Huge challenges ahead for Rousseff after narrow victory in Brazilian election

Brazil’s newly re-elected President Dilma Rousseff faces huge challenges to govern the sprawling South American country after winning a deeply divisive race by a narrow margin to retain power. The left winger beat business favorite Aecio Neves 51.6 percent to 48.4 percent in a hard-fought run-off on Sunday, leaving her with a fragile mandate to reboot the recession-hit economy and answer voters’ frustrations over corruption, weak public services and unemployment. Brazilian political analyst Andre Cesar warned: “There are serious accusations of corruption at state oil firm Petrobras, and the country is divided after an extremely polarizing election campaign.”

The economy, whose growth will be close to zero this year, is in bad shape. In Congress the president has a volatile majority and faces a fragmented legislature with 28 political parties.

Political analyst Andre Cesar

The scenario has changed dramatically since 2010, when Rousseff first won election, taking over from her Workers’ Party mentor Luiz Inacio Lula da Silva. The world’s seventh-largest economy grew 7.5 per cent that year, the peak of a decade-long boom that fueled unprecedented consumption and lifted millions from poverty. But after four years of sluggish growth culminating in recession in the first half of 2014, she has been accused of excessive interference in the economy - but insists she has increased wages and brought unemployment to an all-time low of 4.9 per cent. Rousseff will also have to try to win back the confidence of Brazilians who are fed up with their political system - the one issue that unites the country. “Ninety-two per cent of voters said no candidate in these elections would bring the changes Brazil needs,” said Renato Meirelles, head of polling firm Data Popular

The first challenge will be to announce what she’ll do as far as economic policy and the government’s books. The president has to try to recover lost confidence.

Economist Jose Francisco Lima Goncalves of Banco Fator.

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