Challenges Faced by Brazil’s Rousseff in 2nd Term

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The incumbent President of Brazil, Dilma Rousseff, won Sunday’s election by a very small margin, leading some political analysts to believe that she will have a difficult time in approving in Congress austerity reforms needed to restore international credibility while still trying to meet demands from the middle and lower classes.

“Politically Rousseff’s second term will be difficult, ” says Christopher Garman head of Emerging Markets Research at Euroasia Group. In a teleconference to discuss the post-election scenario, the political scientist says he believes the chances of ample structural reforms being approved in the next four years are slim.

“We will see changes in infrastructure and macroeconomic policies, but these adjustments will be modest and the changes will not be deep enough for Brazil to have a shock of credibility,” said Garman.

Rousseff’s political task has been made more difficult by the results of this year’s Congressional elections. Come February 2nd (when newly elected Congressmen take office) Brazil’s legislative body will count on representatives from twenty-eight different parties, instead of the current twenty-two.

In the Chamber of Deputies, the Workers’ Party (PT) lost eighteen seats, while the Brazilian Democratic Movement Party (PMDB), its main political ally, lost thirteen. A more fragmented Congress, says Garman, along with Rousseff’s declining approval rates is likely to significantly hinder the President’s ability to negotiate with legislators.

Another challenge facing the incumbent president during the second term will be meeting the demands of the lower and middle classes. While under the Workers’ Party (PT) administrations (2002-2014) welfare programs, such as Bolsa Familia, lifted thousands from extreme poverty and the country’s once small middle class flourished, these same voters now want change.

“They are not satisfied with the current public services, especially education and health. (Rousseff’s) challenge during the second term will be how to deal with these demands.”

According to Garman, Rousseff will likely be forced to make unpopular decisions to contain rising inflation and that is likely to affect her already declining approval rates. “She will be politically weaker during these next four years, and that may hinder what she will be able to accomplish both socially and economically.”

On Tuesday, October 28th, Congress delivered the first blow to Rousseff’s second term: the Chamber of Deputies rejected a Presidential decree that established public consultations surveys before the implementation of government policies.

The decree would have been a first step for Rousseff to fulfill what she deems as a priority in her second term: unity and dialogue with all sectors of society. “This president is willing to dialogue and that’s the first promise of my second term, to open up dialogue exchanges,” said Rousseff during her victory speech. This desire, however, under the current scenario is easier said than done.

Related coverage: Brazil's Stock Market Tumbles With Rousseff Re-Election · Dilma Rousseff Re-Elected as Brazil’s President · Brazil’s Central Bank Increases Interest Rate · Major Policy Shifts in Next Rousseff Term Unlikely

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