Latin America’s two largest nations by population and by economy both went into a radically new direction during the last presidential elections. Andrés Manuel López Obrador and Jair Bolsonaro are the faces of this new direction. The winning formula of both nationalist leaders consists most importantly of their fight against corrupt elites.

Brazil will go to the polls on October 28 for the run-off between the two last candidates, Jair Bolsonaro and Fernando Haddad, but Bolsonaro will most likely be elected president of Brazil. Polls give the rightwing congressman 59% versus 41% for his rival. Bolsonaro seems to be winning because of several crises in Brazil. First, a crisis of violent crime; the country saw a record 63,880 homicides in 2017, up 2.9% from 2016. Second, a political crisis marked by corruption. The Car Wash corruption cases have led to investigations and indictments of leading figures in every big political party and discredited the entire political class. Third, Brazil is struggling with an economic crisis. The country is emerging from its worst-ever recession and is recovering only slowly. Budget deficit is 8% of GDP and the government debt has spiraled from 60% to 84% of GDP in four years’ time. As the Brazilian population lost faith in the established political system to fight these crises, the answer was the election of an extreme alternative: a former army officer with a “law-and-order” style of governance, who wants to relax gun laws and is pro-torture. In order to address the economic hard times in the country, Bolsonaro envisions a key role for the private sector. Currently, Brazil ranks 153d out of 180 countries evaluated on the degree to which countries pursue free market economics, according the Heritage Foundation’s Index of Economic Freedom. Although Bolsonaro has provided little detail about his economic agenda, his focus will be on market-friendly policy and privatizing state enterprises. This poses a stark contrast to his entire career up until now, as he has heretofore focused on nationalizing economic policy. Furthermore, he has promised to revoke many protective laws for the tropical forests in order to open more lands for Brazil’s powerful agribusiness. In terms of foreign policy, Bolsonaro plans to put this in the hands of a diplomat who has praised the nationalist agenda of U.S. President Donald Trump. Policy experts said the choice fits conservative firebrand Jair Bolsonaro’s plan to make Brazil’s most dramatic foreign policy shift in decades. Bolsonaro has already vowed to rethink membership in developing nation blocs Mercosur and BRICS and move the country’s embassy in Israel to Jerusalem, embracing Trump as few in Latin America have done. As one Brazilian academic told the Washington Post: “Brazil is now surfing the wave of global conservatism, an anti-globalist movement all across the world.” To sum up, Brazil is desperate for change and Bolsonaro appears to be the person Brazilians will choose to be that agent of change. But Brazil is a country of more than 200 million people, with an array of entrenched interests that logically preclude political extremism. The new president will have to operate in an extremely divided and diverse parliament (the senate has representatives from 21 different parties). Although Bolsonaro is elected on the basis of his promises to save the country from its current political and economic crises, it is not clear whether he would get very far.

In Mexico, where presidential elections already took place a few months earlier, the new president has already been caught up by this reality. The promises Obrador made during his presidential campaign are already colliding with the complexity of the politically divided country. Currently, he is moving around the country, trying to whittle down his supporters’ outsize expectations. This means that both Mexico and Brazil are heading for uncertainty and their new leaders will be urged to cope with the polarized political landscape and domestic affairs.

RISKS MARKED ON THE RISK RADAR AS NUMBER 1: Protectionism / reform LatAm

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