Domestic Politics Crib Sheet: Social Tensions On The Rise


Signs of further social unrest are beginning to crop up just as Brazil's 2014 general election is starting to heat up, reinforcing our core view that while President Dilma Rousseff is the candidate best positioned to win the presidency in October, she will face a number of headwinds in the coming months. Indeed, rolezinhos - gatherings that are advertised through social media and attract youths who are often from poor neighbourhoods - have started to grab both domestic and international headlines in recent months. Generally taking place in or outside of major shopping malls, they have seen malls hire private security, fearing that the gatherings could deter the malls' middle and upper middle class clientele, or even erupt in violence or looting. We believe that tensions between youths and hired guards or police could be a flashpoint for protests in the coming months.

In addition, we have seen protests that echo those that occurred in June 2013 ramp up in recent weeks. Notably, a TV cameraman died during a street protest against bus fare hikes in Rio de Janeiro, the same issue that sparked widespread demonstrations in June 2013. We believe that an increasingly violent handling of protests by police could serve as another catalyst for a more widespread protest movement, particularly given that a number of the structural issues protestors identified last year persist, namely the poor quality of public services, the high cost of living, and a lack of government transparency. The re-emergence of national protests would likely see a significant drop in the polls for Rousseff, who is favoured to win given strong polling numbers and a somewhat fragmented opposition. Furthermore, mass social unrest would likely galvanise the positions of opposition candidates, posing risks to our view that the incumbent remains likely to win re-election this year.

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This article is tagged to:
Sector: Country Risk
Geography: Brazil

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