Welcome Avatar! On Sunday, Lula secured a fourth turn in Brazil (below we will go into the details of what “secured” actually means). Given the fact that Brazil is Argentina’s biggest customer and that Milei and Lula are diametrically opposed from a political standpoint, this directly impacts Argentina in more ways than one.
Deixe-me ir, preciso andar
Vou por aí a procurar
Rir pra não chorar
— Candeia, “Preciso me Encontrar,” as recorded by Cartola, 1976
The title of this piece refers to a popular saying in Brazil: laugh so you don’t cry. Argentina has its own Río de la Plata version: reír para no llorar. After the Brazilian elections had ended on Sunday night, both banks of the Iguazú were doing one or the other.
Quickly after it was confirmed that sitting president Lula da Silva had won the elections, messages from other heads of state in the region started rolling in, except for one. Javier Milei has not congratulated Lula and his administration already stated that it doesn’t plan to do so because of ideological differences (goes without saying that Lula did not congratulate Milei either).
The president-elect secured 51.77% of the valid votes, compared to 48.23% for Flavio Bolsonaro. The result reverses what happened in the first round, when Bolsonaro prevailed with 47.15% against Lula’s 45.02%. A comeback like this has never happened in Brazilian history before, and as we will see below the results are not without controversy.
On Monday the Bovespa tanked -14% after digesting what Lula IV means for Brazil, with some stocks getting hammered with declines of over 50%. Argentines are familiar with these types of market reactions, the last one being the second biggest country stock market crash in history in 2019, after Peronists won the PASO primaries and Macri’s reelection became uncertain. Yesterday’s crash in Brazil triggered a circuit breaker in São Paulo, and it was the single biggest one-day move since 1999.
Besides the existing ideological differences in both administrations and economic slowdown (especially on the Argentine side as a customer), Lula is now the single most important foreign actor in Argentina’s 2027 presidential elections. We don’t have to go that far back to see the role he played in 2023, as readers of The Milei Starter Pack will remember.
During both debates Lula also kept hammering on Flávio Bolsonaro being a “friend of Milei”, while repeating the same fake news he later used as an excuse for total social media censorship right after he won the elections: Argentina is so empoverished under Milei that consumers are now buying donkey meat instead of beef, lol.
Below I will go over how irregular Sunday night actually was, and what to expect from the perspective of the Donroe Doctrine for both Brazil and Argentina.
