Getting to Know Brazil
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Getting to Know Brazil
BrazilStrategySector Note25 February 2010
#2 – The electoral conundrum
Brazil holds major elections in 2010
2010 is a major election year in Brazil. The country’s population of 190 millioninhabitants (more than 130 million voters) will elect a new president, 27 stategovernors, 513 representatives of the Lower House, 54 senators and regionalcongressmen across the nation. This is clearly a significant event for the country,and may cause some market volatility due to its potential impacts on the microagenda (which we see as large) and the macro agenda (small).
The electoral process helps slow structural changes in the country
Brazil holds elections every two years. National and state elections are followedand preceded by municipal elections. The small interval between electionsaffects Congress’ efficiency in the second semester every two years. Thisobviously impacts Brazil’s ability to make progress in key structural changes (theso-called reforms), such as tax or public pension reforms. While we could betempted to think that municipal elections have low influence in Congress, theopposite has proven to be the case.
Electoral rules lead to poor-quality voting and a distant Congress
Voting in Brazil is mandatory. At the same time, most Brazilian voters have toolittle information, time, knowledge or motivation to take well-based votingdecisions. According to a poll, a remarkable 74% of Brazilians don’t evenremember who they voted for in the Lower House elections only four yearsbefore the poll was taken. Another poll shows that 13% of Brazilian votersadmitted having switched votes in return for some personal benefit.
Pardon Montesquieu, but the powers are not balanced in Brazil
Despite enjoying really strong macroeconomic momentum, Brazil couldpotentially grow faster if some key legal reforms are carried out. We don’t expectthis to happen in the next presidential term unless the government, which inpractical terms is much more powerful than Congress, decides to push thesereforms. We also don’t foresee a change in the balance of power anytime soon.