moro was once the <a href="https://brazilian.report/power/2020/10/09/the-fall-from-grace-of-once-anti-corruption-hero-sergio-moro/">face of Operation Car Wash</a>, and viewed as a strong potential presidential candidate. His political stock was harmed after his stint as Jair Bolsonaro&#8217;s Justice Minister — a period defined by his <a href="https://brazilian.report/power/2020/08/04/is-the-government-dismantling-operation-car-wash/">ineffectiveness</a> and a bitter <a href="https://brazilian.report/power/2020/04/24/sergio-moro-resigns-justice-minister-and-goes-out-swinging/">fallout</a> with the president. It is hard to imagine that a consultancy position will keep him close to the political spotlight.