Brazil's opposition: When toucans can't

The opposition needs generational and policy change if it is to stay relevant

Apr 7th 2011 | SÃO PAULO | The Economist

TOUCANS, Brazilians say, simply cannot get along together: those big beaks get in the way. They are talking not about the colourful native birds, but about the leaders of the Party of Brazilian Social Democracy (PSDB), dubbed tucanos after their party's symbol. The PSDB governed Brazil for eight years under Fernando Henrique Cardoso, who laid the foundations for the country's subsequent economic success. It is still Brazil's biggest opposition party, but in the past three elections it has steadily lost seats in both houses of congress. The next presidential election is not until 2014, but already three big beaks are squabbling over who should be the candidate. Many think the party will split unless it swiftly unites behind one of them.

The bills in question belong to José Serra, the party's defeated presidential candidate in 2002 and 2010; Geraldo Alckmin, governor of São Paulo state and presidential loser in 2006; and Aécio Neves, who was governor of the state of Minas Gerais until he stepped down last year to run for and win a Senate seat. Pundits expected that after his second defeat, Mr Serra would step aside in favour of the younger, more charismatic Mr Neves. But by ending his concession speech with the words: "This is not 'farewell', but 'see you later'," he made it clear that he would not.

Mr Alckmin is trying to sideline Mr Serra by touting him as the PSDB's candidate in 2012 for mayor of São Paulo (a job Mr Serra held in 2005-06). The current mayor, Gilberto Kassab, a friend, is setting up a new party that some think could accommodate Mr Serra if the PSDB does not bend to his will. If he is overlooked again, Mr Neves, too, might well leave the PSDB. With him would go the party's best hope of regaining the presidency.

Supporters of both Mr Serra and Mr Alckmin take comfort from the career of Luiz Inácio Lula da Silva, who only became Brazil's president on his fourth try. But the analogy is strained. Lula's Workers' Party (PT) built a powerful organisation when it was in opposition; the PSDB, by contrast, is growing weaker.

Unlike the PT, the PSDB was always more of a club of brilliant technocrats than a mass organisation. But younger tucanos complain that the party's founding generation, who came to prominence during Brazil's military dictatorship of 1964-85, have failed to yield to fresh faces. In last year's election many younger voters plumped for Marina Silva, a PT dissident running for the Green Party. Middle-class Brazilians, the PSDB's bedrock supporters, could also defect. Polls suggest that Dilma Rousseff, Lula's successor, is both more popular than he was three months into his first term and, unlike him, equally well thought of by rich and poor.

Just as damaging as the PSDB's profusion of would-be leaders is its lack of a distinctive programme. When Lula took office he adopted tucano economic policies wholesale. There is now little ideological distance between the PT, whose roots are in the labour movement, and the PSDB. While Lula was president the PSDB sold itself as the party of good administration, but that is harder against Ms Rousseff, who is known as a capable manager. Even privatisation, embraced by Mr Cardoso but excoriated by Lula, is no longer a defining difference. Ms Rousseff has said she will open up airports to private investment.

This policy overlap will confront the eventual victor of the PSDB's power struggle with a difficult choice. Should the party stick to the centre-left and hope that the tide turns against the PT—because of a huge scandal, say, or an economic bust? Or should it move rightward, towards political territory that is almost unoccupied.

Although Brazil's tax take is high for a middle-income country, politicians have long believed that public spending, not tax cuts, gets them elected. The poorish majority will be grateful for any handout, the argument goes, and not notice how much tax they are paying. Indeed, Bolsa Família, Lula's flagship anti-poverty programme, returns less to many recipients than they pay in sales tax on food.

A politician with the courage to challenge the tax-and-spend consensus could reap rich electoral rewards, says Alberto Almeida of Instituto Análise, a consultancy in São Paulo. In recent polls and focus groups he has found that Brazilians, including the poorest, have woken up to the fact that they pay high taxes. Lula's decision to prop up demand during the world recession by temporarily slashing the sales tax on white goods acted as a tax primer, the pollsters found. Brazilians had not previously realised that such a big chunk of the cost of a fridge or cooker goes to the government. Asked whether they thought the tax cut should be kept, or made even deeper, or reversed and the extra revenue used for social programmes, two-thirds plumped for even deeper cuts. That is one of several reasons why the toucans need to find a new song to warble.