REUTERS/Ricardo moraes

dilma rousseff:
Brazil’s “automatic pilot”
Brazil’s leading presidential candidate plans to maintain the popular policies of lula’s administration

september 2010
 dilma rousseff september 2010

special report

rousseff promises more of the same

as she dashes to the presidency
While Brazil’s likely next president Dilma
Rousseff is not the leftist-in-waiting that many
investors fear, there is legitimate concern that
hers could be a status-quo presidency, unable
or unwilling to push through major reforms to
Brazil’s tax, labor or fiscal structure. As a result,
there is a risk that Latin America’s economy
could eventually stagnate under her watch.

By Brian Winter and Natuza Nery TAKING THE SPOTLIGHT: Dilma Rousseff, Brazilian presidential candidate for the Workers’
JUIZ DE FORA, Brazil, September 23 Party, speaks at the Economic Forum in Sao Paulo, May 31, 2010. REUTERS/stringer

Here’s some advice for anyone who meets Dilma Rousseff (aka “Stella.”) “Is Brazil growing (that quickly) now?” she asked sharply.

First, speak quickly. And second, if you’re looking to ingratiate Well, yes, but some economists say...
yourself, it’s probably not a good idea to suggest that major reforms
are needed for Brazil to retain its title as one of the world’s fastest- “But is it growing?”
growing emerging economies.
Yes.
In an interview with Reuters, the woman who is almost certain to be
elected Brazil’s president in October flatly dismissed the need for big “Well, then, it’s possible,” she concluded.
budget cuts or changes to some of the world’s most restrictive labor
laws. Asked if it was possible for Brazil to keep growing at a 7 percent The message was clear, and it was reinforced in interviews with about
annual pace without such reforms, Rousseff shook her head, smiled, a dozen of Rousseff’s top advisers: for better or worse, the 62-year-
and interrupted the question. old former guerrilla leader, who has evolved over time into a highly
pragmatic career civil servant, does not plan major changes to Brazil’s
economic policies if she is elected.

Rousseff’s wager is that she will be able to create millions of jobs,

improve Brazil’s woeful infrastructure and schools, and harness its
newfound oil wealth without deviating substantially from the mix of
social welfare plans and market-friendly policies that have made her
former boss, current President Luiz Inacio Lula da Silva, wildly popular
both at home and on Wall Street.

“We’re going to follow Lula’s path!” Rousseff vowed to a crowd of

10,000 at a Friday night rally in the southeastern city of Juiz de Fora.
Lula, who plucked her from relative obscurity to run for elected office
for the first time in her life, stood by her side, beaming.

THE CHOSEN ONE: Brazil’s President Luiz Inacio Lula da Silva rallies with his chosen successor,
Rousseff, on the campaign trail in Osasco, May 20, 2010. REUTERS/PAULO WHITAKER
Lula, for his part, has left little doubt that he expects his chosen
successor to hew closely to his policies when he leaves office on Jan.
1. As he told a crowd in August: “If I see something wrong, I’m going
to call my president and say look, there’s a problem here. You can take
care of it, my child, because I wasn’t able to.”

2
 dilma rousseff september 2010

“we’re going to do what we can, but there are certain areas

where you can just turn on the automatic pilot.”

As president, Rousseff will likely oversee a continued expansion

of the government’s role in the strategic oil sector, according to
her advisers. State-owned banks will keep playing a major part in
providing mortgages for low-income families and doling out funds
for infrastructure projects, especially as Brazil prepares to host the
World Cup and Olympics in 2014 and 2016, respectively.

Yet fears that Rousseff will govern significantly to the left of Lula --
expressed by some investors and opposition politicians -- seem overdone.

An examination of her time as energy minister and then as cabinet

chief in Lula’s government paints a portrait of a demanding technocrat
concerned primarily with job creation who openly disdains the
inefficiencies often seen in the public sector. She has repeatedly
surrounded herself with the most market-friendly officials in her left-
leaning Workers’ Party.

