As the World Cup kicks off in Sao Paolo this week, the home team is the runaway favorite, with a 45 percent chance of winning the tournament, according to Nate Silver on FiveThirtyEight and 48.5 percent probability according to the statistical boffins at Goldman Sachs. But apart from the bookmakers — who stand to lose a fortune if Brazil wins, since they are offering odds of around 3 to 1, instead of the 1 to 1 suggested by Silver’s and Goldman’s calculations — another, more surprising, group is secretly rooting against the favorite: Brazil’s own financial and business community, along with much of the country’s middle class.
That, at least, was my strong impression after two weeks visiting companies and financial institutions in Brazil. This unusual reversal of national spirit does not represent a breakdown of patriotism. Rather the opposite.
Brazil’s next presidential election is in October, and virtually everyone in business and finance believes that President Dilma Rousseff, the incumbent, must be defeated to save the economy. Whenever a new opinion poll shows a narrowing lead for Dilma (as Brazilians invariably call her), share prices jump. Yet still she remains well ahead of both her opponents.
The problem for Rousseff’s detractors is that, despite Brazil’s deteriorating economic performance since 2011, she represents the same party and ideology as her predecessor, Lula da Silva, who was president from 2003 to 2010. Rousseff is credited with the achievements of da Silva’s eight-year tenure, when Brazil was probably the world’s best performing “middle income” emerging economy.