Rousseff Elected President in Brazil


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Da Silva Protégée Resonated With Voters Seeking to Extend Departing Leader’s Legacy in Latin America’s Biggest Nation


SÃO PAULO, Brazil—Dilma Rousseff, a 62-year-old former leftist guerilla-turned-powerful cabinet minister, was elected Brazil’s first female president in a victory sealed by economic prosperity and the broad popularity of her predecessor and mentor, President Luiz Inácio Lula da Silva.

With 99% of the votes counted, Ms. Rousseff won 56% of the votes, compared with 44% for rival, José Serra, a former São Paulo governor, in a two-candidate runoff election. In early October, Ms. Rousseff won a multi-candidate first-round contest but failed to garner the 50% of votes needed to avoid a second round.

Brazil President Luiz Inacio Lula da Silva greeted supporters after voting Sunday in Sao Bernardo do Campo in Sao Paulo state, in the runoff election that will determine his successor.

The election elevates a relatively unknown bureaucrat to the helm of Latin America’s biggest country, as it carves out a bigger role in the global economy. Brazil became the world’s eighth-biggest economy in recent years, giving it enough clout to help push the U.S. and Europe to include emerging nations in talks on the global financial crisis. Brazil hosts soccer’s World Cup in 2014 and the Olympics in 2016.

“I voted for Dilma because I hope she’ll continue Lula’s work,” said Maria Rosa Lima de Souza, 52, a housekeeper in Rio de Janeiro’s working class Santa Teresa neighborhood. “Our way of life is improving.”

Leaving her home for a victory party at a hotel in Brasilia, the capital, Ms. Rousseff told reporters she was “very happy” and “I promise to honor the confidence (voters) showed in me.”

A twice-divorced economist who battled back from cancer last year, Ms. Rousseff won by promising continuity. During two terms in office, Mr. da Silva became one of Brazil’s most beloved presidents as a policy mix of exchange-rate stability and rising social welfare spending helped lift 21 million people from poverty. Ineligible for re-election, Mr. da Silva groomed Ms. Rousseff as his successor. His popularity even helped the Rousseff campaign survive a corruption scandal that in September prompted a former aide of Ms. Rousseff to step down from the government.

A message of extending Mr. da Silva’s legacy resonated with voters in a country set to grow over 7% this year. Household incomes rose by 32% under Mr. da Silva as millions of newly minted members of the middle class moved into new homes. Though many among Brazil’s rich elites revile both Mr. da Silva and Ms. Rousseff, the wealthy benefitted, too. Brazil’s benchmark stock index rose more than 500%, and Lamborghini opened its only Latin American dealership in São Paulo.

A woman voted at a polling station during Brazil’s presidential elections runoff on Sunday.

The results likely end the presidential ambitions of Mr. Serra, who is 68 years old and lost to Mr. da Silva in 2002. The loss also leaves his center-left Social Democrat party adrift on the national stage. While credited with laying the groundwork for the successful economic policies that Mr. da Silva later embraced, the party has been unable to match the popularity of Mr. da Silva’s Workers Party and is now amid a generational shift in leadership.

Though Brazilians voted for continuity, they are getting a far different leader. As president, the affable Mr. da Silva proved capable of keeping good relations with a spectrum of politicians at home and abroad. He may be the only Western leader friendly with U.S. President Barack Obama and Iran’s Mahmoud Ahmadinejad. Ms. Rousseff lacks that touch, observers say. As cabinet chief, she earned a reputation as a stern manager with a short fuse. Where Mr. da Silva is a generalist who professed not to read much, Ms. Rousseff bores into economic minutiae.

Ms. Rousseff’s first order of business may be making the transition to national leader from executor of Mr. da Silva’s policies. One of her chief challenges may be Mr. da Silva himself. Though the leader says will leave politics for a period, some analysts predict he may find it hard to resist interfering. Some even speculate the 64-year-old may consider running when he is eligible again in 2014.

“Lula could be very helpful to Dilma, or he could be very damaging,” said Paulo Sotero, who heads the Brazil Institute at the Woodrow Wilson Center in Washington D.C. “The question is, does he give her the political space to operate?”

The Making of Dilma Rousseff

Highlights of Ms. Rousseff’s life and career.

On the campaign trail, Ms. Rousseff vowed to build on Mr. da Silva’s gains to eradicate extreme poverty and lift Brazil firmly into the ranks of developed nations. Though Brazil has come along way since taming four-digit inflation in a previous government, the nation has a long way to go.

“This has been a two-decade process from a dire start to a new level of prosperity,” said José Sheinkman, a Brazilian-born economist at Princeton University who occasionally served as a sounding board for policy makers during Mr. da Silva’s first term. “The challenge for the new government is figuring out the next steps.”

Ms. Rousseff’s strategy centers on hundreds of billions of dollars in infrastructure spending—from Olympic stadiums to giant hydroelectric dams and bullet trains—meant to boost efficiency and create jobs. To do it, some economists fear Ms. Rousseff will intervene more heavily in the economy, a trend that accelerated when the government took a bigger stake in oil giant Petroleo Brasileiro recently.

Despite Brazil’s growth spurt, Ms. Rousseff inherits a tricky set of economic challenges. Brazil’s interest rates, already among the highest in the world, are poised to rise further and its currency is vastly overvalued, a combination that may slow the economy. One of Mr. da Silva’s legacies is a growing budget deficit. Since Mr. da Silva took office in 2003, public spending has ballooned from just under 9% of Brazil’s gross domestic product to over 19% this year, according to government figures

And despite its progress, Brazil still faces pressing developmental needs. For example, it lags even Latin neighbors Chile and Mexico in basic areas like life expectancy and infant mortality rates. And all three are behind emerging dynamos like South Korea in key areas like education.

But to become the wealthy nation Ms. Rousseff envisions, Brazil must tackle complex issues such as improving education to produce more college graduates and stamping out soaring crime rates to make its cities more livable, economists say.

“It can’t be a piecemeal effort,” said Márcio Garcia, an economist at the Pontificate Catholic University in Rio de Janeiro. “You have infrastructure, education, productivity, you have to formalize the economy.”

Diana Kinch contributed to this article.

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