VistaBrazil - August 2014

The Untimely Death Of Campos Shakes The Campaign To The Core

Eduardo Campos, a Brazilian presidential candidate and 49-year-old father of five, was killed in a plane crash on 13 August, in a tragic incident that radically alters the electoral landscape at a crucial point.

A 12-seater Cessna jet carrying Campos, leader of the center-left Brazilian Socialist Party (PSB), crashed in bad weather in the coastal city of Santos, killing all seven people on board. Campos's running mate, Marina Silva, was not on the plane.

The black box recovered from the wreckage did not record the flight, according to the Brazilian Air Force (FAB). "The two hours of audio, the maximum recording capacity of the equipment, which were received and validated by certified technicians, were not of the flight of 13 August," said spokesperson Pedro Luis Farcic. "It is not yet possible to determine the date of the dialogue recorded."

Experts from the Centre of Investigation and Prevention of Aeronautical Accidents have been trying to reconstruct the black box files to find out what caused the incident.

While polls put Campos in third place after incumbent Dilma Rousseff of the Workers' Party (PT) and challenger Aécio Neves of the Brazilian Social Democracy Party (PSDB) - with less than 10 percent of the vote in recent polls - analysts had expected the former governor of the northeastern state of Pernambuco to gain more votes as his official television campaign got underway this week.

His poor standing was ascribed partly to the vast territory of Brazil, where it takes time for rising politicians to gain recognition nationally. Television campaigns are also an influential tool in a country with high illiteracy. A business-friendly leftist who was also tough on crime, Campos had hoped to appeal to both progressives and fiscal conservatives.

In a reflection of the wide-open possible political repercussions of the tragedy, Brazilian stocks have been volatile as investors struggle to assess whether Campos's death will make an opposition victory more or less likely. The Bovespa index lost early gains and dropped as much as 2.1 per cent before recovering to trade down 0.5 per cent on the day the news broke.

The remaining candidates will no doubt try to leverage the tragedy to their own advantage, and while Rousseff is still favored to win, her popularity has been dimming. That has been good news for investors who dislike the interventionist economic policies of PT. Under Brazilian law, the PSB has 10 days to choose a substitute, and it set a meeting for 20 August.

At the time of writing, it is widely expected that the popular Marina Silva of the Sustainability Network (Rede Sustentabilidade), who had been sharing the Campos ticket as vice-presidential candidate, will step in. She ran for president in 2010, winning 19 percent of the vote. A Silva candidacy could upend the race just seven weeks before election day, and she is already gaining ground, narrowly passing Neves in an 18 August poll. The PSDB formally announced on 20 August that it would throw its support behind Silva on a second ballot if its own candidate lost.

Party members see her as the natural successor to Campos, but her environmentalism and antiestablishment style are not universally admired. She nonetheless has a strong following among young voters. A strongly religious and committed environmental activist, Silva could attract votes from both the left and right, threatening Rousseff more than Campos could have done.

Known for her reformist principles, Silva has gained traction with some of São Paulo's traditionally conservative financial leaders, who would otherwise lean toward Neves. Silva polled higher than Neves this spring but was unable to reach the registration threshold for her party in time for the campaign.

Her candidacy would also hit the president where she is vulnerable. Silva will almost certainly put environmental issues at the forefront of the campaign, and Rousseff has championed the development of enormous hydroelectric dams in the Amazon. The president calls the initiative necessary but many in her own support base are against it.

In the immediate aftermath of the crash, Rousseff declared three days of mourning. "Today we lost a great Brazilian," she declared. "Eduardo was a great leader."

ECONOMY & BUSINESS

The BRICS summit

The five BRICS countries of Brazil, Russia, India, China, and South Africa held their 6th summit on 14 July in Fortaleza, Ceará. The concrete result was the creation of two institutions: a new development bank, and a contingent reserve agreement to provide assistance at times of crisis.

The final document has 71 sections, ranging over various mostly political international issues. That focus is partly a protest against delays in reforming the structure and governance of the International Monetary Fund (IMF), desired by emerging economies, and partly a result of the individual interests of the BRICS countries.

The political character of the summit was emphasized by a subsequent meeting in Brasília with Unasur, which comprises all Latin American countries.

The creation of the New Development Bank (NDB) and the Contingent Reserve Agreement (CRA) was the culmination of a long negotiating process and was not exempt from controversy.

Brazil wanted the NDB presidency but was preempted by India and had to accept the chairmanship of the bank's board. China, which will provide most of the...