Brazil: We've been here before - Lula's poll strength may not last.
By Daniel Galo from Northern Trust Company 06-13-2002
The latest poll numbers in the presidential contest showed left-winger Luiz Inacio Lula da Silva with 41% of popular support and with a yawning gap to his market-preferred opponent, with just 19% of
popular support. Sound familiar? The only catch is that these numbers are not from the current presidential contest, but are from a poll conducted by Datafolha between June 9-13 1994, and the second-place
vote-getter was Fernando Henrique Cardoso, the current, two-term president, who won that year's race in the first round with 53% of the vote. At the time, it was believed that the presidential contest would not start in earnest until the conclusion of the World Cup tournament, which Brazil won. (Numerous theories abound that Cardoso rode the feeling of national goodwill generated by the win to the presidency, and in 1998, Brazil made it to the final but lost the Cup
to France.) This year the team has made it to the second round, with a final Group C match against Costa Rica.
While the state of the economy was much different then - the real would be introduced on July 1 of that year in the hopes that the new currency would stabilize the economy and pull it out of
hyperinflation - the similarities between the poll numbers then and now are remarkable. The most recent poll this year, taken by the same polling group on June 7, put Lula's support at 40% compared with 21%
support for Jose Serra, the market-preferred candidate.
The Brazilian economy has always had its share of red flags. With a large debt load and a wide current account deficit, it remains vulnerable to international (and domestic) financial turbulence. But
if history acts as a guide, later this year, with the benefit of hindsight, any volatility that is driven by presidential public opinion polls may seem unwarranted.
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