Instead, the primary risk with Rousseff seems to be a status-quo

presidency that results in economic stagnation. Given her lack
of appetite for major reforms, some economists fear that Brazil’s
notoriously high costs of doing business could soon drag the country
back to its trend growth level of years past -- around 3 percent -- and
thus cause the country to fall behind its high-flying peers in the so-
called BRIC group of big emerging markets: Russia, India and China.

Rousseff’s relative lack of charisma or executive experience could

also leave her government vulnerable in the event of an unexpected
external or internal crisis. Her potentially volatile coalition of political
parties is another question mark, as is the bout of moderate cancer
that she suffered, and completely overcame, in 2009.

Yet, like their future boss, many potential officials in a Rousseff

government seem unconcerned that Brazil’s run of prosperity could ONCE A REBEL: Rousseff’s mugshot from her days with the Colina, 1970. REUTERS/HANDOUT
end any time soon.

“We’re going to do what we can,” said Fernando Pimentel, a senatorial The daughter of a well-to-do Bulgarian immigrant who fled political
candidate and adviser to Rousseff’s campaign who has known her oppression in his own country, Rousseff joined a radical leftist
since the 1960s, when as teenagers they were both involved in the resistance group known as the Colina shortly after entering the
armed resistance to Brazil’s dictatorship. economics program at the Federal University of Minas Gerais.

“But there are certain areas where you can just turn on the automatic
pilot,” Pimentel added, citing the finance ministry as an example.
“Brazil is in a stage of tremendous growth.”
FROM JAIL, AND TORTURE, TO PUBLIC OFFICE
The leftist groups that proliferated throughout Brazil never engaged
in large-scale combat or posed a serious threat to the military
government. Instead, they consisted primarily of loosely affiliated
cells in urban areas that robbed banks, set off bombs and kidnapped
and killed political figures.

Rousseff has downplayed the importance of her activist youth, which Rousseff’s second husband, Carlos Araujo, was a fellow dissident. He said
saw her imprisoned for nearly three years and tortured by her military that her responsibilities consisted primarily of “coordinating” the actions
captors. But the truth is that, while the era did not define her, it is of various cells. As the military cracked down, both went on the run for
critical to understanding her rise in Brazilian politics. months at a time and assumed aliases -- including, in her case, “Stella.”

