Democracy Lab

It's the Brazilians, Stupid

Meet Brazil's James Carville -- and the other political consultants who are shaking up Latin America's electoral landscape.

RIO DE JANEIRO -- Let's say that you're an incumbent president with a life-threatening illness. Your economy is a mess, with inflation pushing 25 percent a year and store-bought goods like milk and eggs rare as buried treasure. Bridges are collapsing, a giant oil refinery goes up in a deadly fireball, and flipping a switch may or may not turn on the lights. So much the better for the busy criminals, who have turned your city streets into some of the bloodiest in the world. What can you possibly do to win re-election?

Call João Santana, of course. That, at any rate, is what Hugo Chávez did ahead of the hotly disputed presidential elections in Venezuela last month. Sure, the Venezuelan clown prince was already a political legend, and his heavy-handed use of electoral resources -- such as his near-unchallenged domination of the media and the judiciary and the looting of the state treasury to finance handouts to voters -- didn't hurt. But sometimes even the gods need a hand, and after 14 bruising years in office, with his own popularity sagging and a united opposition rising fast, Chávez knew that it was time for reinforcements. And in Latin American electoral politics these days, that means bringing in the Brazilians.

These days the Brazilian consultant to beat is Santana. After running winning campaigns at home for Workers' Party (PT) President Luiz Inácio Lula da Silva and his successor, Dilma Rousseff, Santana has gone on to lead dark horses and dullards to power across the Americas, from onetime coup-maker Ollanta Humala in Peru to the wonky economist Danilo Medina in the Dominican Republic. But in Venezuela, he had his work cut out for him. Chávez was convalescing from three straight bouts of surgery for an unspecified cancer after doctors removed a baseball-sized tumor from his pelvis. The ailment kept him shuttling back and forth to Havana for weeks for punishing bouts of radiation therapy that left him bloated and exhausted. His challenger, Henrique Capriles -- smart, youthful, and telegenic -- was running at the head of the first truly unified opposition campaign in recent memory. (It says a lot that Capriles also hired a team of Brazilian consultants.)

Santana went to work with a will. He skillfully airbrushed the Chávez campaign, compensating for the president's visible fatigue and long absences from the public eye with heroic close-ups and slow-motion takes of the candidate hailing imaginary multitudes. Instead of resorting to familiar imagery of the irrepressible showman wading through adoring throngs or thundering from the dais, the campaign spun Chávez as statesmanlike and avuncular, waxing beatific in carefully edited sound bites. "The Heart of My Fatherland," was the official campaign slogan.

All this played well on the airwaves. "The campaign was masterfully orchestrated," admits Diego Arria, an ex-Venezuelan diplomat and former presidential candidate himself. "There were six or seven camera crews following Chávez around and shooting every rally. The Brazilians gave a shot in the arm to Venezuelan politics." In the end, Chávez romped to a 55 to 44 percent victory over Capriles, the incumbent's third-straight election triumph, and one that extended his mandate until 2019.

Santana and his ilk have had plenty of practice. The rise of the Brazilian political consultant is part of the backstory of a remarkable shift in fortunes sweeping Latin America. As electoral democracy has reawakened across the hemisphere, the scramble for votes has grown intense. These days -- in stark contrast to the era when dictatorships reigned -- dozens of political wannabes throughout Central America, the Caribbean, and South America angle for seats, from city hall to the presidential palace. To grab voters' attention, brand a candidate, and sway doubters in an ever more competitive field, professionals and pretenders alike are increasingly turning to hired political advisors from within the region.

Not so long ago, campaign strategizing in Latin America was still the province of an elite group of U.S. super consultants. They parachuted into foreign venues, rewrote the rules of campaigning, and checked out again, collecting fortunes in fees. Bill Clinton's campaign guru Dick Morris coached Felipe Calderón to victory in Mexico, in 2006, and Vicente Fox before him. Morris also advised Argentina's Fernando de la Rúa and Uruguay's Jorge Batlle. The web-savvy Ravi Singh squired Colombia's Juan Manuel Santos to victory in 2010. James Carville, one of the engineers of Clinton's presidential election victory in 1992, was also a frequent flyer to Latin America.

