This document provides an overview and analysis of Brazil's 2014 presidential election. The key points are: 1) Incumbent president Dilma Rousseff has lost her early lead in polls to environmentalist candidate Marina Silva, who has surged in popularity following the death of her running mate. 2) Brazil is facing economic challenges like slowing growth and high inflation, and many feel opportunities were missed to implement reforms that could have strengthened the economy. 3) Whoever wins will have tough policy choices to balance fiscal responsibility with spending on priorities like education, while addressing structural issues holding back growth. Silva's platform in particular would represent an uncharted direction for Brazil.

1. Brazil’s unfinished
business
A view on the presidential elections
By Thomas Kamm, Partner, Sao Paulo
September, 2014

2. 2 | 2014 | BRUNSWICK ©
Brazil’s unfinished business
By Thomas Kamm, Partner, Sao Paulo
No sooner has hosting the World
Cup ended than Brazil is in the
throes of a new competition:
a presidential election. And
it’s proving to be as full as
surprises – and as unpredictable
- as the tourney that saw the
home favorite routed in an
unprecedented 7 to 1 defeat
in the semi-finals to eventual
winner Germany.
The tragic death of candidate
Eduardo Campos in August has
proven to be an electoral game-changer.
In the space of a few
weeks, Marina Silva has gone
from Mr. Campos’s running-mate
(and something of an
also-ran, as Mr. Campos was in
third place in opinion polls at
the time of his fatal plane crash)
to front-runner, and incumbent
president Dilma Rousseff’s
status has changed from favorite
to challenger.
The latest polls show Ms.
Rousseff running ahead of Ms.
Silva in round one on October
and Ms. Rousseff now slightly
ahead of Ms. Silva in the
October 26 runoff, but within
the margin of error. Third-place
contender Aécio Neves is gaining
strength, but will likely not
make the runoff.
Whatever the final outcome, Ms.
Silva’s astonishing rise speaks
volumes about Brazil’s state of
mind today and the challenges
that await the next government.
While she is not a newcomer on
the Brazilian political scene – she
was Environment Minister in Luis
Inacio Lula da Silva’s government
and ran a strong third in the
2010 presidential elections on an
environmentalist platform – Ms.
Silva’s Lula-like rise from poverty
(see separate profile) makes
her appear like an anti-system
candidate who embodies change.
In many respects, her appeal is an
extension of the wave of protests
that swept the country last year
in support of improved public
services and an end to waste and
corruption, and her election
would signal a further clamor
from Brazilian society for a new
economic and social compact
to consolidate the country’s
emergence on the global scene.
A different Brazil narrative
Indeed, the Brazil narrative today is
very different from the prevailing
story-line when the country last
went to the polls in 2010. At that
time, Brazil was in the midst of a
commodity-driven economic boom,
with growth running at a China-like
7.5%. Building on the economic
stability that was the hallmark of his
predecessor, Fernando Henrique
Cardoso, President Lula introduced
his signature Bolsa Familia plan
and other redistributive policies
that lifted 40 million people out
of poverty and into the consuming
classes. The country was on a roll,
having won the right to host back-to-
back the football World Cup in
2014 and the Olympic Games in
2016, which were largely viewed as
Brazil’s elections – A primer
■■ Brazil’s presidential elections are in
two rounds: the first is on October
5; if no candidate wins 50%+ of
the vote, a runoff between the
two-best placed candidates takes
place on October 26
■■ The presidential term is four years.
Presidents are limited to two
consecutive terms, but can seek re-election
after a four-year hiatus.
■■ Voting is compulsory in Brazil for
those aged between 18 and 70. This
results in turnout rates exceeding
85%.
■■ There are 142.8 million eligible
voters
■■ There are 11 candidates in the
presidential election, but only
three stand a serious chance: Dilma
Rousseff, Marina Silva and Aécio
Neves
■■ All candidates have free air time
on prime-time television. Air
time is allotted according to the
party’s support base in the lower
house of Congress; the bigger the
coalition, the more air time. As
a result, Dilma Rousseff, whose
coalition spans 9 parties, has
considerably more air time than
other candidates: 11.5 minutes out
of 25 minutes.
■■ At the same time as they elect
their President, voters will
also be voting for 513 Federal
representatives, one-third of the
Senate, state governors and state
representatives.
■■ The elected President will take
office on January 1, 2015

