“Perspectives for the new Dilma Rousseff Government

(2011 – 2014)”

David FleischerInstitute of Political Science

University of Brasília

The Brazil Institute

The Woodrow Wilson CenterWashington, DC

November 17, 2010

The 2010 Campaign

- President Lula with 80% approval rating - He picked Dilma Rousseff “his” candidate - She left PDT to join PT in 1999 - PT accepts this choice

- She had never run for elected office - Considerable experience - MM&E (2003-2005) - Casa Civil (2005-2010) - Daughter of Bulgarian immigrant - Former guerrilla fighter - Arrested by military & tortured

April - Dilma & Serra tied at 37% - Ciro Gomes (PSB) leaves race - Marina Silva (PV) at 12%

June - PT-PMDB coalition + 8 parties - Michel Temer as Vice - PSDB-DEM coalition + 4 parties - Índio da Costa as Vice

Early September - Dilma peaked at 57% of valid vote - Casa Civil scandal exploded - Dilma declined 52% valid vote - Dilma voters Marina Silva

Dilma Rousseff Track of % ofPolling Inst. Voter Preference Valid Vote

Datafolha 51% 47% 51.6%

Ibope 51% 50% 54.3%

Vox Populi 52% 49% 55.7%

Sensus 50.5% 47.5% 54.7%

First Round Results % Valid

Candidates Party Nº Votes Vote

D. Rousseff PT 47,651,434 46.91

J. Serra PSDB 33,132,283 32.61

M. Silva PV 19,636,359 19.33

Second Round Campaign (October)

- “Tit-for-Tat” accusations

- Dilma portrayed as pro-abortion - Serra’s wife allegedly had abortion in US

- Dilma “tolerates” corruption - Corruption in Serra government in SP

Dilma maintains “comfortable” lead

Second Round Results % Valid

Candidates Party Nº Votes Vote

Dilma PT 55,752,092 56.05

Serra PSDB 43,710,422 43.95

DIlma Rousseff:Poll Inst. Track Valid Vote

Datafolha 53.9% 55.6%

Ibope 53% 57%

Sensus 52.3% 58.6%

Vox Populi 54% 57%

Dilma – Serra Regional Division

- Serra won 11 states (54% GDP) - South, Central-West + SP

- Dilma won 16 states - Northeast, North, MG, RJ, DF

- Some “recriminations” against NE

- Complaints about loss in MG

Breakdown of Congress (2011)

In 2011, Dilma Rousseff will have stronger majorities in Congress - Especially in the Senate

Pres. Lula campaigned to defeat SIX opposition Senators - Tasso Jereissati (PSDB-CE) - Arthur Virgílio (PSDB-AM) - Marco Maciel (DEM-PE) - Mão Santa (PSC-PI) - Heráclito Fortes (DEM-PI) - Efraim Moraes (DEM-PB)

Plus Cesar Maia (DEM-RJ)

Sept. Feb.Senate 2010 2011

DilmaPT-PMDB-PSB-PR-PP-PDT- 42 54PCdoB-PRB-PSC (51.9%) (67.7%)

OppositionPSDB-DEM-PPS- 37 27PTB-PMN-PSoL (45.7%) (33.3%)

Other 2 0 (2.5%)

TOTAL 81 81

Sept. Feb.Chamber 2010 2011

DilmaPT-PMDB-PSB-PR-PP-PDT-PCdoB- 338 353PRB-PSC-PTC (65.9%) (68.8%)

OppositionPSDB-DEM-PPS-PTB-PMN-PSoL- 158 139PRTB (30.8%) (27.1%)

OtherPV-PHS-PAN- 17 19PSL-PRP (3.3%) (3.7%)

TOTAL 513 513

Turnover only 44.25%

A new bloc is formed in Congress:

PTB-PP-PR 103 deputies in 2011

In 2003 & 2004 this same group blocked the political reform

This bloc will negotiate committee assignments & chairs in the Chamber

Allocate Senate & Chamber Presidents - Rotation, PT + PMDB??

The Lula Dilma Transition

- Organizing the “new” Gov’t.

