RIO DE JANEIRO, (Reuters) – Dilma Rousseff, a former Marxist guerrilla, takes over as Brazil’s president this week, inheriting one of the world’s hottest economies but facing the near-impossible task of living up to the success of her charismatic mentor.
Under President Luiz Inacio Lula da Silva, Brazil has transformed in eight years from a crisis-prone underperformer to an economic powerhouse with millions of new middle-class consumers and a growing say in world affairs.
The rise of the Latin American giant should continue but with a very different leadership style after the often dour Rousseff, Lula’s former chief of staff and hand-picked successor, is sworn in at Saturday’s inauguration ceremony in the capital Brasilia.
Following a president who leaves office with approval ratings near 90 percent and has hinted at a comeback in 2014, Rousseff could be overshadowed by Lula and his achievements from the start.
“Her challenge is to occupy this enormous space left by Lula,” said Paulo Sotero, director of the Brazil Institute of the Woodrow Wilson Center in Washington.
But supporters say her early steps — pledging continuity with the Lula boom years while making clear she is very much her own woman — have shown the potential for the 63-year-old former Marxist to become a strong president in her own right.
Rousseff, who will be the first woman to lead Brazil, is a pragmatist and has surrounded herself with moderate ministers — many of them trusted names from Lula’s cabinet — and tapped respected technocrats for positions such as central bank head.
She showed a flair for the inspirational in her election victory speech in October by pledging to eradicate the remaining poverty in Brazil, then quickly reassured investors by vowing to cut spending — to the irritation of Lula.
A cancer survivor and divorced mother who likes to read Proust, Rousseff may change tack in foreign policy by putting more emphasis on human rights and moving to repair relations with Washington that soured over Lula’s embrace of Iran.
Above all, though, success will hinge on her ability to keep Latin America’s biggest economy on a roll and delivering the sharp rises in spending power that have lifted nearly 30 million people into the middle class since 2003.
“If she can continue to do that, people will embrace her like they did Lula. If the economy falters, she will have problems,” said James Green, a professor of Brazilian studies at Brown University.
SLOW GOING IN CONGRESS
Despite the strong mandate that Rousseff and the ruling coalition received in October elections, her agenda in Congress will likely be hostage to the vested interests that prevented Lula from passing structural, politically painful reforms.
Rousseff has already signaled she will leave the bloated pension and social security system untouched and focus instead on easing the bottlenecks that prevent Brazil from growing faster for longer like fellow emerging giants China and India.
Lacking the charm that helped Lula hold together the unruly coalition, Rousseff faces a struggle to achieve even that. The relatively modest goal of simplifying the sclerotic tax system — likely to be her first major legislative priority — may not be completed in her first year, said Erasto Almeida of U.S.-based consultancy Eurasia Group.
“There’s probably going to be criticism because some people would want to see reforms moving faster and would like to see more structural reforms,” he said.
“When economic fundamentals are strong, there isn’t much pressure on the government from the market to do those kind of reforms. There’s a tendency for complacency.”
A career technocrat and former energy minister, Rousseff will preside over an expansion of the state’s role in key areas such as the oil sector as the country prepares to tap vast new offshore fields. That will not go ahead, however, until Rousseff defuses a potentially bitter dispute between states over how billions of dollars in oil royalties are shared out.
She will also use state resources to build up Brazil’s decrepit roads, railways and airports as it prepares to host the World Cup and the Olympics in the next six years.
But most of the investors who have poured money into Brazil’s financial markets in recent years appear reassured that she will not overextend the state’s role and govern to the left of Lula. The tax reform, for example, would be a welcome relief for businesses tied up in Brazil’s notorious red tape.
“The Brazilian people will not accept governments spending more than is sustainable,” Rousseff said in her victory speech on Oct. 31. “Because of this we will make every effort to improve the quality of public spending.”
WARMER WASHINGTON TIES?
One of the biggest changes in style and substance may come on the foreign stage, where Lula used the full force of his personality to push Brazil’s role as a leader of the developing world on issues like trade and the environment.
Rousseff also sees strong ties with other big emerging powers as a priority, especially with a Chinese economy that overtook the United States as Brazil’s biggest trade partner during Lula’s second term.
Marco Aurelio Garcia, Lula’s special advisor on foreign relations who is staying on under Rousseff, told the Valor Economico newspaper this week that the government was planning “a package of initiatives toward China.”
But Brazil seems likely to give a higher priority to human rights concerns that were downplayed during Lula’s rule, an approach that drew rare global criticism for the president when he visited Iran this year to attempt to broker a nuclear deal.
Rousseff, who resisted Brazil’s military dictatorship and was tortured with electric shocks while jailed in the 1970s, said Brazil was wrong to have abstained from a United Nations resolution condemning Iran’s policy of death by stoning.
“The fact is that we now have a president for the first time who was a victim of torture,” said Sotero.
Rousseff’s lack of charisma compared to Lula could turn out to be an advantage for Brazil on the world stage as it returns to a more traditional diplomacy, he said.
“Sometimes in the last two years it looked like Lula was driven more by his own ego, his own persona than by national interests.”