3. © BRUNSWICK | 2014 | 3
coming-of-age events for a country
that was long dismissed as the
perennial “land of the future.” It
seemed like the B of BRICS’ time
had come, and it would only be a
matter of years before Brazil would
become the world’s fifth-largest
economy.
But fast-forward four years and
the Carnival atmosphere has
dissipated, as have the hyperbole
and hubris. The country is in a
technical recession, with GDP
falling two successive quarters,
and even if it picks up in the
third quarter, as the government
is predicting, private forecasts
say GDP growth will be around
0.3% this year. Inflation, while
tame compared to the devastating
hyperinflation of the early 1990s,
is running at an annualized rate of
6.5%, leading the Central Bank
to wage a restrictive monetary
policy, with interest rates of
11% a year. Consumption,
the engine of Brazil’s rise, has
slowed, investment is down and
industrial production is falling.
Even with unemployment at
record low levels, a recent study
by Washington, D.C.-based Pew
Research Center showed that
among the 44 countries surveyed,
Brazil was the country with the
biggest year-on-year drop in
economic confidence. The B
of BRICS seems S for stalled,
economists cite it among the
“fragile five” economies that are
particularly vulnerable to interest
rate hikes by the US Federal
Reserve, and Mexico, with its
reform-minded President, has
supplanted Brazil as the markets’
Latin darling.
To be sure, Brazil still has a
lot going for it. It remains a
vast consumer market that
continues to attract large
inflows of foreign investment,
as companies continue to see
untapped potential and favourable
demographic trends. The country
has a dynamic private sector
with a strong entrepreneurial
streak and pockets of excellence
in industries including oil &
gas and aerospace. Brazil boasts
an abundance of strategic
natural resources and is a global
commodities power. Millions
of new consumers have been
integrated into the economy,
inequalities have declined, and
the United Nations’ Food and
Agriculture Organization has just
officially removed Brazil from
the World Hunger Map. As the
current electoral fight shows, it is
a strong and vibrant democracy.
Brazil is an avid digital nation.
Few countries have changed so
dramatically in the space of 20
years, and transformations are
always a bumpy road.
A missed opportunity?
But if the 1980s were known in
Latin America as the “lost decade,”
Brazil’s past few years appear to
many not just as lost momentum,
but a lost opportunity. After
the 1994 Real plan strangled
hyperinflation, laying the
foundations for economic growth,
and President Lula’s social
reforms, many were expecting
the World Cup and Olympics
to provide the trigger for a
new forward stride, including
structural reforms that address
issues holding back Brazil’s
growth. But like the Brazilian
team did on the field, Brazil
dropped the ball: Many of the
planned infrastructure projects
have remained on the drawing
boards or remain incomplete, and
Brazil today still has unfinished
business ahead if it is to live up to
its promise.
“When people will assess
President Dilma’s mandate in the
future, they will probably not
condemn it for having produced
low growth, but for having
squandered opportunities that
are not likely to be repeated,”
wrote Antonio Marcio Buanain,
professor of economics at
Unicamp University (whose
faculty is broadly supportive
Growth is slowing... ...and inflation remains persistently high
7,5%
2010 2011 2012 2013 2014e 2010 2011 2012 2013 2014e
Source: IBGE and the Focus Report (Brazilian Central Bank)
5,91%
6,50%
5,84%
5,91%
6,40%
2,7%
0,9%
2,3%
0,33%

