Rousseff Re-Elected

After a long, hard-fought election campaign, Brazilian President Dilma Rousseff emerged victorious in her bid to win a second term in office in this week’s second round of voting in Brazil’s presidential election.  Prior to the presidential election, she had been expected to win re-election relatively easily.  However, her bid for re-election proved to be much more difficult than expected, due to the emergence of two strong contenders as well as the continued poor performance of Brazil’s economy.  As President Rousseff and her Workers’ Party (PT) have retained their firm group on power, they must take steps to boost economic growth in Brazil or else they will face mounting social unrest that will undermine the president’s second term in office. 

In the second round of voting in Brazil’s presidential election, President Rousseff won 51.6% of the vote, while her challenger, the center-right politician Aeceo Neves, won 48.4%.  In the first round of voting, it appeared that former Environment Minister Marina Silva was posed to reach the second round of voting, but she faded in the days before the vote and finished a distant third in the first round.  This was a fortunate development for President Rousseff, as polls had suggested that Ms. Silva would have had a very strong chance of defeating the president in the second round of voting.  In the end, Mr. Neves provided a strong challenge to President Rousseff and was ahead in many of the polls taken before the election, until support for President Rousseff rose sharply in the final days of the campaign, leading to her victory this week. 

President Rousseff did very little herself to merit a second term in office and during her victory speech she admitted that she needed to become “a much better president than I have been until now”.  Her greatest failings have involved her government’s poor management of Brazil’s economy, which has been mired in a deep slump over the past four years.  In fact, Brazil’s economy has fallen into a recession this year, an embarrassing predicament for a country that, just a few years ago, was predicting future economic growth rates along the lines of those recorded by China and other large Asian emerging markets.  Moreover, her government has been rocked by many corruption scandals during her first term in office and her Workers’ Party has been tainted by scandal since it first came to power 12 years ago.

These challenges are likely to make President Rousseff’s second term in office quite challenging.  On the economic front, Brazil’s economic slump is forecast to continue in the coming years as the government has not done enough to boost Brazil’s economic competitiveness and this will cost Brazil opportunities to attract foreign investment and increase its export revenues.  Meanwhile, the social tensions that erupted into major protests last year and likely to worsen as Brazil’s economic struggles continue and this could cost President Rousseff much of her support and lead to higher levels of unrest in Brazil.  Finally, many of Brazil’s neighbors in South America are facing massive challenges, including the threat of economic collapse in Venezuela and Argentina and the risk of social unrest across much of the region.  Altogether, President Rousseff must perform much better in her second term in office in order to deal with Brazil’s mounting challenges or else her support will fade quickly, leaving Brazil with a very weak central government at a time when strong leadership is needed.