Bolsonaro survives, but will Brazilian democracy?

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Oct 03, 2022 View in browser   By Ryan Heath Follow Ryan on Twitter  BRAZIL HEADED FOR VICIOUS RUN-OFF VOTE Brazil's presidential election results are in, and they're about to send the country's democracy into an even bigger mess. The country is already in the middle of a wave of political violence that has included at least 45 deaths so far this year. The incumbent President Jair Bolsonaro has threatened to ignore the election results, helping to fuel massive distrust in the electoral process. That's a combustible mix for a presidential run-off vote that will take place Oct. 30 after left-wing candidate Luiz Inácio Lula da Silva — known as Lula — on Sunday failed to clear the 50 percent threshold needed to avoid a run-off in his battle against Bolsonaro. With nearly all votes counted Lula sat on 48 percent and Bolsonaro on 43 percent. While that makes Lula the clear favorite to win the run-off, Bolsonaro outperformed polls — by more than 8 percent in several states — helping to feed his narrative that polls and vote tallies are rigged against him. The small mercy is that it only took one night for all the results to be tabulated (no U.S.-style week-long drama down south). Latin America side note: Venezuela's would-be democratic president Juan Guaidó endorsed Bolsonaro, who himself threatens to ignore the final results of this election. TRUSSTERF**K That's how witty Londoners are referring to the reign of Queen Prime Minister Liz Truss. THE LADY IS FOR TURNING: Margaret Thatcher famously refused to back down when her party and the public rebelled against her radical policies early in her prime ministership. Not so Truss, who abruptly canceled a deeply unpopular tax cut this morning, just hours after reporters were briefed that the government would not be reversing course. Over the weekend Truss said she would delay a vote on the proposed tax cuts for high-income earners until Nov. 23 (guaranteeing weeks of bad headlines). The background is a 33-point polling deficit: Labour led the Conservatives 54 to 21 in a YouGov poll released after the government's tax announcement. More in POLITICO's Poll of Polls aggregator. The budget package generated an astonishing level of backlash — including on the other side of the world. Global Insider witnessed participants at Milken Asia Summit in Singapore last week spending more time deriding Britain's economic policies than debating either China's rise or Russia's war on Ukraine. Let them eat European Political Community: With no cake to offer her people, Truss has searched for distractions from her domestic woes and agreed to join an Emmanuel Macron-engineered summit on Thursday. It's the first meeting of a new "European Political Community" — a more-than-just-the-EU grouping, which includes Ukraine, among other non-EU countries — which will meet in Prague. The U.K. wants to host the second meeting of the group, and plans to make migration a focus of the U.K.'s initial participation, British diplomats told their European peers last Thursday. REALITY CHECK — NO SUCH THING AS "MARKETS" We need to delve back into Margaret Thatcher 's back catalog to put Truss' actions into perspective. In 1987, Thatcher famously suggested that there is no such thing as "society" — arguing in a interview that too many people want a mythical "society" to solve their problems for them. The lesson for Truss out of this tax flip-flop may be that there's no such thing as the "market" to solve her problems. There are only people, with interests, who meet in markets. Truss and her Chancellor, Kwasi Kwarteng, seem to have believed that "markets" would back their tax-cutting budget plans. These so-called "markets" were warned about most of the plans for weeks in advance. But "markets" are clearly more complex than the new government assumed. First "markets" don't vote, people do. A supermajority of the British voting public hated this policy. Second, financial markets are made up of more than London-based financiers. In a global financial capital such as London, home to a heavily traded currency like the British pound, the players include foreign financial firms, private investors, economists, international financial institutions and central banks. Third, Truss didn't explain how these expensive policies would be paid for. Almost no-one believes it will be through higher economic growth generating tax receipts. The chief reason for that: Brexit. Until now Britain's Brexit chickens haven't come home to roost because extremely cheap capital, Covid fiscal stimulus and the general disruption of the pandemic have all masked the widely predicted downsides of Britain leaving the EU. Now that capital is getting expensive and the global economy is cratering, while energy prices remain sky-high, Truss — as the long-time self-appointed face of Brexit Britain — is facing a credibility crisis. The reasons for Truss' mess are not difficult to grasp, but they will be difficult for her to overcome.   SUBSCRIBE TO POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don't miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY.     