4. 4 | 2014 | BRUNSWICK ©
of Ms. Rousseff’s state-led
development policies), in a
commentary in Estado de
Sao Paulo.
The government blames the
international environment for
the slowdown, and certainly the
end of the commodities boom,
slowing Chinese demand for raw
materials and a challenging global
economy have not helped. But
there is a widespread consensus
among the business community,
economists and political analysts
that Brazil’s growing pains also
have home-grown roots, and
that the government has been
somewhat lax on spending,
intervened excessively in
business and sought quick
fixes to stimulate consumption
rather than push for deeper
structural reforms.
Tough choices ahead
This means that whoever wins,
the next President will have her
work cut out for her. While their
economic programs are short
on detail, the main differences
between candidates center
on how fast they will make a
necessary fiscal adjustment, how
they will balance much-needed
spending on education –which
many say is Brazil’s number
one priority - health, transport,
infrastructure and welfare
programs with the need for
fiscal rectitude, and how harshly
they will attack inflation (which
will likely rise before it falls as
the government has controlled
energy and other prices). Some,
such as Aecio Neves’s likely
finance minister, former Central
Bank governor Arminio Fraga,
say mild shock therapy would
boost confidence and investment;
others are warning this might
lead to a recession. But beyond
the immediate issues, there is a
widely-held belief that Brazil’s
consumption-fueled growth
model appears to have run its
course, and the country needs a
new growth agenda to consolidate
its transformation, focused more
on investments and improving
the competitiveness of the
Brazilian economy.
A victory by Ms. Silva would
propel Brazil into uncharted
waters. Having run in 2010
under an environmentalist
mantle, she forged an alliance
with Mr. Campos’s center-left
party when she failed to
obtain the necessary support to
register her party. Combining an
orthodox position on economic
policy, a conservative stance on
societal issues consistent with
her evangelical beliefs, all the
Social indicators are improving
Internet users (million) Higher education
(million students)
Child mortality
(death per 100 births)
Mobile phone users (% of
population over 10 years old)
2009 2013 2008 2013
Source: Ibope - Nielsen Source: Inep
Source: IBGE Source: Pnad
64.8 5.8
7.31
102.3
2010 2014 2009 2013
17.22
57.6%
75.5%
14.4

5. © BRUNSWICK | 2014 | 5
while vowing to continue – and
even expand – the social policies
that were the hallmark of the
12-year rule of Presidents Lula
and Rousseff’s Workers’ Party,
Ms. Silva’s platform is a delicate
balancing act to maintain her
strong popular appeal while
extending her support to the
business community, with some
senior figures coming out in
public in her favor. Moreover,
bereft of a strong party and
majority to support her, she will
be at the mercy of Congressional
alliances that are notoriously
fickle in Brazil, and also
notoriously dependent on pork-barrel
politics.
But Ms. Rousseff remains
popular among beneficiaries of
welfare programs, notably in the
Northeast, and could still pull
through in the final stretch. If
reelected, Brazil will likely see
a policy inflection – which Ms.
Rousseff has signalled herself,
saying that Finance Minister
Guido Mantega, who has held the
position for the past eight years,
would be replaced. Investors
are looking for signs of more
orthodox economic policy, less
government intervention in
business and measures to foster
investment and competitiveness.
Policy conundrums
Nothing better encapsulates
both Brazil’s potential and
its difficulties – and the
policy conundrums, issues
and challenges faced by the
government, both outgoing
and incoming – than oil giant
Petrobras and the country’s
energy sector.
Under President Lula, Petrobras
was something of a proxy for
Brazil’s new ambitions. After
the discovery in 2006 of offshore
oil reserves as big as those in
the North Sea deep underwater
beneath a thick bed of salt,
President Lula proclaimed that
Brazil had bought “a winning
lottery ticket” and was on its
way to becoming “the greatest
energy power on the planet.” It
was a time for superlatives: in
2010, state-controlled Petrobras
launched what was at the time
the biggest capital increase ever,
a $70 billion issue that was partly
subscribed by the government.
The company also launched
the world’s largest capital
expenditure program, valued at
$224 billion over five years.
But today, Petrobras has become
something of a political football
in the presidential campaign,
a symbol of the government’s
contradictory priorities and the
fulcrum of several unfolding
corruption investigations
involving hugely overpriced oil
refineries and kickback schemes
allegedly favouring government
allies. While Petrobras’s
technical prowess makes it an
industry leader, a combination of
conflicting policy goals, legal and
regulatory delays and burdensome
local-content requirements are
weighing on Petrobras’s finances
and taking some of the shine off
Brazil’s tantalizing oil prospects.
When the government, after
years of delays, finally auctioned
the pre-salt Libra field last
October, only one consortium
showed up.
Indeed, in order to keep inflation

