In addition, the government has expanded the Bolsa Familia program, which provides small cash grants to poor families, with school attendance and health immunizations required. The program has been successful in reducing illiteracy, and now reaches about 13 million families. More than 19 million people have been brought across the poverty line since 2003. And a new program of subsidies to home ownership has benefited hundreds of thousands of families, with millions likely to take part as it expands.

Although Republican Party campaign strategy has been effective for most of the last four decades in the United States, it hasn't performed well as an export. The Brazilian electorate tired quickly of the mud-slinging, and swing voters wanted to know what Serra would do for them. When he couldn't tell them, he lost their votes.

On the down side, the mudslinging and "Republican strategy" prevented the campaign from addressing some of the vital issues of Brazil's future. Brazil's financial elite, which dominates the central bank, has an influence on economic policy that is at least as bad as that of Wall Street in the United States. This is one reason why Brazil, even under Lula, has had for many years the highest or near-highest real interest rates in the world. Brazil's growth performance has still not been on a par with the other BRIC countries (Russia, India, China), and the country will have to move away from some of the neoliberal policies of previous governments in order to achieve its potential.

Capital formation during the Lula years was not much different from during the Cardoso years, and was relatively low compared to many developing countries. Public investment was even lower, although it has recently begun to accelerate. The country will need a development strategy, and one that establishes new patterns of investment and consumption that advance the interests of the majority of Brazilians – some 50 million of whom remain in poverty.

The election has enormous implications for the Western Hemisphere, where the Obama State Department has continued with barely a stutter the Bush administration's strategy of "rollback" against the unprecedented independence that the left governments of South America have won over the last decade. A defeat of the Workers' Party would have been a big victory for them.

It also has implications for the rest of the world. In May, Brazil and Turkey broke new ground in the world of international diplomacy, by negotiating a nuclear fuel swap arrangement for Iran, in an attempt to resolve the standoff over Iran's nuclear program. The State Department was probably more upset about this than anything that Brazil had done in the region, including Lula's strong and consistent support for the Chavéz government in Venezuela. Serra had also attacked the Iran deal during his campaign.

Outside of Washington, the results of this election will be greeted as good news.

This column was published by The Guardian Unlimited (UK) on November 1, 2010.