3
 dilma rousseff september 2010
POWER UP: President Lula da Silva waves alongside his cabinet chief, Dilma Rousseff, during
the inauguration of a thermoelectric plant, March 10, 2010. REUTERS/PAULO WHITAKER
Rousseff herself “never picked up a gun,” Araujo said. “And she never
fired a shot.”
Husband and wife were both soon captured. Rousseff suffered
“extremely cruel” torture while in prison, Pimentel said, including
repeated electric shocks.
“nobody thought – not even
her - that she would ever be a
major candidate for anything.”
“It pushed her to the edge,” Pimentel said.
Even prior to her imprisonment, though, Rousseff had begun displaying
the pragmatic streak that would come to define her career. Pimentel
said she “was one of the first among us to realize” that the guerrillas
were outgunned and badly organized, and would not succeed in
toppling the military.
Indeed, upon her release from jail in 1973, Rousseff never really
looked back. She resumed her studies in economics and completely
gave up hard-line resistance, Araujo said.
“Just as we got into that world quickly, we exited it quickly too,” he
said. The two are now divorced, but they remain close and the car
in the driveway of Araujo’s house in Porto Alegre has a giant Dilma
sticker on the rear window.
Over time, Rousseff’s militancy proved to be anything but a handicap.
As in other South American countries such as Argentina and Chile,
the resistance movement in Brazil evolved into an insular fraternity
of politicians, most of whom moderated their views but never quite
abandoned their leftist roots -- or one another.
After democracy returned in the 1980s, they would come to dominate
their countries’ politics -- by elected means.
“I gave Dilma her first (high-ranking government) job because of her
courage in the armed fight,” said Alceu Collares, a former governor of
the southern state of Rio Grande do Sul, who made Rousseff the state’s
energy secretary in the early 1990s. “I always admired those people.”
Rousseff, who in intervening years had worked at a regional think-
tank and served as an adviser to trade unions, eventually acquired a
reputation as an effective, if unspectacular, administrator.
As energy secretary, she worked well with private-sector companies
to help plug in some of the gaps in the state’s power grid and avoid
blackouts that plagued the rest of Brazil, said Olivio Dutra, another
former governor.
She also began to shed an image as a somewhat frumpy “hippie”
who wore thick glasses, sandals and paid no attention to her hair,
said Neuza Canabarro, Collares’ wife. She recalled one occasion when
Rousseff showed up to work wearing makeup for a TV interview.
“That’s when we discovered that she was pretty,” Canabarro said,
laughing fondly.
During this period, Rousseff cultivated a love for poetry and literature
-- one of her favorite writers is the French novelist Marcel Proust -- and
gave birth to her only child, a daughter, Paula.
But there was no indication that she would ever rise above the
status of mid-level public servant, Dutra and others said. “Nobody
said, nobody thought -- not even her -- that she would ever be a
major candidate for anything,” Dutra said. “She never did anything to
indicate that was her goal.”
ON THE NATIONAL STAGE, A CRISIS AWAITS
When she was finally given an opportunity on the national stage,
Rousseff seized it -- and began to reveal her true colors as a leader.
EARLY YEARS: President Lula da Silva made Rousseff his Energy Minister in 2003. Both appear
at the Mercosur presidential summit in Paraguay, June 20, 2005. REUTERS/JORGE ADORNO
4
 dilma rousseff september 2010
The year was 2003, and Lula had just been elected president on his fourth
try. The former metalworkers’ union leader, who in previous campaigns
had advocated defaulting on Brazil’s debt and nationalizing key industries,
was under intense pressure to demonstrate to panicked financial markets
that he would not undertake radical changes as president.
Eager to calm investors before the financial system fell apart, Lula
reached into a shallow pool of officials from the moderate wing of his
Workers’ Party to staff critical posts in his government. That included
Rousseff, who had defected only three years prior from a different
leftist party based in Rio Grande do Sul.
Lula put her in charge of the energy ministry, where a crisis awaited.
Brazil was still reeling from national electricity shortages, the
consequence of a drought that left Brazil’s hydroelectric dams
depleted, but also decades of underinvestment in more diverse
energy sources. The result was widespread rationing that shaved
more than a percentage point off economic growth in 2001.
Rousseff’s task was to lead a “complete overhaul” of the sector to
prevent it from happening again, said Mauricio Tolmasquim, her
former No. 2 at the energy ministry.
A working group of ministry officials gathered. Tolmasquim said that
some from the party’s more radical wing advocated a partial reversal
of the free-market reforms of the energy sector in the 1990s, which
would have restored the former state-run electricity monopoly
Eletrobras to a more prominent role.
LIGHTS OUT: Sao Paulo and Rio
de Janeiro went completely dark
after a major electricity outage
at the Itaipu hydroelectric
dam in 2009. The Itaipu dam
is the largest in the world and
the outage left tens of millions
of people without power. Sao
Paulo, Brazil, November 11, 2009.
REUTERS/PAULO WHITAKER
In the end, Tolmasquim’s more moderate proposal prevailed: a “Dutch
auction” system in which private-sector companies bid for projects
based on how low a rate they could provide to Brazilian consumers.
It also provided a legal framework that guaranteed their investments
over the long term.
“They called me the neoliberal of the group,” Tolmasquim recalled,
using a term often employed in Latin America to label someone a
stooge for private, usually foreign, capital. “But,” he added with a