6. 6 | 2014 | BRUNSWICK ©
under control, the government
is preventing Petrobras from
raising fuel prices at the pump –
in effect, indirectly subsidizing
consumption. At the same time,
in order to stimulate the auto
industry and protect jobs, the
government is providing tax
incentives that have led to a huge
increase in the local car fleet
(although production in the first
half of this year has dropped).
The upshot: unable to meet local
demand, Petrobras is forced
to import gasoline and diesel
at market prices, and then sell
them domestically at below-market
prices. And there’s more:
because the gas price is kept
artificially low, the alternative
of sugarcane-based ethanol has
lost attractiveness, throwing the
“green fuel” industry that is one
of Brazil’s great success stories
into crisis and adding to the
disarray in the energy sector.
The predictable result of this
apparent schizophrenia is that
Petrobras is deprived of much
needed cash even as it faces
huge capital spending demands.
While Petrobras is extracting
500,000 barrels of oil a day
from its pre-salt fields, it has
become the most-indebted and
least-profitable of the world’s 15
largest oil companies by market
value, according to Thomson
Reuters data. Among the top
five market capitalizations in the
world at its peak, Petrobras’s
stock price has plunged in the
past year – though it is now
recovering, fuelled in part by
speculation that the elections
could result in a government and
policy change.
A new growth agenda
The Petrobras story is emblematic
not just because of its huge
importance for Brazil, but
because it contains many of the
ingredients that the next Brazilian
administration –whoever the
winner – will need to address.
The business community is
pushing for deep structural
reforms, but the broader public is
more focused on issues closer to
daily life, so the government will
have to contend with conflicting
priorities. Businessmen say
unlocking Brazil’s full potential
will require a new growth agenda
that should focus on a number of
interlocking issues and barriers to
growth including:
More big picture, less
micro-management:
As evidenced by the Petrobras
example, Brazil’s government
is actively pursuing a number
of conflicting policy objectives,
and uses a variety of tools, such
as subsidies, import tariffs,
tax breaks, or local-content
requirements to achieve them.
While they may make sense
individually, they result in a crazy-quilt
of seemingly inconsistent
measures that boost some
sectors – but at the expense of
others. The electricity sector is
a case in point: To drive down
Brazil’s high energy costs, the
government in 2012 offered
electricity companies a choice
of automatic early renewal of
their concessions, but at lower
rates, or continuing to charge
the prevailing rates, but risk
losing their concessions when
The country's competitiveness is falling...
...but Foreign Direct Investment remains strong
(billion/USD)
Source: WEF – The Global Competitiveness Report
Source: UNCTAD and Deloitte
2012 2013 2014
48th
56th 57th
2010 2011 2012 2013 2014
48,5
66,6 65,3 64 60

7. © BRUNSWICK | 2014 | 7
they expired in 2017. While
beneficial in terms of inflation,
the lower tariffs led to a surge
of demand, just as a drought
emptied vital water reserves, as
Brazil draws nearly 80% of its
electricity from hydropower.
The upshot: distributors were
forced to buy the shortfall on
the spot market at record-high
prices, causing a financial crisis
in the sector that forced the
government to arrange a bail-out
whose cost will end up being
borne both by the Treasury and
consumers. Many businessmen
and analysts say such power
plays and targeted incentives –
which often become entrenched
regardless of their efficiency -
have hit business confidence and
deterred investment. Instead of
micro-managing and adopting
piecemeal stopgaps, Brazil would
gain from strategically focusing
its efforts on sectors where the
country has a clear competitive
advantage, developing consistency
and transparency and building
the regulatory, legal and business
environment that would favor
long-term investment. “We need
a national agenda for the next 20
or 30 years,” Cledorvino Belini,
CEO of Fiat Latin America, said
in an interview with Folha de Sao
Paulo.
Integrating into the
global economy:
Brazil offer a stunning paradox:
it is the world’s fifth-largest
recipient of foreign direct
investment, according to the
United Nations Conference on
Trade and Development, and
yet economist Edmar Bacha,
one of the authors of Brazil’s
1994 Real stabilization plan,
affirms that “Brazil is an isolated
country.” Indeed, despite a
strong and diversified industrial
base, and despite strong export
growth in recent years, notably
of commodities, Brazil’s share
of global trade in goods and
services is only 1%. Investors
pile into Brazil because of the
size of its domestic market, not
for its openness to capital flows.
Protected by high import barriers
– an average of 22.1% vs. a global
average of 14.1%, according to
The Boston Consulting Group
– local industries have little
incentive to produce goods
for export. A Toyota Corolla
produced in Brazil costs more
than twice what it costs in the US.
Take Brazil’s auto industry: while
Brazil is the world’s eighth-largest
auto producer (it was recently
overtaken by Mexico), it ranks
21st in auto exports. Mexico
exports more than 80% of its
production, Brazil exports only
about 11%, mostly to Argentina,
with whom it has a free-trade
agreement. “Brazil is among the
countries that have least exploited
the potential of international
trade,” wrote the World Bank
in 2013 in a working paper on
Brazilian exports. In a recent
report on “Connecting Brazil to
the world,” the McKinsey Global
Institute estimates that Brazil
could add up to 1.25 percentage
points to its average annual
GDP growth in the years ahead
through deeper integration into
the global markets and networks,
which “could provide competitive
pressures that spur Brazilian
companies to innovate, invest
and modernize.”
Reducing the “Brazil cost”:
A Brazilian tax lawyer, Vinicios
Leoncio, recently put together
a volume compiling all Brazil’s
tax rules. It doesn’t make for
light reading: it weighs 7.5
tons and runs at 41,266 pages.
Such is the maze of regulations
concerning taxes, labor laws,
and various licenses that Brazil
has coined the term “custo
Brasil,” or Brazil cost, to describe
this environment. In the latest
edition of the World Economic
Forum’s Global Competitiveness
Report, Brazil came out next-to-
last among 144 countries
in the “Burden of government
regulation” category, topped only
by Venezuela. “Doing business in
Brazil is excessively costly and
complex,” wrote The Boston
Consulting Group in a recent
report. According to the World
Bank’s annual “Doing business”
report, Brazil ranked 116th out
of 189 countries in terms of
business environment, and ranks
in the bottom third in a number
of categories, with a special
mention for taxes: according to
a World Bank and PwC study, it
takes the average company 2,600
hours a year to comply with all
Brazilian tax rules, more than any
other country in the world. As a
result, many businessmen cite tax
reform as an urgent priority –
and when they say that, they are
not only calling for lower rates,
(Brazil’s overall tax burden is
36% and has been rising steadily)
but a simplification of the system.
Indeed, the consequence of all
this red tape and paper work
is a huge burden on Brazil’s
productivity and competitiveness.

