Editorial comment
October sees national elections in Brazil, where citizens will vote on Presidential, National Congress, State Government and State Congress positions. The frontrunner to replace existing President Dilma Rousseff is Marina Silva, who stepped up to represent the Brazilian Socialist Party (PSB) when her running mate (and former presidential candidate for the party) Eduardo Campos was tragically killed in a plane crash this August.
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Silva’s subsequent rise in the polls is impressive: there has been such a shift in the last month or so, that statistics indicate that while she might not win outright in the election, she would probably win enough support to force a run-off, and would go on to win in a second round.
Silva was born in a remote corner of the Amazon, daughter of impoverished rubber tappers who collected latex sap. She taught herself to read and went on to a career in teaching. Her political awakening came from confronting aggressive ranchers in her forest home. Silva’s credentials appeal to a wide base: her humble upbringing, her environmentalism, her belief in sustainability, her deeply held religious beliefs – each attracts support from different polling groups, and especially those who have recently been lifted up out of poverty to form a huge emerging middle class. These newly prosperous citizens find themselves rejoining the job market and playing a bigger part in society. As a result, they expect a bit more for their tax-paying buck.
Silva is formerly of the Green Party. Her activist past informs her popularity: she has captured the hearts of the millions of Brazilians who are disaffected with the status quo (remember those riots last year, where a million people staged demonstrations against corruption, poor public services and unequal distribution of wealth?)
Most of the pre-election speculation rests on economic factors, with Brazil in a peculiar position of having experienced a 7.5% growth spurt in the economy in 2010, followed by a slide into recession (growth is predicted to be less than 1% in 2014). The business community seems to have lost faith in Rousseff’s ability to jumpstart the economy. So here comes Silva, running on policies of orthodox economic measures and large budget cuts.
But let’s get back to this ex-Green Party stuff. What does it mean for the future of Brazil’s oil and gas industry, if Silva is elected? She is an advocate for environmentalism, meaning more wind power and renewable sources; more electric power, tighter regulations in the energy industry; a reduction in the consumption of fossil fuels, and an increased emphasis on factoring in environmental costs to all construction and infrastructure works.
In a recent interview, Silva denied accusations that she would stop exploration of Brazil’s pre-salt reserves if elected. She emphasised that the pre-salt resources are irreplaceable and that they would be used sensibly, to generate income for healthcare and education. She also spoke out against corruption, no doubt referring to recent allegations of corruption and bribery among government officials and Petrobras directors.
Silva has pledged to foster competition with foreign companies to make Brazilian firms more efficient. Current local content rules in the oil and gas industry mandate that foreign companies partner with Petrobras to tap the pre-salt, handing over at least 30% in each project. President Dilma has always wanted a strong state grip on the energy sector. If Silva gets in, might she attract more private investment by being less keen to uphold Petrobras’ monopoly and thus encouraging more democratic practice? And what about pipelines? As the minister in charge of environmental licensing in the early 2000s, Silva was criticised for holding up pipeline projects in the Amazon with red tape. If elected, she would have to balance her environmental convictions with proactive infrastructure development: because if it’s the growing middle class that has voted you in, they’ll demand less red tape, more action.
