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, analysts said.
The leftist incumbent beat business favorite Aecio Neves 51.6 percent to 48.4 percent in a hard-fought run-off Sunday, leaving her with a fragile mandate to reboot the recession-hit economy and answer voters' frustrations over corruption and weak public services.
Political analyst Andre Cesar summed up the laundry list of problems facing Rousseff as she starts her next four years in power.
"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. There are serious accusations of corruption at state oil firm Petrobras, and the country is divided after an extremely polarizing election campaign," he told AFP.
The scenario has changed dramatically since 2010, when Rousseff first won election, taking over from her Workers' Party (PT) mentor Luiz Inacio Lula da Silva.
The world's seventh-largest economy grew 7.5 percent 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, the business world has grown hostile to Rousseff.
"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," said economist Jose Francisco Lima Goncalves of Banco Fator.
Rousseff's critics accuse her of excessive interference in the economy that chokes growth and competitiveness.
She has promised to change her finance minister, and markets are keenly awaiting the announcement.
Though the country still attracts major foreign investment, "business confidence is at its lowest level in five years, executives and investors are unhappy. It's very urgent for the president to build bridges," said Richard Lapper, chief analyst at LatAm Confidential, a research unit of the Financial Times.
- Jobs at risk -
Rousseff, an economist by training, has defended her management of the economy, insisting it increased wages and brought unemployment to an all-time low of 4.9 percent.
But some analysts warn the economy risks shedding jobs in 2015 -- and that may add to her headaches.
"Job security has been one of the main pillars holding up the current government. Seventy percent of Brazilians feel their jobs are safe," said Mauro Paulino, director of polling firm Datafolha.
The economic funk will meanwhile make it more difficult for Rousseff to address frustrations that drew a million Brazilians into the streets last year in protests that shook the country.
"Brazilians are demanding improvements in public services -- health and education. But she will have to do it with a limited budget because of the economic situation," said Vinicius Botelho of the Brazilian Institute of Economics at the Getulio Vargas Foundation.
- Corruption, distrust -
Dressed in white, Rousseff used her victory speech Sunday to call for "unity" and "dialogue" after a virulent campaign that split the country along class lines.
She also vowed to tackle corruption, an issue that has dogged the PT throughout its 12 years in power and threatened to derail her campaign after the multi-billion-dollar kickback scandal broke at Petrobras, implicating dozens of politicians -- mainly her allies.
"The investigations into the scandal will reach their conclusion after the elections. If they confirm the allegations, it could unleash a crisis," said Ricardo Ribeiro of consultancy MCM Consultores.
Rousseff will also have to try to win back the confidence of Brazilians who are fed up with their political system -- the one issue on which the country seems able to agree.
"Ninety-two percent of voters said no candidate in these elections would bring the changes Brazil needs," said Renato Meirelles, head of polling firm Data Popular.
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, analysts said.
The leftist incumbent beat business favorite Aecio Neves 51.6 percent to 48.4 percent in a hard-fought run-off Sunday, leaving her with a fragile mandate to reboot the recession-hit economy and answer voters’ frustrations over corruption and weak public services.
Political analyst Andre Cesar summed up the laundry list of problems facing Rousseff as she starts her next four years in power.
“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. There are serious accusations of corruption at state oil firm Petrobras, and the country is divided after an extremely polarizing election campaign,” he told AFP.
The scenario has changed dramatically since 2010, when Rousseff first won election, taking over from her Workers’ Party (PT) mentor Luiz Inacio Lula da Silva.
The world’s seventh-largest economy grew 7.5 percent 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, the business world has grown hostile to Rousseff.
“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,” said economist Jose Francisco Lima Goncalves of Banco Fator.
Rousseff’s critics accuse her of excessive interference in the economy that chokes growth and competitiveness.
She has promised to change her finance minister, and markets are keenly awaiting the announcement.
Though the country still attracts major foreign investment, “business confidence is at its lowest level in five years, executives and investors are unhappy. It’s very urgent for the president to build bridges,” said Richard Lapper, chief analyst at LatAm Confidential, a research unit of the Financial Times.
– Jobs at risk –
Rousseff, an economist by training, has defended her management of the economy, insisting it increased wages and brought unemployment to an all-time low of 4.9 percent.
But some analysts warn the economy risks shedding jobs in 2015 — and that may add to her headaches.
“Job security has been one of the main pillars holding up the current government. Seventy percent of Brazilians feel their jobs are safe,” said Mauro Paulino, director of polling firm Datafolha.
The economic funk will meanwhile make it more difficult for Rousseff to address frustrations that drew a million Brazilians into the streets last year in protests that shook the country.
“Brazilians are demanding improvements in public services — health and education. But she will have to do it with a limited budget because of the economic situation,” said Vinicius Botelho of the Brazilian Institute of Economics at the Getulio Vargas Foundation.
– Corruption, distrust –
Dressed in white, Rousseff used her victory speech Sunday to call for “unity” and “dialogue” after a virulent campaign that split the country along class lines.
She also vowed to tackle corruption, an issue that has dogged the PT throughout its 12 years in power and threatened to derail her campaign after the multi-billion-dollar kickback scandal broke at Petrobras, implicating dozens of politicians — mainly her allies.
“The investigations into the scandal will reach their conclusion after the elections. If they confirm the allegations, it could unleash a crisis,” said Ricardo Ribeiro of consultancy MCM Consultores.
Rousseff will also have to try to win back the confidence of Brazilians who are fed up with their political system — the one issue on which the country seems able to agree.
“Ninety-two percent of voters said no candidate in these elections would bring the changes Brazil needs,” said Renato Meirelles, head of polling firm Data Popular.