8. 8 | 2014 | BRUNSWICK ©
Investing in infrastructure:
After nearly a decade on the
drawing boards, the city of
Goiania recently completed a
gleaming new airport terminal.
But there’s a hitch: the access to
the terminal as well as taxiing
and parking facilities for aircraft
are not ready. “In other words,”
wrote the Estado de Sao Paulo
newspaper, “it’s a terminal that
can receive passengers, but where
planes can’t arrive.” Examples
abound of delayed or unrealized
infrastructure projects, such as
a high-speed train between Sao
Paulo and Rio de Janeiro, and
this is a major impediment to the
country’s growth. “The Brazilian
infrastructure gap plays a big role
in slowing growth that would
be much greater, given Brazil’s
resources, but for shortfalls,
especially in transportation
infrastructure and logistics,”
wrote PwC in a recent report.
In the 1970s, Brazil invested 5.4%
of its GDP in infrastructure,
according to Moody’s. Today,
that rate has slowed to 2.3%,
well below the world average of
3.8%. This has resulted in huge
bottlenecks and competitiveness
shortfalls. A few examples: 58%
of Brazil’s transport is through
roads – more than any other
continental country; but less
than 15% of Brazil’s roads are
asphalted. This means the cost
of moving soybeans from farm
to port costs $145 per ton, six
times the cost for a US producer.
Once in the clogged port, the
cargo will take an average of 5.5
days to be cleared by inspection,
compared to 2.2 days in the US.
According to the World Bank,
the cost of exporting a container
from Brazil is almost four times
that of China. Overcoming an
earlier reluctance to involve the
private sector, Ms. Rousseff’s
government in the last two years
has opened up bids for port, road
and airport concessions, but many
projects have been delayed by
regulatory hurdles and insufficient
profitability levels. As a result,
many businessmen are calling for
more flexible rules, and Paulo
Resende, the head of the Center
for Infrastructure and Logistics at
Fundaçao Dom Cabral, suggests
that Brazil create a Strategic
Infrastructure Board that would
insulate long-term projects from
political interference to speed up
much-needed investments.
Stimulating productivity
and competitiveness:
To many businessmen,
productivity is the key challenge
facing Brazilian companies.
According to a recent BCG study,
74% of Brazil’s growth over
the past decade was due to an
increase in the number of people
entering the workforce, while
only 26% was attributable to
productivity gains. This compares
with 90% productivity gains for
China or 70% for South Korea. As
a result, Brazil is losing ground in
terms of global competitiveness.
Over the past three years, Brazil
has slipped from 48th to 57th
in the World Economic Forum’s
annual Global Competitiveness
Report. Among the BRICS, only
India is behind Brazil. In a recent
report on “The shifting economics
of global manufacturing,” BCG
wrote that Brazil is now “one
of the highest-cost countries
for manufacturing.” Through
a combination of wages rising
above inflation, unfavourable
exchange rates, high energy
costs and low labor productivity,
wrote BCG , Brazil experienced
‘the most dramatic swing” in
terms of competitive edge of

