Economic bets off for Brazil's Rousseff

Yahoo – AFP, Yana Marull, 30 Sep 2014

Brazilian President Dilma Rousseff attends the launching ceremony of the Agricultural

 and Livestock Plan in Brasilia, Brazil, on May 19, 2014 (AFP Photo/Evaristo Sa)

Brasília (AFP) - Dilma Rousseff is struggling to win re-election in Brazil with an economy that has gone from sizzle to fizzle in her four years in office as the country's first female president.

Hand-picked by former president Luiz Inacio Lula da Silva, Rousseff has proved unable to extend the era of economic growth that lifted more than 30 million people out of poverty under her popular predecessor.

And when Brazilians go to the polls next week, the poor economy could cost her the presidency and the Brazilian Workers Party (PT) a fourth consecutive term in power.

It's a far cry from 2010, when Rousseff cruised to victory as the country's economy roared forward at a 7.5 percent growth rate, making Brazil one of the world's emerging economies.

Since Rousseff took office in January 2011, strong headwinds have sprung up to blow the economy off course.

"Average growth between 2011 and 2014 was 1.5 percent per year -- very much below the four percent of the eight previous years," said economist Vinicius Botelho of the private Getulio Vargas Foundation.

In a photo released by the presidential press office, Brazilian President Dilma 

Roussef greets Cuban physicians before the ceremony sanctioning the law

 establishing the More Doctors Program in Brasilia on October 22, 2013 (AFP

 Photo/Roberto Stuckert Filho)

A rival for the presidency, Socialist candidate Eduardo Campos, charged Rousseff would be the first president in nearly 30 years to leave the country in a worse state than the one in which she found it.

Campos was killed in a plane crash in August, putting in Rousseff's path a new and arguably more formidable challenger -- Marina Silva, an environmentalist who polls show may beat Rousseff if the elections go to an October 26 runoff.

Big business, meanwhile, says Rousseff has not undertaken needed reforms to bolster competitiveness and for excessive government intervention in the economy.

A Dom Cabral Foundation study shows that the world's seventh-largest economy slid from 38th to 54th out of 60 countries on their competitiveness index over the past four years.

On the plus side

On the plus side, however, Dilma has a reputation for solid management and little tolerance for corruption. She fired six ministers in her first year in office.

Rousseff has promised to end extreme poverty in Brazil, a country with some of the starkest social inequalities in the world.

She cranked up welfare programs, which today benefit some 50 million Brazilians and pulled a further 11 million people out of poverty.

She also launched a social housing program and a policy to bring in thousands of foreign doctors -- chiefly from Cuba -- to cover shortages in poor and far-flung regions.

Furthermore, she set up a grant program allowing 100,000 Brazilian students to study at the world's best universities.

Such policies aid her re-election campaign, says Ricardo Ribeiro of consultants MCM.

A firework is set off during a protest against the FIFA World Cup demanding

 better social services in Rio de Janeiro, Brazil, on July 13, 2014 (AFP Photo/

Yasuyoshi Chiba)

But her popularity has sagged over the past year as inflation hit 6.5 percent, and major demonstrations that erupted in June 2013 in dozens of cities continued on a smaller scale through this year's World Cup.

Overly high hopes

"Her government started with the voters having very high hopes. When Lula left power, people were thinking life was going to get better much quicker," says Renato Meirelles, chairman of the Datapopular institute.

When that didn't happen "it engendered huge frustration," said Meirelles.

Another overriding priority has been the battle to overhaul Brazil's creaking infrastructure.

"That could have been the government's great legacy and there have been some successes such as some highway tenders," said Botelho.

But the population have had the "impression that projects have slipped well behind schedule and that public spending on them is excessive with the economic cost of financing them very high," he said.

Although the World Cup was largely a success, many Brazilians were angry that around a quarter of the $15 billion bill went into building stadiums rather than health, education and transport.

"The organization of the World Cup was considered a success but coincided with a moment in time when society wanted more investment targeting the improvement of public service," said Botelho.