But those days are over. As popular elections spread from Mexico to Chile, the drive-by political snipers were replaced by native experts, who were fluent in the local culture and vernacular. Digging in for weeks or even months, they developed a shoe-leather feel for the territory and issues driving each campaign, and never blinked at the quirks of Latin politicians and powerbrokers. ("I remember one president interrupting a cabinet meeting to take a call from his mother," says Ralph Murphine, an American consultant who has spent his career in Ecuador.)

Nowhere is the change more visible than in Brazil. In Latin America's biggest nation, the political consulting industry grew out of a combination of historical happenstance and social engineering. After a long night of autocratic rule (1964-1985), Brazil gradually thawed to democracy. As the military eased its grip, a generation of appointed mayors and governors was replaced by elected leaders. The process culminated in 1989, when the popular vote for president was finally restored after a 29-year hiatus. Now it's the rare calendar year when there is no election somewhere in this continental country. This fall, more than 15,000 candidates vied for votes in mayoral contests in 5,568 Brazilian cities and towns, each one with a pitch slicker than the next.

With the return to wide-open elections came worries about how to level the playing field. Policymakers wanted to encourage political newcomers and prevent elite contenders with deep pockets from dominating the scene. The solution -- a pearl of populism dating from the early 1960s and resurrected in the 1988 constitution -- was to set aside generous timeslots on the national airwaves for free political advertising. The Free Electoral Hour put campaigning on steroids, driving the country's fractious parties to strike up alliances of convenience to amass TV time.

Thanks to Brazil's wildly popular television novelas, or soap operas, that draw tens of millions of faithful viewers, ad wizards had learned to hawk everything from credit cards to shampoo during station breaks. The Electoral Hour gave them a laboratory to try out their riffs and jingles before nationwide audiences. "From early on, Brazilians learned how to tell a story in 30 seconds," says Chico Mendez, a Brazilian strategist who advised Chávez's rival, Capriles.

Another crucial advantage was that Brazilian strategists had learned to crunch numbers. Thanks to professional census-taking dating back to the 1950s, campaign advisors found a wealth of demographic data that enabled them to target key voters, size up swing states, and hone their pitches. "Pollsters need to have a statistical data base to work out samples, and Brazil has had outstanding surveys since the 1940s and 50s," political scientist Amaury de Souza told me before his death earlier this year. "You need the same techniques to sell products and services used to sell politics, personalities."

Many of the initial campaign programs were laughably forgettable, but Brazilians, consummate couch potatoes, were fascinated to watch democracy bloom in their living rooms. In time, Brazilian consultants got so good at selling politics at home that they began to peddle their services abroad.

One of the first test cases for Brazil's flying consultants was Angola, the former Portuguese colony, which in the early 1990s was emerging from a bloody civil war. In the country's first-ever national multiparty election in 1992, the Marxist president José Eduardo dos Santos faced a formidable challenger in Jonas Savimbi, the charismatic guerrilla leader whose insurgent UNITA party had the blessings of Washington and the apartheid regime in South Africa. Santos knew he needed advice but was loath to ring up marketers from Portugal, Angola's erstwhile colonizer. Instead he looked across the Atlantic to Brazil.

At the time, Brazilians had just elected Fernando Collor de Mello, a fire-breathing young governor from the boonies who was virtually unknown as a national figure until his campaign alchemists recast him as an avenger on a white horse. In the 1989 election, Collor bested a crowded field of alpha politicians, ultimately defeating the already legendary ex-factory worker Lula in a runoff. (Collor was later impeached for corruption, but his rocket rise to power remains a watershed in Brazilian electoral politics.) The makeover was not lost on Francisco Romão, Angola's ambassador to Brazil, who contacted Collor's campaign manager, Claudio Humberto. Humberto introduced him to consulting firm Propeg.

One of the reasons for Propeg's success was Ricardo Noblat, a career journalist who had been sacked by his newspaper but soon found other ways to put his intimate knowledge of the electoral system to use. By 1992, Noblat was on a plane to Luanda to join Propeg's team in the mission to retool Santos's struggling campaign. He ran a team of nearly a hundred advisers, led by a cadre of eight Brazilian campaigners whose numbers grew to 44 before the race was over. The imported marketers started from scratch.

