Brazil Protesters Block Roads, Airport as Bolsonaro Stays Silent

(Bloomberg) -- Protests by backers of Jair Bolsonaro, led by truck drivers, have spread across the country as the Brazilian president remains silent over his loss in Sunday’s election, so far refusing to concede defeat to his foe Luiz Inacio Lula da Silva.

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Supporters of the firebrand president, unhappy with the election result, blocked more than 200 roads across more than a dozen states and the capital and restricted access to Sao Paulo international airport, forcing the cancellation of 25 flights. The protests prompted Supreme Court Justice Alexandre de Moraes to order the federal highway police to clear the blockades, warning of fines reaching 100,000 reais ($19,306) per hour per vehicle.

Bolsonaro has refused to make any public comments after losing the presidential runoff to Lula by less than 2 percentage points, the narrowest margin for a presidential election in the country’s modern history. Pressure from some allies is building for him to say something to de-escalate the rising tension. His Communications Minister Fabio Faria said late Monday that he will speak today.

Bolsonaro is meeting with heads of the Navy and Air Force at the presidential palace in Brasilia Tuesday morning, in addition to the ministers of defense, justice and public security. Bolsonaro’s Chief of Staff, Ciro Nogueira, and running mate in the election, General Walter Braga Netto, are also attending.

“Bolsonaro is too isolated to successfully challenge the results,” said Mario Braga, an analyst with Control Risks in Sao Paulo. While demonstrations by truck drivers and supporters allow him to create a narrative that he has broad backing, “the conditions for him to stay in power simply aren’t there.”

In addition to highways, the port of Paranagua in Parana state was blocked by protesters, according to a statement, while the head of the Brazilian supermarkets association said that some shortages have already begun to be reported by members.

Braga said it’s important to watch how quickly the federal highway police moves to clear roads as its director is an ally of the president. Since Monday evening, the number of blockades has fallen.

The uncertainty could put a dent in the rally seen in Brazilian assets following the vote. The real pared early gains to trade 0.1% stronger on Tuesday while stocks climbed 0.2%.

“Markets are on edge waiting for Bolsonaro to address the outcome of the election,” said Brendan McKenna, a strategist at Wells Fargo in New York. “My base case scenario is an orderly transition of power, but if Bolsonaro opts for a hostile challenge of the election markets will certainly react negatively.”

Lula, who is focused on organizing the transition team ahead of taking over on Jan. 1, hasn’t commented on the protests. Gleisi Hoffmann, the head of his Workers’ Party, said on Monday the strikes are political and up to Bolsonaro to resolve, according to newspaper O Estado de S. Paulo.

Read More: Lula Edges Out Bolsonaro to Win Presidency of Divided Brazil

The federation of truckers, which represents the main transportation companies in the South American nation, disavowed the protests. But it’s unclear the sway it has over individual truckers.

Truck drivers are one of the main bases of Bolsonaro’s support and yield significant political power in the geographically vast country. They organize mostly in grassroots groups, with no clear leadership, which makes negotiations particularly tricky. Back in 2018, a strike over diesel prices lasted for about 10 days and caused major economic harm to the country.

The president’s oldest son, Senator Flavio Bolsonaro, appeared to accept the election result in a Twitter post on Monday when he thanked his father’s supporters and said they wouldn’t give up on Brazil.

The president’s decision to not immediately concede isn’t a complete surprise given his long history of attacks against Brazil’s electoral system. But a prolonged dispute could test the country’s institutional strength.

The heads of the country’s senate and lower house quickly accepted the outcome on Sunday night along with the supreme court justices and some of Bolsonaro’s closest allies. US President Joe Biden also congratulated Lula in a phone call on Monday. The Armed Forces have yet to comment.

Read More: Biden Congratulates Lula in Call as Bolsonaro Remains Silent

Rodrigo Garcia, the outgoing governor of Sao Paulo state who supported Bolsonaro in the runoff, said he recognizes Lula’s victory and “we’re all waiting for the president” to do the same.

The president’s silence could hurt the transition process. By law, Brazil’s government needs to organize a formal handover process right after the vote, with the president-elect allowed to nominate 50 people to meet officials and exchange government information. The outgoing administration typically coordinates with the team of the next president during the following two months so there is a smooth transition.

While a strategy to try to discredit the election “is unlikely to yield a favorable result for Bolsonaro, that can be a tactic to keep his base mobilized to oppose a Lula administration,” Eurasia Group analysts wrote in a report.

“We are watching the truckers road blockades across the country and their potential to spread, remain persistent and become very disruptive,” said Valerie Ho, a portfolio manager at DoubleLine Group LP in Los Angeles. “Financial markets are cautious of the tail risk for a prolonged disruption.”

--With assistance from Eslen Brito, Dayanne Sousa, Maria Elena Vizcaino, Carolina Wilson and Guilherme Bento.

(Updates with analyst quote in fifth paragraph.)

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