GLOBAL RISKS AND TRENDS DEMOCRACY AT RISK … POLAND: Sen. Marco Rubio (R-Fla.) told CNN Sunday that if Putin decides he can lose his Ukraine war because of the Western weapon supplies to Ukraine, then Polish logistic supply centers are at risk of Russian attack. CHAD: Reuters reported that Chad has adopted resolutions that push back democratic elections by two years and allow interim leader Mahamat Idriss Deby to stay in power and be eligible to run for president in the eventual vote. BURKINA FASO: Paul Henri Sandaogo Damiba , a coup leader who came to power last January, "left the country for Togo Sunday two days after he himself was overthrown in a coup, while the new junta urged citizens not to loot or vandalize," AP reported. Good luck with that. The junta appointed Ibrahim Traore as its head of state. Damiba had promised elections by 2024. ECOWAS trying to mediate to avoid bloodshed: West African regional bloc ECOWAS said in a statement it will send mediators to the capital Ouagadougou today, including former Niger President Mahamadou Issoufou. UNITED STATES — POLITICAL VIOLENCE MAY TURN DEADLY, AGAIN: Sen. Susan Collins (R-Maine), who had a window smashed at her home, told the New York Times: "I wouldn't be surprised if a senator or House member were killed. ... What started with abusive phone calls is now translating into active threats of violence and real violence." Capitol Hill police were killed in the Jan. 6 insurrection in 2021. MALAWI — PAY DAY FOR ANTI-CORRUPTION DRIVE: Malawi has signed a $350 million deal with the U.S. government's Millennium Challenge Corporation to improve roads and land administration. The deal was offered by Washington after Malawi implemented successful anti-corruption efforts. MOSCOW'S SELECTIVE MEMORIES: Former Swedish PM Carl Bildt shared the numbers for the Yes vote in Ukraine's 1991 referendum on independence from Moscow: the last and only legitimate referendum on sovereignty for Ukrainian populations. "Every single region voted clearly for independence," Bildt noted, as this map handily illustrates. DEMOCRACY IN ACTION …  CANADA — ELECTION DAY IN QUEBEC: The ruling Coalition Avenir Québec is expected to win a second term. More in Ottawa Playbook. BULGARIA — FORMER PM IN LEAD: Former Prime Minister Boyko Borissov led his party to 25 percent of the vote in parliamentary elections. Borissov has tried to overcome his history of cozy relations with the Kremlin and Russian energy companies by styling himself as a pro-EU Atlanticist in this election. His toxic relations with other parties may prevent him forming a ruling coalition. LATVIA — CENTER-RIGHT FINISHES FIRST: The center-right New Unity party of Prime Minister Krišjānis Kariņš, finished first in national parliament elections, but with only 19 percent of the vote. He'll need to find additional or new coalition partners to achieve a working majority in parliament. REALITY CHECK — UKRAINE'S NATO PUSH: Presidents of nine NATO countries issued a statement supporting Ukraine's membership of the alliance: Czech Republic, Estonia, Latvia, Lithuania, North Macedonia, Montenegro, Poland, Slovakia and Romania. These are, in effect, the usual suspects and none of them are "big" NATO members. That leaves 21 countries including every nuclear-armed NATO member still to sign up. GLOBETROTTERS UNENTITLED: Meet the Danish model formerly known as prince. CULTURE CLASH: Pro tip for C-PAC, the Conservative Political Action Conference — when taking your franchise to a new country, try not to schedule it in direct conflict with the biggest football event of the year. That's what C-PAC organizers did in Sydney on Sunday. C-PAC Australia fizzled into oblivion, more notable for some minor scuffles between police and a rag-tag left-wing protest than what was said on-stage. C-PAC cancel culture: Nick Minchin , a former conservative Australian government minister, left unimpressed. At one point he interrupted his remarks to address the heckling audience: "You're worse than a socialist audience. Give me a chance to speak." RUSSIAN BILLIONAIRE CHARGED WITH VIOLATING US SANCTIONS: The Southern District of New York charged Russian billionaire Oleg Deripaska Thursday for violating U.S. sanctions, according to ABC News. Deripaska has previously been accused of laundering money for Russia's president. CAN'T STOP, WON'T STOP: Michael Rodrigues is Sydney's new "24-hour economy commissioner" —  in charge of developing a strategy to revive the city's nightlife, from eating to art and drinking. He's been handed a $33 million budget to "encourage people to get off the couch and leave the house," Rodrigues told Bloomberg. The source of the problem : Australia kicked out close to 1 million foreign students, in addition to blocking the arrival of young migrant workers and tourists during its Covid lockdowns. Night-time economies lost critical mass that never returned. BRAIN FOOD INSIDE RUSSIA'S FILTRATION CAMPS: David Kortava reports for the New Yorker on the camps, where Ukrainian civilians are being sequestered—sometimes indefinitely. Thanks to editor Heidi Vogt and producer Hannah Farrow. SUBSCRIBE to the POLITICO newsletter family: D.C. Playbook | Brussels Playbook | London Playbook | Paris Playbook| Ottawa Playbook| EU Confidential | D.C. Influence | EU Influence | London Influence | Digital Bridge | China Direct | Berlin Bulletin | Living Cities   STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.       Follow us on Twitter Ryan Heath @PoliticoRyan   Follow us

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