"The communist government was trailing in nearly every region of the country," says Noblat. So they slicked up Santos's pitch, softening the hard-knuckle Marxist's image. Taking a cue from former São Paulo mayor Paulo Maluf, they ginned up a fence-mending slogan, "Peace and Order," that went over well in a country still torn from its long civil war. Angolans loved television and were huge fans of imported Brazilian soaps, but were bored by politics as usual, with its cookie-cutter campaign ads and plodding Portuguese-style TV editing. So Noblat's team juiced up the media campaign, cutting up-tempo takes of Santos on the move and toggling to slow-mo shots of adoring crowds, all set to lushly scored sound tracks for the nationwide state broadcast network.

On the hush, he hired a Brazilian folk guitar duo, Sá e Guaiabira, to write a soft-touch campaign theme song, Angola in My Heart. "We had to invent a story that these were Angolan musicians," says Noblat. The jingle caught on and became kind of a popular anthem in the vein of the 1985 charity anthem We Are the World (minus Michael Jackson and Dionne Warwick). "It was a kind of musical exaltation of Angola," says Noblat. "To this day, Angolans sing it on patriotic occasions."

Luck also helped. Noblat's crew stumbled upon a political marketing plan that an unwitting Savimbi staffer had left behind in a restaurant. It also didn't hurt that in the middle of the campaign Pope John Paul II touched down in Luanda to a red carpet welcome by the communist head of state who promptly squired the pontiff around the country. Santos surged in the polls and won the first round of voting, but fell a few thousand votes shy of the absolute majority of ballots needed to win outright. A runoff was called, and Santos's popularity soared. But when violence swept the country, Savimbi quit the race and took refuge in the jungle, where he turned up dead a few years later. Santos won the election by default and has remained in power ever since, though not always democratically. He was last re-elected in September -- with the help of João Santana.

Few Brazilians can boast Santana's political scorecard. Affable and quietly intellectual, Santana is surprisingly publicity-averse for the heat-seeking métier of professional politics. (He did not return this reporter's many phone calls.) He also has become arguably Latin America's most formidable kingmaker. A onetime political reporter, he learned his chops on the campaign trail as Brazil's reset from dictatorship to popular democracy, then parlayed his story telling skills into a communications consultancy. With a languid twang typical of his native state of Bahia, in northeast Brazil, he earned his name grooming candidates in some of the toughest electoral contests in Brazil and abroad.

In 2006, President Lula saw his prospects for re-election sinking as some of his top advisors were fingered in a massive vote-buying scandal known as the mensalão, for "big monthly payoff." (The Brazilian Supreme Court has just found 25 people guilty for corruption in the payola case, including Lula's closest confidants.) He turned to Santana, who promptly flipped the narrative, recasting Lula in polished campaign spots as a radiant everyman, worshipped by the meek and maligned by envious rivals. "Let the man work!" was the campaign money note. Lula roared back, winning handily in the runoff vote.

After crowning Lula, Santana went on to craft the winning campaign for the workingman hero's successor, Dilma Rousseff, Lula's former chief of staff and a consummate bureaucrat who had never run for office. Santana put her in designer suits, powered up her coiffure, had her teeth straightened, and flattened her brow with Botox. Most importantly, he sent her to mingle with the povão, the common folk, turning the stiff contender that critics dismissed as a walking spreadsheet into a winning candidate.

Today, Santana is to the resurgent Latin American left what Carville and George W. Bush confidant Karl Rove were for Democratic and Republican hopefuls in the 1990s, with less lip and slightly lower consulting fees. Though he has worked all shades of the political spectrum, Santana has excelled at electing little-known socialists. In 2009, he led former leftist guerrilla fighter Maurício Funes to victory in El Salvador. Last year, he "Lulafied" Peruvian firebrand Ollanta Humala, turning the onetime coup-maker into a solid centrist in sober blue suits, winning over conservatives and middle-class Peruvians after a hotly contested runoff vote. And last month, he split his team between continents, deploying one platoon to Santos' campaign in Angola and another to the Caribbean, coaching economist Danilo Medina to office in the Dominican Republic.

On Oct. 28, Santana added yet another push pin to his political map when a little-known client, Fernando Haddad, a former education minister so lackluster his rivals derided him as a "light pole," came from behind to become mayor of São Paulo, trouncing seasoned former governor José Serra in the runoff. (Haddad is shown in the photo above at bottom right, hugging Rousseff during the race last month.) The pundits were quick to credit the win to Lula, who had squired the neophyte Haddad into politics just as he had groomed his successor, Rousseff. "From pole to pole, we are lighting up Brazil," Lula quipped. What he neglected to mention was the quiet figure behind it all, throwing the switches.



