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This week, Brazil’s stock index dipped sharply and the national currency, the real, slumped after polls showed incumbent Brazilian President Dilma Rousseff securing a lead in the run-up to Sunday’s first round of voting. This reaction by capital markets reflects misgivings about the continuation of statist policies that have dried up jobs, driven up debt and led the world’s seventh-largest economy into a recession.

Although Rousseff has recovered her lead over the 10 other candidates, she will likely fall short of obtaining an outright majority and will be forced into a run-off Oct. 26 against free-market maverick Marina Silva. And while most observers expect Rousseff to win re-election by challenging Silva’s lack of executive experience, the campaign has exposed profound popular doubts about the president’s own management of Brazil’s economy.

Silva’s steady rise in the polls buoyed private-sector hopes, but markets tumbled this week after a series of polls showed Silva losing her lead over the incumbent in the projected second round of voting. On Monday, Petrobras shares fell more than 11 percent – the largest one-day loss in nearly six years. Shares in the state-run Banco do Brasil fell nearly 8.5 percent, while the real lost as much as 2.5 percent of its value against the U.S. dollar.

Published on Oct. 2nd, http://www.realclearworld.com/articles/2014/10/02/brazilians_may_opt_for_experience_over_change_in_election_110732-2.html

Roger Noriega was U.S. ambassador to the Organization of American States and assistant secretary of State for Western Hemisphere Affairs in the administration of President George W. Bush from 2001 to 2005 and is a visiting fellow at the American Enterprise Institute. His firm, Vision Americas LLC, represents U.S. and foreign clients.

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