Faced with a close election, businessmen review support strategy

With the result of the presidential election in the first round, big businessmen in the productive and financial sector are evaluating how to position themselves in a political dispute that, for them, seems crystallized between the poorest, main voters of Lula (PT), and the richest, who chose Jair Bolsonaro (PL).

This impasse led well-known names in the national business community to avoid public comments on the result of the first round which, for this group, revealed a country divided between Lula’s left and Bolsonaro’s ally.

wanted by Sheetpresidents and owners of retail chains, banks, brokers, technology companies, insurance companies, construction companies, among other sectors, did not want to manifest themselves after the announcement of the result by the TSE (Superior Electoral Court) because, according to them, they need to outline the best policy to act in this unprecedented scenario.

In the opinion of the business community, taking sides in such a polarized environment would be bad for business — directed at all social classes.

A banker from São Paulo, for example, said, on condition of anonymity, that the polls revealed the “revenge of the South and Southeast, which pull the country’s GDP” against PTismo and gave Bolsonaro a greater margin of votes, who personifies the right.

On the other hand, he identifies the current president’s difficulty in taking Lula’s votes among the less favored, despite having poured a lot of public money into Auxílio Brasil.

One of the biggest shareholders of an important retail chain believes that this division is bad for business and, therefore, should meet the group’s executives this week to discuss scenarios for the second round.

Brokerages and investment banks have also scheduled discussions to define political positioning strategies in the second round.

The idea is to maintain neutrality in an environment of surprises, especially since the future president will have to face a Congress that will start 2023 with the strongest parties in the center. In addition, there is a chance of a merger between the PP parties and União Brasil.

“This situation is very sensitive,” said João Paulo Luque, founder of AFS Capital, one of the investment arms of BTG, which handles almost R$1 billion in assets.

“This transfer of power to the Legislature is increasingly clear and, whether Lula or Bolsonaro, it will not be easy to pass an agenda of its own without an agreement with the Legislative.”

For him, the election result showed a very divided country.

“Bolsonaro has shown surprising strength,” said mega-investor Naji Nahas, an emblematic figure in the Brazilian financial market, known for the episode of the Rio de Janeiro Stock Exchange crash. He was cleared of the market manipulation charges that led to the case.

Nahas, who settled in the country five decades ago and has maintained good relations with presidents ever since, said it was very difficult to predict who would win. “That’s why no one will take a stand.”

One of the partners in one of the largest investment funds in the country, which controls retail and infrastructure giants, had planned to make a public statement if Lula won in the first round, something he believed was possible given the results of the voting intentions polls. She changed her position with half the polls open.

“Once the hypothesis of suicide has been ruled out, all we have left is optimism.” The phrase, by French novelist Alberto Camus (1913-1960), Nobel Prize in Literature, was used by a top executive heard by the Sheet to express their state of mind in the face of Bolsonaro’s growth in the first round.

The challenges in the economy

Whether Lula or Bolsonaro is the winner in the second round, for these businessmen, the difficulty will be the “third round”, what they call the “next day”.

They do not believe that it will be possible to pacify the country in the face of such great polarization and the cost of the election will come knocking.

Another banker interviewed on condition of anonymity believes that the new government will have to “make peace” with the Central Bank and take measures that allow the regulator to lower interest rates.

He said that there is no point in insisting on the electoral narrative that we have had deflation for three months, because the BC has been taking measures in the opposite direction — raising interest rates to curb inflation.

This banker, one of the eight largest in the country, believes that, despite the IPCA (Extended Consumer Price Index) continuing to fall, the inflation of foodstuffs and other items weighs heavily on the poorest – today Lula’s main voters, especially in the North and Northeast, regions where Bolsonaro finds it more difficult to win votes.

For Jerome Cadier, president of Latam Brasil, regardless of the election result, the first priority of the new government must be to reduce social inequalities in Brazil.

“The second priority is to reduce the cost of Brazil, so that we can once again have significant economic growth. And the third is to guarantee the efficiency of the public sector, with the absolute reduction of corruption in the country”, stated Cadier.

In industry, the view is that the government will have to maintain social spending and, for that, it will have to carry out reforms, especially administrative and tax reforms.

A shareholder of an important steel company believes that, without it, there will be no resources. For him, it will also not be possible to give up some control of expenses.

Although he does not defend the full maintenance of the spending ceiling, a measure that corrects current expenses for the inflation of the previous year, this businessman defends that there is some fiscal anchor.

In the opinion of Caio Magri, president of the Ethos Institute, which promotes the concepts of environmental, social and corporate responsibility (ESG) in companies, “it is necessary to better assess what society really wants”.

Magri participated, this Sunday (2), in the Civic Vigil for the Integrity of the Electoral Process, at the headquarters of the Brazilian Bar Association (OAB) in São Paulo. Ethos has 454 associates, including Carrefour, Renner, Natura and Grupo Pão de Açúcar.