The Austrian Miracle

What's the secret of Austria's singular success, while the rest of Europe's economies founder?

VIENNA — Walking through the beautiful and bustling streets of central Vienna, one finds it hard to imagine that elsewhere in Europe thousands of demonstrators are taking to other streets to protest crippling unemployment and the imposition of punishing austerity measures. This is particularly true in Greece and Spain, where one in four people is out of a job, and one in two of those under 25. For the European Union's 27 countries, the unemployment rate is now 10.6 percent -- and it's even higher for the eurozone countries, at 11.6 percent. Worse, the trend is negative: Both rates have "risen significantly" according to Eurostat, from 9.8 percent and 10.3 percent, respectively, the previous year. 

In Austria, however, the rate is just 4.4 percent, up slightly from a year ago but persistently the EU's lowest unemployment level. This is also a country whose tourism industry seems recession-proof and whose capital city of Vienna is repeatedly ranked No. 1 on Mercer's Quality of Living index. It's an enviable record, to be sure, and one that seems counterintuitive in the context of a slumping global economy, regionwide pressures, and a common currency on the verge of collapse.

What is Austria's secret?

The answer lies in a system of economic and employment policies built on a central commitment to social market economics, where individual and corporate prosperity depend on general prosperity in a tapestry of interdependent interests. These assumptions are played out, at least in part, through a "social partnership" system of representatives from labor, industry, government, and often academia, in which job security, wages, pensions, unemployment insurance, and other workplace standards, as well as related legal and policy questions, are discussed and negotiated, leading to recommendations to Parliament and the respective ministries.

At the same time, Austria has a productive and highly competitive manufacturing sector, which accounts for the country's favorable trade balance. In a country with generally good secondary schools and effectively free higher education, the economy enjoys a well-educated workforce and stable relations between management and labor within the social-partnership system that allow for long-term planning. Austria also has an excellent medical system, ranked among the world's best, and a varied and flexible national health-care system supported by all participants.

Austria is a wealthy country, both publicly and privately, with comfortable levels of household income (31,125 euros median) and a sustained and relatively high level of private savings, with private wealth nearly six times higher than public debt. Although the distribution of income and wealth is increasingly uneven by Austrian standards, it is still relatively narrow, and the high levels of private wealth lubricate the pipelines of both private and public investing.

Austrians are also big savers, stashing away things like commemorative gold coins from the Austrian Mint. And though individuals and households are saving somewhat less than before (7.5 percent of annual income in 2011, compared with 8.3 percent in 2010), it doesn't appear to be affecting consumption. Statistics Austria reports that household disposable income increased 2.6 percent for the same period, and household consumption, up 3.5 percent, by even more.

The single most important factor here is the role of a generous welfare state, which "steadies consumption" during recessions, said economists Markus Marterbauer and Sepp Zuckerstätter of the Austrian Chamber of Labor. "Confident that their basic needs are covered, Austrians use their savings to continue spending," said Marterbauer and Zuckerstätter in a 2011 interview with the Vienna Review. "Constant consumer demand and reduced savings in downturns, and increased savings in boom years, are characteristic of the Austrian economy. Both help keep output and employment levels up."

A commitment to job creation and to support of the working class has a long history in Austria. Originating in the First Republic after World War I, it was a pillar of the socialist-led "Red" Vienna of 1919 to 1934, when social services, housing, and jobs dominated the public agenda. Jobs were provided through extensive construction and public works projects, as well as through the staffing of kindergartens, after-school care, and youth clubs, along with public recreation, spa holidays, and free health care -- all financed by a range of taxes on luxuries. Rents in the extensive, new public housing were kept low -- at 4 percent of household income, and even that could be postponed in case of illness or unemployment. What people earned, they kept.

Ironically, full employment was also a central feature of National Socialism, and by the Anschluss in 1938, there were jobs going begging in Germany -- less surprising when you remember that Jews and women were increasingly forced out -- making the Austrian labor force an important resource to the Third Reich. During the recovery years following World War II, Austria channeled Marshall Plan money largely into the monopolistic public sector and state-owned industries, which along with government became the bedrock of public employment.

