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 Neves, a former two-term state governor and senator who had been
widely written off until the last few days of the campaign, rode a
late surge in support to second place with 33.6 percent support in
Sunday's first round of voting.
He will face Rousseff, who won 41.6 percent support, in the runoff
on Oct. 26.
Rousseff remains a slight favorite due to her enduring support among
the poor, but Neves is within striking distance.
Both will now focus on the 21 percent of voters who backed the other
main candidate, environmentalist Marina Silva. Her campaign
collapsed in spectacular fashion late in the race, but she remains
admired by many voters and she could still swing the election with
an endorsement.
The runoff will be a battle between opposing visions for development
in Brazil: the state-led capitalism of the ruling Workers' Party as
it struggles to revive an economy that fell into recession in the
first half of the year, and the market-friendly policies promised by
Neves and his centrist Brazilian Social Democracy Party, or PSDB.
The two parties have dominated politics since Brazil returned to
democracy three decades ago and their electoral battles highlight
class divisions in a country with one of the world's biggest gaps
between rich and poor.
Rousseff came out ahead in the first round of voting thanks to
working-class supporters who are still grateful to her party for
economic gains and for popular social welfare programs it expanded
upon coming to power 12 years ago.
Recent polls have given Rousseff an edge of as much as eight
percentage points over Neves in a runoff, although Neves will have
momentum after his unexpected comeback on Sunday.
"Brazil cannot go backwards," Rousseff said as she celebrated her
first-place finish. "I clearly understood the message from the
streets and from the ballot boxes. The majority of Brazilians want
us to speed up the Brazil we are building."
Senior PSDB officials expect to meet with leaders of Silva's
campaign on Monday to try to secure a formal endorsement from her, a
party source told Reuters. The two camps shared broadly similar
market-friendly platforms and Silva's campaign chief, Walter
Feldman, is a former PSDB leader with enduring strong ties to the
party.
Another Silva aide who wields huge influence with her, Eduardo
Giannetti, told reporters on Sunday night he would support Neves.
"I don't think it would be good for Brazil to have four more years
of (Rousseff)," Giannetti said, according to the website for Veja
magazine. "Now we have to reestablish confidence. Our best chance
for that is with (Neves)."
Silva did not endorse any candidates when she placed third in 2010's
presidential race, and could remain neutral again. She has expressed
frustration with both Rousseff and Neves for a wave of negative TV
ads and other attacks that caused her support to fall during the
campaign's final days.
STRUGGLE FOR NEUTRAL VOTERS
Some of Silva's voters are too leftist to support the PSDB, which
privatized state companies and cut budget spending when it last ran
Brazil from 1995 to 2002.
However, in a possible hopeful sign for Neves, in Silva's concession
speech on Sunday she cast both their camps as frustrated with nearly
four years of slow growth, as well as poor healthcare and other
public services.
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"There is no way to misinterpret the sentiment of voters, of the 60
percent who moved for change," she said. The expectation of a
Rousseff victory had in recent days battered Brazil's stock market
<.BVSP> and driven the real currency <BRL=> to a five-year low.
But, heartened by Neves' showing, some investors said they expected
a sharp rally on Monday.
"The expectation now is that we're going to have a highly
competitive second round of elections," said Mauro Schneider, chief
economist at CGD Securities in Sao Paulo. "Markets are poised to
have a strong positive reaction."
Neves, having clawed back from a distant third place in polls
earlier in the campaign, enjoys newfound vigor.
"He is now a difficult adversary," said Andre Cesar, a political
analyst in Brasilia. "He gained force and drive when he got back in
the race."
To win, Neves will have to convince voters that his promise to
jumpstart the economy won't come at the expense of social programs,
especially a popular monthly stipend that low-income families
receive in exchange for keeping their children in school.
Neves, 54, has vowed to keep the programs, which have become a
symbol of Workers' Party rule even though they were first
implemented by the PSDB.
Late on Sunday, he promised "the best project for Brazil" and said
he represents "Brazilians who want the country growing again,
generating jobs and improving the lives of people."
Workers' Party voters are betting that Rousseff, 66, can weather the
economic slowdown and ensure continued progress for blue-collar
Brazilians.
Despite falling investment, weak consumer confidence and a loss of
competitiveness by Brazilian manufacturers, Rousseff and her
supporters blame the economic woes on international instability, not
her policies. Unemployment has remained near historic lows, and
wages have been steady.
(Additional reporting by Guillermo Parra-Bernal, Walter Brandimarte
and Patricia Duarte; Editing by Todd Benson and Kieran Murray)
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