twinkle in his eye, “I was the one she promoted to executive secretary.”
Lula’s administration has seen Brazil’s electrical capacity expand by about
4.4 percent a year, up from 3.9 percent a year in the previous government,
according to official data. Blackouts are no longer a major issue, although
Brazil’s electricity rates remain among the world’s highest.
The flip side has been Rousseff’s relationship with Petrobras, Brazil’s
state-run oil company. The company has been in the spotlight since
2007, when it made one of the world’s biggest recent oil finds -- as many
as 50 billion barrels of oil buried beneath a thick layer of salt more than
four miles (7 km) under the ocean’s surface. Lula has said the so-called
subsalt reserves could generate enough revenue in coming years to
push Brazil into developed-world status if successfully exploited.
Faced with a potential bonanza, Lula’s government -- with Rousseff
as the point person -- has largely rewritten the rules for the country’s
oil sector. Instead of the old system of auctioning concessions to oil
fields to companies, the government has proposed a new system
under which it owns the oil, and pays companies with the proceeds.
5
 dilma rousseff september 2010
CAMPAIGN TRAIL: Rousseff speaking at a campaign rally. The Workers’ Party candidate says
she plans to rule at the center. Maua, Brazil, May 21, 2010. REUTERS/PAULO WHITAKER
Meanwhile, Petrobras has paid a steep price for access to the subsalt oil.
As part of a complex capitalization plan that could be worth up to $79
billion -- which would make it the world’s largest-ever share offering --
Petrobras will pay the government for rights to the oil with its own shares.
The upshot: the Brazilian state will likely end up with a significantly
bigger ownership stake in Petrobras than before. Meanwhile, Petrobras
has committed to relying on local manufacturers for 65 percent of the
equipment used for drilling, vessels and platforms, despite concerns
that Brazil lacks the ability to produce all of it at home.
“oil had to be treated in a
different way. it’s naive and
an insult to our intelligence
to think of it as an ordinary
commodity.”
Faced with what they see as a government power play and an utter
disregard for minority shareholders, many investors have beaten
a path for the door. Petrobras shares have lost about 27 percent
since the start of 2010 -- wiping a whopping $70 billion-plus off the
company’s market value.
AIDES: ROUSSEFF HAS NO SPECIAL LOVE FOR THE STATE
Rousseff’s doubters typically cite Petrobras, and the massive expansion
of lending by state-run development bank BNDES in recent years, as
evidence that she will govern to the left of Lula once she is elected.
Rousseff “will try to centralize as much of the economy as she can,
giving power to corporatist groups and unions, above all,” said
Fernando Henrique Cardoso, who was president from 1995 to 2003
and whose party is now the main opposition.
In a report issued in August, Goldman Sachs said many foreign
investors were waiting until after the election to make “definitive
moves” in Brazil. “The concern is over the state’s role in the economy
and whether this will be reined in or expanded” under the next
government, the report said.
Luciano Coutinho, the president of the BNDES and a strong candidate
to be Rousseff’s finance minister, has defended the bank’s credit
expansion as a necessary response to the global financial crisis.
He also said in a rare interview in his Rio de Janeiro office that
Petrobras was a special case, and not indicative of Rousseff’s broader
outlook on private investment. “The notion that the state will play a
major role in her government is absolutely false,” said Coutinho, who
taught Rousseff economics during her post-graduate days.
Pressed on why investors should believe that a case as important as
Petrobras was an exception rather than the rule, Coutinho bristled. He
said oil was a “strategic resource,” and pointed to the rise of national
energy companies in other countries during the past decade.
“Oil had to be treated in a different way,” he said. “It’s naive and an
insult to our intelligence to think of it as an ordinary commodity.”
Other officials have also portrayed the subsalt find as a once-in-a-
lifetime opportunity to improve not only Brazil’s infrastructure, but its
energy industry as well.
“As president, Dilma will fight strongly ... for the independence of the
industry of goods and services for oil and gas,” said Maria das Gracas
Foster, Petrobras’ director of gas and energy, who is likely to play a
role in Rousseff’s government.
Coutinho said he didn’t believe that other state-run enterprises would
“grow massively” under Rousseff.
“She doesn’t have an ideological tendency to ... favor the public sector
or discriminate against the private sector. She is pragmatic and looks
primarily for results,” he said.
6
 dilma rousseff september 2010
“she’s not rude at all, quite the contrary. but people in the public
sector aren’t used to being asked for results.”
Nearly everyone else in Rousseff’s inner circle echoed that sentiment
in conversations both on and off the record. And during her
presidential campaign, Rousseff has again surrounded herself with
her party’s most market-friendly voices, including Coutinho and Lula’s
first finance minister, Antonio Palocci.
Tolmasquim described Rousseff as a “developmentalist”– concerned
primarily with homegrown, job-creating industries and infrastructure
projects. The main debate, in her mind, is “not state versus private,”
Tolmasquim said. “It’s ‘Made in Brazil’ versus not.”
The ultimate proof of Rousseff’s attitude toward the state? Araujo, her
ex-husband, points to the reputation she earned in the public sector
as brusque, even rude, with her subordinates. “Oh, she’s extremely
demanding,” he said, laughing. “She’s not rude at all, quite the contrary.
