When Dilma Rousseff took over as president of Brazil in January, she had rather big shoes to fill. Her predecessor, Luiz Inacio Lula da Silva, finished his two terms as one of the most popular leaders in the world, with his country riding a wave of economic progress and optimism.
Rousseff, known as Dilma in Brazil, had little executive experience or public profile until Lula handpicked her to carry the torch for his center-left Workers’ Party. The former guerrilla waged a successful campaign and gained a reputation as a tough and pragmatic technocrat, but many were unsure whether she’d have the skill, or luck, needed to follow in Lula’s seemingly blessed footsteps.
So far, however, Brazil’s first female president has exceeded many expectations. A recent poll gave Rousseff an approval rating of 71%. Voters liked the way she came down hard on a series of corruption scandals, the likes of which dogged Lula’s presidency. The Brazilian economic miracle, fueled by a commodities trade with Asia and a domestic consumption boom, is still improving the lives of families. Abroad, her administration has been critical of key allies, including the U.S., without causing any diplomatic rows.
“She’s done quite well,” said David Fleischer, a political scientist at the University of Brasilia. “She managed to turn around her first big challenge, the corruption scandals, and make it into a political victory.”
After scandal engulfed her chief of staff this year, Rousseff acted quickly at the whiff of corruption elsewhere, and since then five of her Cabinet ministers and dozens of officials have been shown the door. (Ironically, Rousseff, who served as Lula’s chief of staff, probably rose to prominence because corruption brought down so many of those around her in Brasilia, where stories of pork and graft have long disgusted voters.)
As politician after politician got the ax at her hands this year, the local news media came to the conclusion that she was committed to “cleaning house” in the capital.
On the economic front, Rousseff inherited fast growth, after a decade in which China replaced the U.S. as Brazil’s main trading partner and high prices for commodities such as iron ore and soy, combined with moderate social spending, lifted tens of millions out of poverty.
But even if Brazil is still growing much faster than the crisis-ridden U.S. and Europe, its economy is expected to slow down this year, and that could take some of the shine off Rousseff’s presidency.
Tony Volpon, a New York-based economist for international bank Nomura Securities, says the extension of new credit to a growing middle class that has powered a consumption boom will eventually reach its limit.
“That will be one part of the reason why Brazil will slow down over the next few years,” he said. “Brazil now is seen as an attractive place to invest, largely because of its connection with the Asia and China growth story. That is seen as the most dynamic part of the world, but anything that hits at that theme, such as a slowdown or crash in China, would make Brazil start to look more like it did in the bad 1990s than it has in recent years.
“Brazil won’t fully return to that era — many of these changes are permanent — but we could see something more similar.”
Volpon said Rousseff has shown “a willingness to be aggressive” on economic matters but has so far made no major moves on more difficult structural reforms — involving the tax code or fiscal policy, for instance — that could make Brazil more competitive in the long term.
In the short term, though, the biggest threat is that of contagion from crisis in the United States or Europe, and Rousseff has not been shy about criticizing her richer allies. During the debt-ceiling standoff in Washington and the spread of the Eurozone debacle, she said that the two regions’ “insanity” and “political inability” to solve their problems posed a threat to the whole world.
“Brazil has long complained, with good reason, that the world was blown apart because of Wall Street,” Fleischer said. “Now they’re complaining that Obama didn’t go through with major action on the banks, and that loose monetary policy in the U.S. has been pushing down the dollar against the Brazilian currency.”
In criticizing Wall Street, Rousseff is in line with Lula, who famously said the world recession was caused by “blue-eyed bankers.” But one of her first diplomatic acts was to distance her administration from Iran, a country that Lula sometimes refrained from criticizing openly.
A woman tortured by the military dictatorship of Brazil, she took an early opportunity to strongly criticize the practice in Iran of stoning women, winning points with some voters.
Her comment was characteristically uncompromising: “I do not agree with practices that have medieval characteristics [when it comes] to women,” Rousseff told the Washington Post. “There is no nuance; I will not make any concessions.”