MOSCOW, October 6 (RIA Novosti), Daria Chernyshova - Electoral preferences among voters in Brazil's presidential election held Sunday reflect the advantages and disadvantages of the current "state capitalism" model, with those favoring more state intervention in the economy voting for Dilma Rousseff, and those favoring capitalism – for Aecio Neves, director of Columbia University's BRICLab told RIA Novosti on Monday.
"Now the electoral preferences will pretty much reflect pros and cons of Brazil's current model of 'state capitalism,'" Marcos Troyjo said. "Those who favor more state will side with Dilma, those who favor more capitalism will go with Aecio. One way or the other, it will be a close call."
The incumbent president Dilma Rousseff from the Worker's Party (Partido dos Trabalhadores, PT) and Social Democracy Party (PSDB) candidate Aecio Neves received 41.39 and 33.78 percent of the votes respectively in the general election held Sunday.
The two candidates will face each other in the second round of elections on October 26.
"The results of the first round clearly show that there is a widespread sentiment favoring change in Brazil," Troyjo said. "Total opposition votes added 57 million, whereas the incumbent Dilma Rousseff got 41 million. Marina Silva only totaled 21 percent of the votes because of her weak party machine, the fact that she was thrown into the dispute less than two months ago given the tragic death of Eduardo Campos, who was heading the ticket."
Speaking of economic policy, Troyjo noted that Rousseff will continue with the "state capitalism" model of the past 12 years.
"Dilma's approach will once again focus on cyclical attempts to promote growth via the appetite of Brazil's domestic market for high levels of consumption. This has been accompanied in the past 12 years by income distribution mechanisms that have indeed lifted the lives of millions," Troyjo told RIA Novosti.
In the meantime, Neves is widely seen as a pro-business candidate. Troyjo pointed out that Neves heads a well-structured political party and his economic team comprises well-versed and experienced economists.
"If Aecio is elected the economic horizon will improve and current skepticism would be reverted. I think we would move swiftly back to the so-called macroeconomic tripod [inflation targeting, fiscal responsibility and a floating exchange rate regime]," Troyjo said.
In terms of foreign policy, he stressed that Rousseff would continue with the "South-South" approach, while relations with Europe and the United States would remain "as second hand priorities."
However, if Neves wins the runoff, "Brazil would engage in the negotiation of dynamic free trade agreements [without the straitjackets imposed by Mercosur] with the United States, the European Union and the Pacific Alliance countries [Mexico, Colombia, Peru and Chile]," Troyjo said.
"If Aecio is elected on 26 October we will experience what I call a 'Rainbow Effect' – the impact of hard but necessary macroeconomic adjustments will be compensated by a very positive sentiment about how the economy will be managed and on overall governance and efficiency of the public sector," Troyjo concluded.
