A Clamor for Continuity in Brazil

With just three months left before they elect a new president, Brazilians are holding their breath. Back in 2002, when a onetime union man with a history of slamming the bourgeoisie was poised to take office, the very idea nearly undid a convalescing Brazilian economy. To save his candidacy, Luiz Inácio Lula da Silva wrote an open “Letter to the Brazilian People” eschewing his confrontational past and vowing to abide by the free market. The resulting economic revival has awed the world.

Today, two candidates have a real shot at leading the $2 trillion powerhouse. Will voters choose Lula’s handpicked successor, Dilma Rousseff, a former leftist guerrilla? Or José Serra, a passionate center-leftist from São Paolo? Polls show the two at a dead heat. Rousseff never stops assuring Brazilians and foreign investors that she has shed her bandolier to follow Lula’s middle path. And her rival may be a fierce critic of Lula’s government, but the running political joke today is that it’s actually Serra the economist who needs to pen a reassuring letter to the Brazilian people.

This clamor for continuity is a clear sign of more mature politics taking over Latin America. Ever since Venezuelan strongman Hugo Chávez launched his “Bolivarian revolution” to bring 21st-Century Socialism to the continent more than a decade ago, the ideological battle for Latin America’s hearts and minds has been fierce. Now it may be over. In some patches (Argentina, Bolivia), heavy-handed state economic intervention has returned, bringing price controls and populist spending. But for the most part, Latin politics have veered sharply to the middle. Avowed conservatives won elections this year in Chile, Colombia, and (after first deposing a Chávez ally) Honduras. Former populists, like Peru’s Alan Garcia, have been reborn as fiscal conservatives. Even where woolly socialists have prevailed, as in Paraguay and Uruguay, they’ve mostly toed a moderate line.

Blame it on Brazil. Lula’s commitment to keep inflation low, honor debts, and play by the free market’s rules steadied the economy and astonished the skeptics. “No one in their wildest dreams would have imagined Lula would behave this way,” says emerging-markets guru Mark Mobius of Templeton Asset Management. Though lately the president has wobbled, pumping up government payrolls and reining in the oil industry, he has taken care to preserve the centrist policies that have lifted Brazil into prominence.

The same policies now have the two candidates locked in. Led by a growing middle class, and accustomed to economic stability, prosperity, and a rules-based democracy, voters are unlikely to tolerate any kind of political adventurism. It may not resonate the way “change” does, but a boring election may be the best thing Brazil—and Latin America—could wish for.