If Dilma doesn’t have the public support what does she have?

By Emerging Money>,

Shutterstock photo

Recent polls out of Sao Paulo show that only 30% vs. 51% in last survey intend to vote for President Dilma's in the Oct 2014 elections which suddenly are looming.

[caption id="attachment_56850" align="alignright" width="300" caption="Brazilian president Dilma Rousseff"] Image courtesy the Brazilian Ministry of Culture: http://www.flickr.com/people/ministeriodacultura/ [/caption]

That's a major fall from grace and puts the Workers Party in a tight place going into a difficult period with protests building. The irony is that President Dilma who is a technocrat came to office with nothing more than this public blanket of support.

The cruel irony is that after 18months of unorthodox fiscal and monetary policy in Brazil ( EWZ , quote ) intended to keep her popularity high, it is all backfiring.  Dilma chose a path of increasing social support netting for the lower class Brazilian that has involved taking on corporate lobbies and legacy entitlements  for some of the biggest sectors of the economy.

That in turn has made the Brazilian stock market a no-touch for most global investors, and a dangerous one for locals and dedicated emerging market investors.  Brazil is -51% in USD terms since April 2011.

There are many reasons for this including a slower global economy where Brazil's core commodity exports are down with China's demand. In fact, there are arguments that so goes the commodity super-cycle so goes Brazil's economy.

It was easy to pave the streets in gold when iron ore prices were $180/ton and when agriculture and ethanol were booming etc.

Let's see how it goes for Dilma when she can't give away the store to keep the masses happy and to transport the next 30 million people from poverty into lower middles class, which had been Lula's and Dilma's claims to fame.

It's also what made Brazil the goto BRIC when people couldn't get comfortable with China risk, Putinomics, and India's perpetual transition to a true democracy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Stocks:

More from Emerging Money


Emerging Money

Emerging Money

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com