Lula's protege Rousseff wins Brazil's presidency

SAO PAULO, Brazil — Dilma Rousseff, a former guerrilla turned economist and key confidant to Brazilian President Luiz Inacio Lula da Silva, was elected Sunday to succeed him in a run-off vote against Jose Serra, former governor of Sao Paulo and minister to Fernando Henrique Cardoso, Lula's predecessor.

Rousseff's victory was widely seen as an endorsement of Lula's policies, enacted over eight years in office, and a desire to continue them.

Lula's stewardship of the economy and social programs lifted millions here out of poverty and expanded the middle class. Additionally, under Lula's watch, Brazil became a global force, being named host of the 2016 Olympics and being credited for making pharmaceuticals more affordable to developing countries.

Although Rousseff started off here largely unknown, not having held any prior elected office, she campaigned on a platform of continuity. Lula was often by her side at events as well as in television advertisements, a key reason for the victory.

That made a difference to Sao Paulo resident Flavia Maria de Almeida. The 35 year-old English professor told McClatchy just after voting on Sunday in the dilapidated part of historic downtown that she was not convinced of Rousseff's leadership skills, saying that, "I do not like her." But she still voted for her, explaining that, "I believe in their philosophy. Lula cares about people and social problems. He has a good heart."

Rousseff, a 62-year-old reserved intellectual, and opera aficionado who enjoys attending concerts at the Kennedy Center for Performing Arts in Washington, also becomes Brazil's first female president and Latin America's fourth in recent years.

She won largely because Brazilians are delighted with the state of their country and with Lula, whose popularity registered 82 percent this week.

Not only the poor but all classes have benefited from the booming economy, and Brazil has become a magnet for foreign investors.

"Lula is the genuine popular leader," said Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson Center. He said in addition to his importance to the working class, "businesses are not complaining. Bankers are not complaining. And Rousseff is the beneficiary of this."

While Brazil was previously known to Americans mainly for its beaches and Carnival, today Brazilian investors own one-time American classic brands including Anheuser Busch and Burger King.

Brazilian construction firm Odebrecht is working on the Miami-Dade County airport in Florida. And Americans who fly commuter jets are likely to be on a Brazilian aircraft, manufactured by Embraer.

This was Serra's second attempt to become president. Though he is well-respected as a manager, his campaign had difficulty gaining traction. He also was portrayed as pro-privatization. This is the second straight presidential election that his party has lost due to this strategy, according to Sergio Amaral, an informal advisor and former communications minister under Cardoso.

Amaral told McClatchy that in reality Serra was in "favor of a stronger state," such that "it provides the right incentives for the private sector." He cited President Obama's health care bill and energy initiative as what Serra considered as models.

Rousseff earned respect from Lula as his minister of energy. In that role, she helped resolve major electricity shortages plaguing Brazil, and by including the private sector. In 2005 she became Lula's chief of staff during a time when his administration was rocked by corruption scandals and his government came close to collapsing.

In this position, she was side by side with Lula during his surprisingly warm relations with former U. S. President George W. Bush.

That she is known to Washington is likely to benefit U.S.-Brazil relations. She already met with President Obama in the Oval Office in a 20 minute meeting. Cliff Sobel, U.S. Ambassador to Brazil at the time and until 2009, told McClatchy that, "there was a warmth and chemistry that existed from the moment their meeting began. So they have already broken the ice."

She also met former National Secuity Advisor Jim Jones.

Rousseff's primary interaction with both Obama and Bush officials has been as Brazil's point person for the U.S.-Brazil CEO Summit, launched during the Bush administration.

Sobel added that Rousseff "firmly supports trade with the U.S. and sees that there is a lot that the U.S. and Brazil can do together. "

He said that he "never saw her come to the meeting with an ideology. Her focus was what was good for Brazil and in many cases it converged with what was good for American interests."

As part of this initiative, former Bush Secretary of Commerce Carlos Gutierrez also met with Rousseff five to six time he estimates. Gutierrez told McClatchy that, "There is no question that she has strong leadership skills." He added that, "She has a very clear and sharp mind."

To be sure, she is unlikely to become a Washington stooge. While she values the U.S.-Brazil relationship, she has also promised to continue Lula's emphasis of promoting integration within South America and furthering ties with the developing world.

This means she will likely continue Brazil's relations with Venezuela's Hugo Chavez, Cuba's Fidel and Raul Castro and Iran's Mahmoud Ahmadenijad,

Though she said little about foreign policy during the campaign, earlier this month at a meeting with the Jewish Federation of Sao Paulo, she defended Brazil's relationship with Iran and its role in negotiations involving the enrichment of uranium.

She said that her administration will maintain dialogue with Iran, but noted that,

"A relationship with Iran is in pursuit of peace and not a relationship in which you authorize or accept the denial of the Holocaust. It is a historical fact. It happened. The evidence is overwhelming and therefore, dramatic. It is not acceptable to return to that barbarism at any time in Human history",

Rousseff's biggest challenges are likely to come from domestic issues, at least initially. Brazil remains a difficult place to do business, with high tax burdens and enormous red tape. It continues to rank poorly in terms of competitiveness.

Rousseff will also have to separate herself from Lula.

Sotero said that Lula's initial success and much of his support cannot be explained by populism. His closeness to Rousseff during the campaign needs to be watched. He said that one question is whether Lula remains and "extends his power through Rousseff."

Sotero said that "would diminish him as a historic figure and complicate things for Rousseff."

(Sreeharsha is a special correspondent for McClatchy)