But people in the public sector aren’t used to being asked for results.”
“She’s obsessed with efficiency.”
PROSPERITY NOW, BUT THERE MAY BE TROUBLE AHEAD
As for just how she made her unlikely leap to frontrunning presidential
candidate... well, even Rousseff admits to being a little hazy on that one.
She says that Lula began by “joking around” about a possible
presidential run -- “the only way that someone who is not thinking
about becoming a candidate will get used to the idea,” she says.
Brazil GDP
1994, the year Brazil introduced the real, proved to be a turning point in Brazil’s economic history.
GDP – percent change from previous year
8
7 7.4
1
0.0
-1
‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00
Source: Banco Central do Brasil Reuters graphic/Stephen Culp
To this day, Lula has never formally asked her to run, Rousseff says.
“It was spontaneous, natural,” she said. “And over time, I just kind of
became a candidate.”
There’s another version to the story. It’s unlikely that Rousseff would
have been Lula’s chosen successor if not for multiple corruption
scandals during his administration that forced more obvious
candidates, namely former cabinet chief Jose Dirceu and Palocci, to
resign in 2005 and 2006, respectively.
“It was like she won the lottery,” said Collares, the former state governor.
Rousseff began the campaign as an enigma even within some political
circles in Brasilia. Her name recognition among voters registered in the
single digits, and the nomination did not go over well among some in the
Workers’ Party who wanted a better-known, more experienced candidate.
That helps explain why, from day one, she has staked her candidacy
on a message of total continuity of Lula’s policies, appearing by his
side at rallies and on TV as often as possible.
It has been an effective strategy. Under Lula’s mix of responsible fiscal
management and cash transfer programs to Brazil’s poorest, more
than 20 million Brazilians have escaped poverty since he took office.
In a country that was long defined by its massive gap between rich
and poor, inequality has fallen and a newly empowered lower-middle
class has been snapping up cars, homes and TVs in record numbers.
Est.
21/09/10
‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10
7
 dilma rousseff september 2010
Brazil, as a whole, has become consumed by its centuries-old, long-elusive
dream of becoming a global economic power worthy of its continental
size. Lula’s ability to keep inflation under control and entice foreign capital
-- plus booming demand for its commodities from China -- has made Brazil
a rare hotspot at a time when most developed economies are struggling.
Lula has been, and will remain, a hard act to follow. At a joint rally last
month in Osasco, an industrial suburb of Sao Paulo, Rousseff gave an
awkward, at times rambling catalogue of Lula’s accomplishments. She
then promised to be “the mother of all Brazilians” and concluded her
speech by pledging, at full-throated roar, that “this will be the election
that dignifies the women of our country!”
The crowd clapped politely, as if they were attending a golf tournament.
Lula then bounded on stage. The crowd burst into frantic cheering and
chanting as music blared and confetti fell. With the flair of an experienced
performer, Lula waited for the din to die down before grabbing the
microphone, leaning into the audience and flashing a huge grin.
“Comrades...” he began. And the crowd went wild again.
The difference in styles has a serious side that goes to the heart of
the limitations that Rousseff may face as president: if Lula, with his
75 percent approval rating and massive street cred with Brazil’s poor,
couldn’t get contentious legislation such as a tax reform through
Congress during eight years in office -- then how can she?
“WOMEN ARE HEROES”: French photographer JR covered the walls of favela Providencia
with photos of women. Rio de Janeiro, Brazil , August 25, 2008. REUTERS/BRUNO DOMINGOS
LARGER THAN LIFE: Rousseff and President Lula da Silva wave to supporters at a campaign
rally outside Sao Paulo. Campinas, Brazil , September 18, 2010. REUTERS/NACHO DOCE
And that, in a nutshell, is what worries critics, who believe the need
for change is clear. Rousseff “seems to believe that she can just
make investments and Brazil will grow, as if this will just happen
automatically,” said Cardoso, the former president. “It’s more difficult
than that. Without a new generation of reforms, it will be very difficult
to keep growing at this pace.”
The numbers back him up. A World Bank report published last year
ranked Brazil 129th out of 183 countries in terms of ease of doing
business. That put it well behind regional peers such as Chile (49th),
Mexico (51st) and even neighboring Argentina (118th), a country
which investors accuse of manipulating its basic economic data.
“this will be the election that
dignifies the women of our
country!”
The main reasons for Brazil’s lack of competitiveness, the report
concluded, were its onerous tax and labor systems. At 34.4 percent of
gross domestic product, the nation’s tax burden far surpasses its BRIC
peers and even developed countries such as Japan (17.6 percent) and
the United States (26.9 percent), according to a recent study by the
Brookings Institution, a Washington think tank.
Taxes are not only high, but maddeningly complex. An average
company in Brazil spends the equivalent of 2,600 hours a year
calculating and paying taxes, the World Bank said. That is about five
times the Latin American average.
Meanwhile, rigid restrictions on hiring and firing have relegated many
Brazilian workers to the black market, despite rigorous job growth in
recent years. According to the World Bank, a typical manufacturer in Brazil
must pay on average 46 weeks’ worth of salary to terminate a worker,
once severance costs, penalties and advance notice are factored in.
8
 dilma rousseff september 2010

