Newly re-elected, Brazil leader faces house divided; reconciliation needed to advance

Brazil’s re-elected leader Dilma Rousseff on Monday faced a house divided after a bitterly fought election that ended with the narrowest presidential win since the nation’s return to democracy three decades ago.

In her victory speech, Rousseff said her first task will be to seek reconciliation and to build bridges to those who didn’t vote for her.

“This president is willing to dialogue and that’s the first promise of my second term, to have a dialogue,” she said before cheering supporters in Brasilia.

But what’s not clear is how far the famously stubborn Rousseff will reach out or to what extent a highly fragmented opposition and a Congress that now has 28 parties wants to work with her, principally on long-delayed structural changes and shorter-term measures needed to boost a stagnant economy, nor on political reforms that Brazilians demand.

“We’ve never seen an election that’s been this divisive,” said Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson International Center for Scholars in Washington. “The things said during the campaign, by both sides, will make it very difficult for the nation to come together quickly.”

Rousseff has steep challenges on both the economic and political fronts.

Brazil’s economy fell into technical recession in August. It faces the internal pressure of lessening consumer demand and the external nightmare of China’s growth slowing faster than expected. Brazil’s economic expansion in the past decade was built on the spending of a newly minted middle class and the voracious Chinese appetite for commodities like iron ore and soy.

Massive offshore oil finds in recent years were called Brazil’s lottery ticket and its “passport” to developed-nation status by former president Silva. But state-run oil company Petrobras hasn’t made good on its potential of tapping the deep-water riches. Many blame Rousseff’s interventions in the oil firm, such as forcing it to keep gasoline at a cheap price to battle inflation, as hamstringing its ability to grow.

Now, Petrobras is at the center of a massive kickback scheme.

The tough economic scenario, the political fallout from the scandal, the divided election and the ever-present demands of the middle class that public services be greatly improved in return for the heavy tax burden they pay means that Rousseff’s road ahead will be bumpy.

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