(Reuters) - Despite opposition from nearly half of Brazil's voters, leftist President Dilma Rousseff won re-election on Sunday and will have another four years to try to revive growth in a once-booming economy gone stagnant.
Rousseff, who was a Marxist guerrilla in her youth, overcame growing
dissatisfaction with the economy, poor public services and corruption to
narrowly clinch a second term for herself and the fourth in a row for
her Workers' Party.
a bitter, unpredictable campaign that pitted poorer Brazilians grateful
for government anti-poverty programs against those exasperated with a
stalled economy, Rousseff must now seek to continue flagship social
services even as she tweaks economic policies to restore growth.
to a relieved crowd of supporters on Sunday night in Brasilia, the
capital, Rousseff acknowledged the close race and the call for change
expressed by many voters.
know that I am being sent back to the presidency to make the big
changes that Brazilian society demands," she said after winning the
runoff election with 51.6 percent support.
slim, three-point margin over centrist candidate Aecio Neves came
largely thanks to gains against inequality and poverty since the
Workers' Party first came to power in 2003.
the fruits of a commodity-fueled economic boom in the last decade,
Brazil's government expanded welfare programs that helped lift more than
40 million people from poverty despite the current economic woes.
"Brazilian model" has been adopted by center-left parties across Latin
America and Rousseff's victory, however narrow, is a blow for
conservatives in the region.
also means there will be no dramatic improvement in ties with the
United States, hit in recent years by trade disputes and U.S. government
spying programs that infuriated Rousseff.
40 percent of Brazil's 200 million people live in households earning
less than $700 a month, and it was their overwhelming support that gave
Rousseff victory on Sunday.
she pledges to deepen social benefits while working to revive an
economy that fell into recession in the first half of this year.
has already promised to replace her finance minister, part of a pledge
to rethink economic policies that she has so far been known to all but
tight result reduces her capacity to radicalize policies," said Alberto
Bernal, a Miami-based economist with Bulltick Capital Markets. "Pretty
much half of the country is against what she has been doing."
unhappy are investors with Rousseff that Brazil's stock market and its
currency both slumped in recent weeks whenever opinion polls showed her
gaining ground in the race. They could take another hit on Monday.
Rousseff and aides consistently shrug off market pessimism as little
more than tantrums by speculators. As her camp celebrated victory late
on Sunday, longtime foreign policy advisor Marco Aurelio Garcia told
reporters that investors should relax and "take tranquilizers."
victory came just a year after massive street protests swept Brazil
because many advances of the past decade had stalled.
slowing economy, rising prices and anger over a lack of investment in
public services prompted many to ask whether the Workers' Party had
exhausted its ability to improve the lives of people in a country still
plagued by vast gaps between rich and poor.
FEAR OF THE UNKNOWN
Neves, a senator and former state governor who enjoys support among the
upper-middle and wealthy classes, failed to convince a majority of
Brazilians that he had enough new ideas to pull Rousseff from power.
didn't help that many poor Brazilians associate his centrist Brazilian
Social Democracy Party with a less inclusive past, a perception that the
Rousseff camp deftly exploited.
if things are getting worse, many voters prefer to stick with what they
know than take a risk on the unknown," said Fernando Abrucio, a
political science professor at the Getulio Vargas Foundation, a business
school in Sao Paulo.
second Rousseff term will not be easy, especially as a slowing economy
strains a government model accustomed to high tax revenues to finance
social programs and subsidized credit for companies and consumers.
economy, after growing by as much as 7.5 percent the year before she
took office, is on track to grow less than 1 percent this year. Prior
efforts to gun growth, largely through tax breaks and other subsidies
for select industries, have largely fallen flat.
inflation, long a problem in a country with a history of runaway price
increases, is now hovering above the government's tolerance ceiling of
unemployment is near record lows, economists don't expect it to remain
so for long as plunging investment, slower growth and further
uncertainty prompt employers to cut back.
correct the course, economists say Rousseff must pursue long-pending
tax and labor reforms in order to increase productivity and engage
further with the global marketplace.
improving efficiency and making Brazil a more productive part of the
global economy, the country will just keep muddling along," said Marcio
Garcia, an economist at the Pontifical Catholic University in Rio de
also face gridlock in a Congress increasingly weary of the ruling party
and continued uproar over a snowballing corruption scandal at the
state-run oil company known as Petrobras (PETR4.SA).
media in recent weeks have been abuzz with leaked testimony by a former
company executive relating alleged kickbacks by contractors to Workers'
magazine reported that another key suspect told prosecutors that
Rousseff was aware of the scheme, an accusation that she has vehemently
"She will face
resistance on a number of fronts," said Carlos Melo, a political
scientist at Insper, a Sao Paulo business school. "This is a victory in
spite of all the problems - not an affirmation of a job well done."