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Tuesday, 06/08/2010 1:13:43 AM

Tuesday, June 08, 2010 1:13:43 AM

Post# of 29408
Lula’s Candidate Surges in Brazilian Poll

[This might be consequential for investors in PBR and VALE, among others. See #msg-44866628 for background.]

http://online.wsj.com/article/SB20001424052748704749904575292604254029586.html

›JUNE 8, 2010
By ROGERIO JELMAYER and JOHN LYONS

SÃO PAULO—Brazilian President Luiz Inácio Lula da Silva's hand-picked successor has surged against her rival in a series of new polls, increasing the chances that the leftist Workers Party will remain in power after October elections.

Dilma Rousseff, Mr. da Silva's former chief of staff and the Workers' Party presidential candidate, rose five percentage points since a similar poll was taken in April. She is now tied at 37% with opposition politician José Serra, a former São Paulo governor, according to the Ibope research firm.

Mr. Serra's tally of likely voters fell by three percentage points in the poll released over the weekend. Other recent polls show similar results.

While presidential campaigns in this soccer-crazed nation don't kick into gear until after the World Cup concludes in July, Ms. Rousseff appears to have notched early momentum. One explanation may be an economic forecast of 6% growth this year, as well as expanded government aid for low-income families, some analysts say.

Another advantage Ms. Rousseff is exploiting is the popularity of President da Silva, who is ineligible to run after two terms. Mr. da Silva defeated Mr. Serra in 2002. Despite protests that such activities go against electoral rules, Mr. da Silva appears with Ms. Rousseff at public events.

A onetime Marxist guerrilla, Ms. Rousseff has worked to disarm critics who say she will steer the nation sharply to the left. During a recent speech to investors in New York, for example Ms. Rousseff said she is committed to preserving a floating exchange rate, fighting inflation and maintaining the government's hands-off policy toward central-bank rate decisions.

Some Brazilian brokers say they doubt Ms. Rousseff's commitment to pro-market economics.

Her radical background appears unlikely to spook international investors, in part because similar warnings eight years ago about Mr. da Silva turned out to be unfounded.


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