Brazil's new president: Raining on her parade, but still smiling

The Economist

THE rain pelted down on Brasilia on the afternoon of January 1st as Dilma Rousseff’s cavalcade drove along the Esplanade of the Ministries on her way to the National Congress. But the spirits of Brazil’s first female president seemed undampened, as she smiled broadly and waved through the window of the Rolls Royce that replaced the planned open-topped car at the sea of umbrellas on either side. Once in Congress, she paid tribute to her predecessor and mentor, Luis Inácio Lula da Silva, in particular for the progress made during his eight years in power in reducing extreme poverty. “Social mobility was impressive during Lula’s two mandates,” she told members of Congress and other luminaries. “But poverty still exists, disfiguring our country and stopping us from claiming to be a fully developed nation.”

To change that, she said, would require continued economic growth, job creation, price stability and a better return on public spending. The task of simplifying Brazil’s byzantine tax code she described as “urgent”. She promised reforms that would strengthen the country’s “young” democracy, including increased transparency. And she thanked Brazilians for electing their first woman president. “I am not here to praise my own life,” she avowed, “but to glorify the lives of all Brazilian women. My supreme promise is to honour women, protect the weakest and to govern for all.”

Ms Rousseff is stepping into the presidency at an extraordinary moment, both politically and economically. Lula’s name appeared on the ballot paper in every presidential election since 1989 until in 2010, barred by the constitution from seeking a third term, he anointed Ms Rousseff as his preferred successor. In his own campaigns he spoke almost exclusively of poverty—and to the poor. Now, Brazil’s economy is booming and the growth of the middle class, which included the majority of Brazilians for the first time in 2009, is changing every facet of life. Little wonder that on the election trail both Lula and his protégée mentioned the middle classes at least as often as the poor, offering a potent policy combination of income transfers to the poorest and praise and support for the upwardly mobile.

But Ms Rousseff must move quickly to tackle the problems of growth like high and rising inflation, an overvalued currency and a big increase in consumer credit. Then there are the task Lula left undone. These include a list of reforms that defeated even as consummate a politician as Ms Rousseff's predecessor. Brazil’s labour code remains an anachronism; its payroll taxes are far too high; its bureaucrats are obstructionist and unsackable; and political corruption is still rife. It is a daunting to-do list, but since being elected on October 31st all the signs have been that Ms Rousseff knows what she needs to do, and has the guts to do it.