But it was during the reform years of the great Chancellor Bruno Kreisky (1970-1983) that a great many of the laws and policies that have come to characterize modern Austria were laid down. For Kreisky, committed to reforging a sense of social solidarity in a country still in denial from the disaster of National Socialism, economic policy was subservient to economic needs, and he consistently pushed to ensure full employment: "Hundreds of thousands unemployed matter more than a few billion schillings of debt," Kreisky said on more than one occasion.

Public spending and investment in a range of industrial projects were thus made high priority during his administration. And because 50 percent of Austrian industry remained in state hands, nearly all people in Austria had the chance to complete their education and expect to find a well-paid, stable job -- with a good pension at the end. In addition, the provision of free public education, recreation and sports facilities, subsidized rents, public transit, and national health care meant that modest salaries went a long way, allowing Austrian industry to stay competitive while providing guaranteed jobs.

Since the beginning of the 2008 financial crisis, Austria has controlled unemployment through a series of initiatives -- including shortened working hours, enhanced education and job training, income tax cuts, and reduced public transit costs -- that have combined to preserve jobs, develop skills, and free up consumer spending. In addition, according to Franz Nauschnigg, head of the European Affairs and International Financial Organizations Division of the Austrian National Bank (ÖNB), Austria's low budget deficit going into the crisis made possible a series of direct countercyclical measures, including large infrastructure projects like Vienna's new Central Railway Station, cash handouts to people trading in old cars, and a 100 billion euro loan package to Austrian banks to increase their capital base and enable them to resume lending.

In the early years of the crisis, there was also a lot of hand-wringing among rating agencies and other international analysts about Austrian banks' substantial vulnerability to the teetering markets in Central and South Eastern Europe (CESEE). That these fears were never realized was due to what was dubbed the "Vienna Initiative," described by the ÖNB's Nauschnigg as in intervention by which "a group of Western and Eastern European banking supervisors, joined by the IMF and the European Bank for Reconstruction and Development, successfully lobbied the private sector to maintain its exposure in CESEE countries, preventing the panic-selling of bonds and currencies that would have driven up interest rates and made a default more likely." It was a model of international cooperation that could well serve as a paradigm solution for the larger problems that face the EU today.

At the peak of the crisis in 2009, some 66,000 workers were shifted to shortened working hours in Austria, particularly within the auto industry and its suppliers, according to Johannes Kopf, head of the Austrian Employment Service (Arbeitsmarktservice, or AMS), in a recent interview with the Austrian daily Der Standard. This number is now less than 2,000; however, he sees this as "a short-term bridge for a very deep crisis, not something we can use for years to bridge a gap," when it becomes "too expensive for the companies." After that, other solutions need to be found.

Austria has also invested heavily in job training both for the unemployed and for youth entering the job market. With a budget of some 1 billion euros (a budget Kopf readily admits is "enviable"), the AMS is able to offer individual counseling and monitoring on a weekly basis for job seekers as well as usually two extended training courses in appropriate skill areas, including technology and languages, to improve job prospects. So though the unemployment rate overall is up slightly from last year (from 4 percent to 4.4 percent), there are also 45,000 more people working, meaning more people have entered the workforce, which is generally seen as a sign of confidence in the economy.

And perhaps most dramatic is the AMS guarantee of a guaranteed paid training internship (Lehrstelle) for all youth. Thus any young person who doesn't find an internship on his or her own or through the AMS is able to do the equivalent training. "We invest massive support into these education and training issues," says Kopf. "We have managed it, that after a year, half of these young people have already switched to the private sector where they can do a second training year." Expensive, he says, but worth it. And similar support is available for the long-term unemployed.

"I prefer to have four people who have been unemployed for three months each, than one person for a year," Kopf says.

Back on the streets of Vienna, people are still sitting outside where the sun takes the edge off the autumn chill, meeting and talking together. On a late-October Friday afternoon, in fact, the Kaffeehäuser were already filling up; people had switched from coffee to wine, and conversation was lively.

"Doesn't anyone do any work in this town?" an American friend asked, eying the scene with amazement and envy. "Don't be fooled," I smiled. Along with their unabashed love of leisure, Austrians are paying very close attention to business. Because that's what it takes to make it turn out like this -- for themselves, and for everybody else. Which to an Austrian, is how it should be.

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