Brazil unemployment
Brazil’s unemployment rate has steadily fallen as Latin America’s largest economy booms. This has
resulted in a tight labor market, putting pressure on employers causing workers to demand higher
salaries and more benefits.
Unemployment rate – percent
14

13

12

11

10

21/09/10
7
6.9%
6
2003 2004 2005 2006 2007 2008 2009 2010

Source: Instituto Brasileiro de Geografia e Estatiistica (IBGE) Reuters graphic/Stephen Culp

“you do major fiscal reform when you have economic crises, not when
you have the country’s international reserves (at record levels).”
The head of Brazil’s main industrial lobby, the National Confederation
of Industry, is among those who warn that such restrictions will
prevent Brazil from realizing its grand ambitions unless changes are
made. “If there is no change in the country’s business climate, we
won’t transform Brazil into the power and the (world’s) fifth-largest
economy as some foresee,” Robson Andrade said.
TAX REFORM? MAYBE. LABOR, FISCAL CHANGES? FORGET IT.
Among the major reforms, tax policy might have the best chance of
being addressed under Rousseff -- but even there, it may well fall short of
the major overhaul that many businesses are hoping for, her advisers say.
Meanwhile, Rousseff has ruled out major labor reforms, saying in
speeches she will not touch the rights of Brazilian workers -- who
form her party’s constituency.
As for the other dream held by some investors -- a major overhaul of Brazil’s
budget that could open up more cash for infrastructure spending by
cutting pension outlays, for example -- Rousseff is even more emphatic.
“I won’t do a fiscal reform,” she told Reuters. “You do major fiscal
reform when you have economic crises, not when you have the
country’s international reserves (at record levels), inflation within its
target range and decreasing public debt.”