9. © BRUNSWICK | 2014 | 9
the 25 economies it surveyed:
its average costs were 3% lower
than in the US in 2004 and are
estimated to be 23% higher in
2014. This makes attacking the
issue a major priority for the
incoming administration, which
would also require further
investment in education to build
human capital. “In the next
government, productivity should
be placed on the same pedestal
as were monetary stability under
the Fernando Henrique Cardoso
government and social inclusion
under the Lula government,” says
economist Fabio Giambagi, the
co-author of a recent book called
“Complacency – Why Brazil
grows less than it could.”
The above agenda is ambitious,
but Brazil has demonstrated in
the past its ability to radically
transform itself. Today, its
transformation is incomplete
and it cannot count on high
commodity prices or continued
credit-driven consumption
to stimulate growth. The
country is at a turning point,
and while change is likely
to be gradual, owing to the
country’s complexities, the next
government will have the task of
reinventing Brazil’s growth model
to consolidate the country’s
spectacular advances of the past
two decades. Brazil may not have
won the World Cup, but it has
many assets on its side to be a
winner in the global economy.

10. 10 | 2014 | BRUNSWICK ©
The three main contenders
Dilma Rousseff, Workers’ Party (PT)
Dilma Rousseff, 66, is Brazil’s
incumbent President. The
hand-picked successor of the
phenomenally popular outgoing
President Luis Inacio Lula
da Silva, who could not seek
re-election after two terms
in office, she became Brazil’s
first female President in 2010,
elected with 56.05% of the
vote. She is regarded as a tough
manager and her continuation of
Lula’s social policies have won
her support among the popular
classes, but her interventionist
policies alienated many in
the business community and
economic growth slowed during
her government. She now says
“what is good will continue,
what isn’t will change.”
Ms. Rousseff was a left-wing
guerrilla in her youth, and was
arrested and tortured by Brazil’s
then-military dictatorship in
the early 1970s. An economist
by training, Ms. Rousseff joined
the Workers’ Party in 2000.
She became Energy Minister in
2003 in Lula’s first government,
and was his powerful Chief of
Staff from 2005 to 2010. In
those positions, she also chaired
Petrobras’s Board of Directors.
Economic policy:
Ms. Rousseff has not yet
published her economic
program, but has announced
she would change Finance
Ministers, indicating an
inflection in economic policy. If
re-elected, economists expect
her to gradually raise prices
that have remained frozen in
order to keep a lid on inflation,
such as gas and energy; seek
to gradually reach the middle
of the range of 4.5% to 6.5%
that the government has set
for inflation; return to more
orthodoxy in pushing for
a primary budget surplus;
and continue to open up
infrastructure projects to the
private sector while maintaining
a role for the state.
Key strengths:
Strong voter support
from beneficiaries of her
government’s Bolsa Familia
program and other welfare
policies. She also can count
on a strong nationwide party
apparatus and the power of
incumbency.
Key weaknesses:
After 12 years in power,
the Workers’ Party has lost
middle-class support and
the economic slowdown and
recent corruption scandals
involving her party (Ms.
Rousseff’s probity has not been
questioned) have prompted a
groundswell movement in favor
of change.

