A campaign banner for presidential candidate Aecio Neves hangs over a plaza in Belo Horizonte
By Brian Winter
BELO HORIZONTE Brazil (Reuters) - The two candidates in Brazil's presidential election runoff on Sunday grew up just seven blocks apart, attending the same elite tennis club, watching movies at the same theater and strolling through the same leafy plazas during the 1960s.
They cheered for rival soccer teams, though, and eventually went down very different political paths. Dilma Rousseff joined a Marxist group that opposed that era's military dictatorship, while Aecio Neves embraced the more conservative ethos of his grandfather, a legend in Brazilian politics.
Today, President Rousseff and Senator Neves are fighting for votes in their hometown of Belo Horizonte - a critical battleground in a race that has gone down to the wire.
The city of some 5 million people is a vibrant mining and agribusiness center and the capital of Minas Gerais state, which is sometimes called "Brazil's Ohio" because of its bellwether status in elections. Since full democracy returned in 1989, every victorious presidential candidate has won Minas Gerais.
Here, as elsewhere in Brazil, sharp declines in poverty and unemployment over the past decade have made Rousseff, who at 66 is a more moderate leftist than in her younger days, a slight favorite to win a second term.
Neves, a 54-year-old who used to be Minas Gerais' governor, is hoping that discontent over a stagnant economy and support for his more pro-business policies will help him close a gap of about 4 percentage points in recent polls.
Brazil's financial markets have plunged this week on concerns that another four years of Rousseff's policies would prevent a return to the boom years of the late 2000s.
The closest election race in decades has extra drama in Belo Horizonte because so many people here know the candidates - and remain mystified, all these years later, as to how two people from similar backgrounds could pursue such divergent agendas.
"It's all anybody here wants to talk about," laughed Helvécio Ratton, 65, a filmmaker who has been friends with Rousseff since her university days.
Ratton said he and Rousseff were drawn to the leftist resistance because of Brazil's stark inequality, which was even worse back then. During the 1960s, tens of thousands of rural, often diseased and illiterate poor were migrating to Belo Horizonte every year, many sleeping on the city's streets.
He described Rousseff as a bookish teenager who was "very funny, always joking around."
That description is at total odds with her image today as a stern, humorless leader, Ratton acknowledged. He said she changed after being jailed and tortured by the military in the early 1970s. A career in the "masculine" world of Brazilian politics may have also led her to act tough, he said.
"In private," he said, "you can still see the old Dilma."
Rousseff's father was a Bulgarian aristocrat who emigrated to Brazil during World War Two, and paid for his kids to take French classes and attend the city's top schools - including, coincidentally, one where Neves will cast his ballot on Sunday.
The Rousseff family still owns the large purple house where she grew up, which is now a venue for wedding receptions and other special events. The building's supervisor, who gave her name as Thays, said she never has contact with the president, dealing with an accountant instead.
"If she loses," Thays said with a wry smile, "we expect the rent to go up."
Twelve years younger than Rousseff and born in 1960, Neves missed out on that decade's tumult. Instead, he assiduously followed the path of his grandfather, Tancredo Neves, who preceded him as both a congressman and governor of Minas Gerais.
The older Neves was renowned as a genteel consensus-builder who could oppose the military without scaring it. When generals agreed to a managed transition back to democracy in the 1980s, they insisted on Neves becoming the first civilian president, although he died of an infection at 75 before taking office.
Aecio Neves mimicked Tancredo's impeccable manners and cheery disposition even as a kid, said Celina Ramos, who met him at age 8 at the city's Cruzeiro soccer club.
"He was a good boy then, and he's a good boy now," she said.
Such questions of personality and background matter more to Minas Gerais' 15 million voters than they do in some other regions of Brazil, said Paulo Paiva, a local economist.
In Sao Paulo, for example, the struggles of finance and manufacturing, the city's two main livelihoods, have turned most voters against Rousseff. Economic growth has averaged less than 2 percent since she took office in 2011 - less than half the pace seen last decade.
But Minas Gerais is more dependent on agriculture and consumer spending, which have both held up fairly well. Unemployment here remains slightly below the national average of 5 percent, which is itself near an all-time low.
"That leaves voters free to consider questions besides gross domestic product, such as who they like more," Paiva said.
'A FAMILY AFFAIR'
Indeed, the campaign here seems to be about two main issues - which candidate has the better life story, and who deserves more credit for the social programs that helped reduce Brazil's notorious inequality over the past decade.
Rousseff's team has flooded radio and TV with statistics showing how the federal government has helped Minas Gerais under her rule: 1.1 million of the state's families receiving monthly welfare payments, 146,151 students enrolled in a government-run vocational education program, and so on.
Neves' supporters have, in turn, touted programs that he rolled out as governor from 2003 to 2010, such as one that installs bathrooms and kitchens in poor people's houses.
"Everyone has been very good to me," said Maria dos Anjos Souza, an unemployed 41-year-old, as carpenters contracted by the state installed a new tile floor in her kitchen last week. She said she hadn't decided who she was voting for yet.
Meanwhile, Rousseff's campaign has touted her militant past, using the mug shot from her 1970 arrest in TV ads and on T-shirts to present her as a resolute champion of the poor.
"Dilma, brave heart ... you never looked away from the people's suffering," one jingle goes.
Neves has pushed back against Rousseff's charges that his family ties make him an elitist. Instead, he argues that working by his grandfather's side in his 20s helped make him the candidate of "safe change," with the political support and know-how necessary to revive the economy.
The effect of all this in Minas Gerais is unclear.
More voters backed Rousseff in the first round than Neves, although the presence of a third candidate split the opposition.
A poll last week showed Neves with a 12 percentage point lead in the state - although Paiva, the economist, cautioned against reading too much into that, noting that "mineiros," as state residents are called, are guarded in matters of politics and religion and "notorious" for lying to pollsters.
In the Belo Horizonte plaza where the Neves family house used to stand, a crowd of about two dozen gathered at a bar last week to watch the two candidates debate.
Some yelled at the TV or each other, but most drank their beer quietly and listened.
"We have to keep calm," said Nilton Leme, 43, who works for a mining company. "For us, this is a family affair."
(Editing by Todd Benson and Kieran Murray)