Within less than a week, Brazil has undergone three watershed moments.
First, its roots and much of its identity were erased when a fire devoured the National Museum of Rio de Janeiro, reducing to ashes the spirit and pride of its imperial memory and cremating, before the eyes of the world, an incredible collection of over two million archaeological exhibits.
Then a second blow shattered the last faint illusions some Brazilians might still have had as to a future for their country’s politics. Luiz Inácio Lula da Silva, the two-term president and legendary leader of the PT (Workers’ Party), jailed in Curitiba for corruption, saw his candidacy terminally quashed by the electoral courts. In lieu of Lula, the ticket will be now headed by Fernando Haddad, the former mayor of São Paulo and, until now, a candidate with almost no coat-tails.
With Lula out of the game, Jair Bolsonaro – the ultrarightist, anti-gay, xenophobic former military officer and hardliner against crime – has gained momentum, heading the opinion polls with 23 percent. Given the generalised disenchantment with the traditional political class, some of the Lula vote has leapfrogged to his, the opposite trench, rallying behind the most disruptive and ‘anti-political’ candidate.
While Bolsonaro was nailing down a first-round triumph on October 7, the opinion polls showed him losing against any of his rivals in the second round (due October 28). Pundits were arguing that his extremely high rejection ratings played against him in the run-off, although those drawing parallels with the Donald Trump phenomenon of the 2016 US campaign maintained that negative percentages matter less than candidate recognition.
All this until Thursday afternoon when Brazil’s third watershed moment arrived. Hoisted on the shoulders of supporters, Bolsonaro was at a campaign rally in a city in Minas Gerais when he was stabbed in the stomach by a “lone wolf”, a professed Communist who had decided to kill him because “God so ordered.” The paladin of law and order had just suffered, on his own skin, the crime which he had promised to combat. And Brazil, that country of joyous carnivals and samba, wrote itself onto the dangerous list of ultra-violent politics, joining Mexico, Colombia, Paraguay and Ecuador, just to name some others in the neighbourhood.
São Paulo’s Bovespa share index closed positive on Thursday as soon as it was ascertained that the ex-officer’s life was not in danger. That was the first reaction. Do the markets support Bolsonaro? Definitely, because the antisystem candidate picked a recognised representative from the financial establishment as his future economy minister. That’s Paulo Guedes, a Chicago boy with a brilliant track record in the Sao Paulo stock market and Wall Street, the founder of Banco Pactual and BR Investimentos.
Following the attack, at least two questions spring to the fore. Firstly, can Bolsonaro continue on his campaign with voting day barely four weeks away? And if he does return to the presidential race, how will this attack influence his voting intentions? Most pundits yesterday were saying that this assassination attempt will confer a heroic image on the candidate and bolster his campaign, and that it was the best publicity possible (financially, at any rate) for his main campaign slogan of being “tough on crime.” The footage of a bloodstained Bolsonaro falling to the ground was repeated over and over again, flooding all the news programmes and the social networks. And free of charge.
There is yet another angle. Jair Bolsonaro had been mostly prevailing at both extremes of the social pyramid, topping the vote in the states of Roraima (on the frontier with Venezuela with the biggest inflow of refugees) and Acre (bordering on Bolivia and Peru), where his xenophobic discourse most catches on. But he was also doing well in much wealthier areas like Santa Catarina state and Brasilia (DF), which identify with the kind of economics preached by Guedes.
On the rest of the electoral chessboard, the workers of the south and the impoverished pockets of the northeast – which Lula always swept for the PT – were giving rise to a phenomenon on which the impact of the disruptive stabbing episode has yet to be seen. The most radicalised candidate on the left, Ciro Gomes, had been picking up the Lula-PT votes which had not transferred to either Haddad or Bolsonaro. With voting intentions of 12 percent, Ciro is already a headache for the PT. And far more for the markets.
Moody’s director for Latin America, Alfredo Coutino, believes that a leftist victory (whether for Ciro or Haddad) would send the dollar shooting up to five reais by December, with the Selic prime interest rate entering double digits next year. Compared with the kangaroo leaps of the dollar and the 60 percent interest rates in Argentina, such forecasts are peanuts.
Although Bolsonaro is not in mortal danger, he will not be returning to the race for at least a week, his team says. In solidarity, his political rivals have temporarily suspended their campaigns while Jair’s followers chant: “Mito, Mito” (“Awesome, the greatest!”). They also scream, more worringly: “He will be avenged!”
While Jair recovers from the stabbing, on the eve of the 196th anniversary of Brazilian independence, commemorated yesterday, the danger of an escalation of campaign violence rears its ugly head. Geraldo Alckmin, the centre’s candidate, remains a pillar of salt – the hopeful of the PSDB social democrats (or “tucanos,” as they are known in Brazil) cannot improve on five percent. Another consequence of the Lava Jato graft scandal – until they too were splashed, the tucanos were the favourites of the markets and the establishment.
So in today’s unpredictable Brazil, shaken at its foundations by blood and fire, still wading in the midst of ruptures and political disenchantment, even the establishment is lurching into the most spectacular extremes.