11. © BRUNSWICK | 2014 | 11
The three main contenders (cont.)
Marina Silva, Brazilian Socialist Party (PSB)
Though polls show she has a
solid chance of being elected,
Ms. Silva, 56, is literally an
accidental candidate: Having
failed in her bid to be a
candidate in her own right, she
threw her support behind PSB
candidate Eduardo Campos
in return for being named his
running-mate, and only became
the party’s candidate when Mr.
Campos was killed in a plane
crash in August. Her criticism of
old-style politics struck a chord
with voters and she rose to the
top of the polls.
Ms. Silva’s biography reads
like an inspirational fairy tale
that rivals that of Lula’s ascent.
One of 11 children born into a
family of rubber-tappers in the
Amazonian state of Acre, Ms.
Silva did not learn to read or
write until she was 16 and later
worked as a maid. She began
her political life campaigning
against deforestation alongside
rainforest activist Chico
Mendes, who was assassinated
in 1988, before becoming a
Senator. After joining Lula’s
Workers’ Party, she became
Environment Minister from
2003 to 2008 (serving in
the same government as Ms.
Rousseff). Parting ways with
Lula and his party, she joined
the Green Party in 2009, and
ran for President under the
Green banner in 2010, finishing
a strong third with 19.3% of the
vote in the first round.
Economic Policy:
Ms. Silva has sought to reassure
the business community by
advocating a law granting
independence to the Central
Bank. Her economic advisers
have also adopted a tough line
on fighting inflation and pushing
for fiscal responsibility – while
at the same time Ms. Silva
has talked of expanding some
existing welfare programs,
raising questions on their
financing. Moreover, her talk
of boosting renewable energies
and biofuels and scant mentions
of Brazil’s pre-salt oilfields
have raised doubts about her
energy policies.
Key strengths:
Her uplifting life story and call
for “new politics” resonates with
Brazilian voters and her status
as a relative outsider allows
her to embody Brazil’s desire
for change.
Key weaknesses:
A need to reconcile her party’s
more pro-business stand with
her personal environmental
and religious convictions (she
is a Pentecostal Christian who
is said to read the Bible daily).
An untested leader with a small
electoral base, she is vulnerable
to horse-trading.

12. 12 | 2014 | BRUNSWICK ©
The three main contenders (cont.)
Aécio Neves, Brazilian Social Democratic Party (PSDB)
Like many Brazilian politicians,
Mr. Neves, 54, was born into
politics. He is the grandson of
Tancredo Neves, a prominent
figure in Brazil who pushed for
a return to democracy under
Brazil’s military regime and was
elected President in 1985 –only
to die of health complications
even before taking office. Some
say Aécio Neves, who worked
alongside his grandfather as a
youth, has been preparing all his
life to be President. He presents
his candidacy as ‘safe change.”
Mr. Neves was Governor of
Minas Gerais, Brazil’s second-largest
electoral college, from
2003 to 2010 and was then
elected Senator. As Governor,
he gained a reputation for sound
management, slashing some
public salaries and cutting his
own pay as part of a drive to
eliminate the state’s budget
deficit. He also received
good marks for his state’s
education policies.
Economic policy:
Mr. Neves is considered the
most pro-business of the
top three contenders. His
economic policy would be
a return to the orthodox
policies pursued by Brazil’s
last PSDB President, Fernando
Henrique Cardoso (the father
of Brazil’s 1994 economic
stabilization plan) and by Lula
in his first administration: a
“credibility shock” through
fiscal responsibility, control of
inflation (with a likely lowering
of the target over time) and
a fluctuating exchange rate.
Economists say he would
also push for private-sector
involvement in infrastructure.
Key strengths:
His designation, way ahead of
the ballot, of former Central
Bank governor Arminio Fraga as
his Finance Minister if elected
has reassured the business
community that he will pursue
orthodox economic policies.
Key weaknesses:
Lack of national projection and
a somewhat stiff style are an
obstacle to reaching the runoff.
Critics say his economic policies
could lead to a recession.

13. © BRUNSWICK | 2014 | 13
For more information
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Sao Paulo, SP, Brasil, 04548-004
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Email: saopaulooffice@brunswickgroup.com
www.BrunswickGroup.com
Thomas Kamm
Partner
+55 11 3076 7629
tkamm@brunswickgroup.com
Thomas Kamm is co-head of the São Paulo office. He has
extensive experience in diverse aspects of corporate
communications, including corporate positioning, media
relations, financial communications, M&A and IPOs. Thomas
acts as a senior consultant to clients on corporate and
financial issues, with a particular emphasis on retail and
consumer goods.
Thomas joined Brunswick in Paris in 2005, prior to which
he worked for 18 years as a foreign correspondent and
bureau chief for The Wall Street Journal in Europe, South
America – he was based in Rio de Janeiro from 1989 to
1994 - and Africa. Subsequently, he was vice-president for
communications and corporate affairs and a member of
the Executive Committee of PPR (now called Kering), the
French luxury and retail Group.