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Brazil’s New President Wins Amid Fears She Could Overextend State’s Role

President Dilma Rousseff Dilma Vana Rousseff, Brazilian president Luiz Inácio Lula da Silva’s handpicked candidate to succeed him, won Brazil’s Sunday runoff election becoming the first woman president to lead Brazil, Latin America’s largest economy.

Rousseff promised to stick to policies that have lifted millions from poverty and made Brazil one of the world’s hottest economies.
 
Rousseff had 56.05% of valid votes compared to 43.95% for opposition candidate José Serra, with 99.99% of votes tallied, early Monday, according to Brazil’s election authority.

An economist and former energy minister who leans left but has become more pragmatic over time, Rousseff had never run for elected office. Yet she received decisive support from Brazil’s wildly popular President Lula, who plucked her from relative obscurity to succeed him.

During Lula’s eight years in office, his stable fiscal policies and social programs helped lift 20 million Brazilians, or more than 10% of the population, out of poverty and another 25 million to join the ranks of lower middle class.

The burgeoning middle class is snapping up cars and building houses at a pace never seen in Brazil before, helping make it a rare bright spot in the global economy along with other developing giants such as China and India.

That legacy was simply too much for the former governor of São Paulo to overcome. Serra mustered just enough support in the first round of voting on Oct. 3 to force a runoff, and briefly closed in on Rousseff in subsequent polls.

However with Lula in full command of her campaign, the debate in the final two weeks shifted away from her views on social issues such as abortion and back to her mentor’s economic record.

Rousseff who as a student was involved in guerrilla activities, vows to build on Lula’s successes by upgrading Brazil’s roads system, schools and other infrastructure as the country prepares to host the 2014 World Cup and 2016 Olympic Games.

She also seeks to exploit the country’s newfound offshore oil wealth and expand the state’s role in the energy sector while continuing to court private investment.

“Her government will focus primarily on solving Brazil’s bottlenecks,” Fernando Pimentel, a close adviser to her campaign, said in a recent interview.

Rousseff lacks Lula’s charisma, and she has shown limited interest in passing major economic reforms, such as an overhaul of Brazil’s onerous tax code, that many investors say are necessary to reduce the high cost of doing business.

Some investors also fear she could expand the state’s role too much in some areas while failing to rein in heavy budget spending, which has pressured Brazil’s real and helped make it the world’s most overvalued currency by some measures.

Still, Brazil’s stock market, bonds and currency all posted gains in the run-up to the vote, a stark contrast to the financial panic that preceded the 2002 election of Lula, a former radical union leader.

Lula steps down January first with a support in the eighties, making him the most popular leader in Brazil in six decades.

The daughter of a well-to-do Bulgarian immigrant family and a teacher, Rousseff joined a leftist guerrilla group during the 1960s and resisted the military dictatorship of that era. She was then jailed for three years. Upon her release from prison in 1973, she moderated her views and studied economics.

Dilma Rousseff ascended through a range of mid-level government posts in southern Brazil and never showed much political ambition until Lula made her his energy minister, his chief of staff, and then his chosen successor.

Lula has acknowledged Rousseff lacks political experience but chose her because of her skill as a technocrat and administrator. He says those qualities will be critical over the next four years as Brazil tries to bring its infrastructure in line with its ambitions as an emerging world power.

Rousseff survived a bout of moderate cancer last year. More recently, she overcame a last-minute corruption scandal that forced a former top aide to resign. In coming days, Rousseff will be under scrutiny to see whether she makes difficult economic reforms a priority, and whether she fills top cabinet posts with members of the market-friendly wing of her Workers’ Party.

Rousseff’s ruling coalition will enjoy a wide majority in Congress that, in theory, should even give her the 60% of votes necessary to pass constitutional amendments. In practice, though, the fractious nature of Brazilian politics – there are 10 parties in her coalition – will challenge Rousseff’s relatively unproven skills as a dealmaker.

She will also face an emboldened opposition PSDB party, which despite Serra’s apparent defeat is already vowing to be tougher on her than they were on Lula.

“We cannot let the executive (branch) impose everything, as if this were a monarchy,” said Aécio Neves, a senator-elect from Minas Gerais and the likely new leader of the opposition.

Mercopress

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