Pimentel, the senatorial candidate, said that Rousseff has told advisers
she will probably send an omnibus tax bill to Congress. But he called
this approach the “Holy Grail,” and said Rousseff could also be willing
to make incremental changes to the tax code if that approach proves
more expedient.
He compared that strategy -- which he called a “bypass” -- to the
piecemeal approach Rousseff employed to execute infrastructure
projects as Lula’s chief of staff. “You do a bunch of little things, and it
has a large effect,” he said.
“We will control spending in good and bad times,” she vowed. “And
we will transform the Brazilian state into a more professional state
based on meritocracy.”
The risk is that, without finding substantial fiscal savings, Brazil will be
unable to increase the relatively small amount of money it invests in
infrastructure -- about 2 percent of GDP. By contrast, China spends about
16 percent. As is, Brazil’s ports and roads are completely overwhelmed,
and crops often rot before export because of bottlenecks.

9
 dilma rousseff september 2010

Yet, even if Rousseff did want major changes, it’s unclear she could
push them through Congress. Her main coalition partner, the PMDB
BRAZIL
party, is an ideologically disparate group that has shown little ELECTION
enthusiasm for major legislative initiatives under Lula, focusing POLLS
primarily on pork-barrel projects instead. Leading presidential
candidates for the Dilma Rousseff, Jose Serra,
Franklin Martins, Lula’s communications strategist and a close adviser October 3 elections Workers' Party (PT) Brazilian Social
to Rousseff, indicated that she is betting on responsible macroeconomic Former Chief of Staff Democracy Party
President Luiz (PSDB)
management policies that will bring down Brazil’s debt-to-gross Inacio Lula da Silva Former Governor
OPINION POLLS
domestic product ratio from its already low level of 41.7 percent. EVOLUTION (percentage)* state of Sao Paulo
50 50 51 49
47 49
That, in turn, should bring interest rates down from their current level 50
40 41
of 10.75 percent, among the world’s highest. Martins pointed out that 39
36
39
37
40
each full percentage point drop in interest rates generates about $9
36 37 36
billion in fiscal savings on Brazil’s debt payments. “That’s an entire 30 41
Bolsa Familia,” he said, naming Lula’s social program that sends 29 29 30 29
28 27 27 28
cash transfers to poor families. 20
Mar Apr May Jun Jul Aug Aug Aug Sep Sep Sep Sep
26 16 21 30 23 12 20 24 3 9 15 15
Martins says he’s sure that Rousseff will forge her own identity as
Source: Datafolha Estudio R. Carrera para
president. “Anybody who says she’ll be an automatic pilot doesn’t
know Dilma,” he said, laughing.
“Was there chaos?” she asked the crowd.
His other prediction -- that Rousseff would quickly grow into the role
of president, just as she has others throughout her career -- is also “Nooooooo!” they yelled back.
showing signs of coming true.
“Did Brazil grow?”
At the rally in Juiz de Fora, Rousseff looked much more comfortable
than she had at the Osasco speech, working the crowd into a frenzy “Yessssss!”
by singing Lula’s praises.
“Did (Lula) create 10 million jobs?” she asked. But before the audience
She said a new spate of corruption accusations that have shaken her could shout a reply, she yelled one of her own into the microphone:
party were just cynical scare tactics whipped up by the opposition -- “Nooooo! He created 14 million jobs!”
much like predictions that the economy would collapse if Lula was
elected in 2002, she said. Many in the crowd laughed.

Lula lingered backstage for part of the night, watching Rousseff work
the crowd.

Asked why he never actually asked Rousseff to run, Lula thought for
a moment. “Because it worked out,” he said with a smile and a shrug.
And then he bounded on stage, ready to push his chosen successor
one step closer to power.

(Additional reporting by Raymond Colitt, Editing by Todd Benson, Jim

Impoco and Claudia Parsons)
Click to check out the video on
Reuters Insider or visit: INTERACTIVE See results from Brazil’s election polls by clicking or visiting:
http://link.reuters.com/neh94p http://link.reuters.com/vux47n
COVER PHOTO: Brazilian presidential candidate for the ruling Workers’ Party, Dilma Rousseff, waves to the audience during a Brazilian mayors national meeting. Brasilia, Brazil , May 19,
2010. REUTERS/RICARDO MORAES

For more information contact:

Jim Impoco, Enterprise Editor, Americas Natuza Nery Brian Winter
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