Brazils worst kept secret. José Serra, the
68-year-old governor of São Paulo a man who has
dreamt of becoming president since he was a teenager
might just possibly be standing as a presidential
The ambitious politician from the social democratic party
(PSDB), who was defeated by president Luiz Inácio Lula
da Silva in a run-off vote in 2002, is poised perhaps
to launch another presidential bid. This time its
against Dilma Rousseff, president Lulas chief of staff.
Serra has enjoyed broad support from his party, especially
after another contender, Aécio Neves, governor of Minas
Gerais, dropped out of the race.
But so far, Serra isnt saying anything.
He intends waiting as long as possible before entering the
electoral arena possibly until early April, six months
before polling day. Meanwhile the incumbents candidate,
Rousseff, is gaining popularity, according to opinion polls,
thanks to Lulas wholehearted support.
Nevertheless, to those who press him to rush to the
battleground, Serra says he has nerves of
It is difficult to know what is going through
Serras mind, says Eduardo Bernini, a former head of
the energy company AES in São Paulo, who has dealt
closely with politicians.
Even though financial markets have come to like Lula, they
are now much more sympathetic to Serras economic policies
than Rousseffs, according to a JP Morgan report. It says:
While the governments candidate will probably
strengthen a development model based on a strong state and on
public intervention in the private sector, long-term issues
would be better dealt with by the opposition
Serras fiscal record is strong, and this is expected
to make a difference. His policy options will include a strong
fiscal adjustment, especially at the beginning of his term. In
turn, the fiscal space would help loosen monetary policy, pave
the way for a depreciation of the exchange rate and address the
thorny issue of the current account gap.
He could improve the quality of the management of the
state, says Maílson da Nóbrega, a former
finance minister. Nevertheless, this may not be easily
implemented as Serra would have to rely on a solid majority in
Congress to pass fiscal reforms.
Serra, a long-time critic of high interest rates and the
appreciation of the Brazilian currency in the foreign exchange
markets, is not expected to make any radical moves. I
cannot imagine Serra telling the central bank to cut interest
rates. This would trigger a confidence crisis. Hes not
silly. Hes a very experienced politician, says