- Dilma’s coordination team - Antônio Palocci - José Eduardo Cardozo - José Eduardo Dutra (Pres. PT) - Michel Temer (Pres. PMDB)

- Initial Coordination “tasks” 1) Articulate with party coalition 2) Filter names for cabinet 3) Articulate 2011 budget – Congress - avoid cost over runs and increased spending

Market pressures economic team Perhaps named by November 20

- Finance Minister - Sec. for Economic Policy - Central Bank President - Planning Minister

Dilma: Cabinet one-third women??? 11 out of 34 cabinet ministers??

- Lula has only three women in 2010

Like “Blair’s Babes” in 1997

José Luís Zapatero (2004) – 50% women

Michelle Bachelet (2006) – 10 out of 20

Dilma’s possible picks (women): - Maria das Graças Foster - Miriam Belchior - Tereza Campello - Tânia Bacelar - Clara Levin Ant - Márcia Lopes - Isabela Teixeira - Ideli Salvatti (PT-SC) - Gleisi Hoffmann (PT-PR) - Marta Suplicy (PT-SP) - Vanessa Grazziotin (PCdoB-AM) - Lídice da Mata (PSB-BA) - Maria do Rosário (PT-RS) - Iriny Lopes (PT-RS) - Manuela D’Avila (PCdoB-RS)

Dilma’s other possible picks (men): - Antônio Palocci - José Eduardo Cardozo - Paulo Bernardo - Fernando Pimentel - Guido Mantega - Aloísio Mercadante - Nelson Barbosa - Giles Azevedo - Gilberto Carvalho - Alexandre Padilha - Luciano Coutinho (PMDB) - Nelson Jobim (PMDB) - Edison Lobão (PMDB) - Henrique Meirelles (PMDB) - Alexandre Tombini - Ciro Gomes (PSB) - Márcio Fortes (PP) - Blairo Maggi (PR) - Abílio Diniz

Brazil International Ratings in Nov. 2010

1) IMF 7th Economy, GDP $2.2 trillion

2) World Bank – “Doing Business” - 2006, Brazil 119th out of 155 nations - 2010, Brazil 124th out of 183 nations - 2011, Brazil 127th out of 183 nations

3) United Nations – Human Development Index - 74th out of 169 nations (0.699) - could have been worse (0.599) - if inequalities considered - income, education & health - “Women’s Watch” – 80th in gender equality

4) Forbes magazine - “Dilma 16th most powerful person on earth” - after Angela Merkel & Sonia Gandhi

Dilma Rousseff’s Challenges for 2011

1) Infrastructure bottlenecks & logistics - airports, air travel, air cargo currently at the limit in Brazil - private sector via concessions remove Air Force “control” - ocean ports – backlogs & costs - expand capacity via concessions - highways – added costs (“custo Brasil”) - railroads – further expansion - minerals + grain - Caterpillar, locomotive factory - electricity supply - must keep ahead of demand

2) Reform Agenda – 2011 an odd year

- tax/fiscal reform - new federalism pact?? - labor legislation - reduce social overhead costs - currently 103% - social security reform - private sector INSS - review of public sector - political reform - attempted in 2003, 2007 & 2009 - close PR list - prohibit PR coalitions - threshold clause (1%, 2% or 3%??) - Senator alternates - via sub-lists? - campaign finance?

3) Education - upgrade, enhance & expand - universities & technical schools - quality performance primary/secondary - not just quantity bad rating on HDI

4) Relations with States - resurrect CPMF as CSS - restructure state debts - established in 1997/1998 - IGP-DI + 6%

SP tries to lead (destabilize Dilma)

5) Control of federal expenditures - extreme pressures on transition some R$180 billion extra?

6) Eradicate misery & poverty - bolsa família - upward social mobility - GDP growth new jobs - link school and job training

7) Basic sanitation quality of life - water & sewerage

8) Regulate pre-salt petroleum exploration - which management model? - stronger State control? channel profits to development - avoid the “curse of petroleum”

9) Reaction to global “FX warfare” G-20 in Seoul - undervalued US dollars flood Brazil

- Brazil might run trade deficit in 2011 monetary/fiscal policies - reduce debt/GDP ratio, 42% 30% - reduce Selic rate (7% or 8%)?? - new Central Bank president? - reduce federal expenditures - heavier tax on US dollar inflow Allow Real to “float up” to R$1,80 FX rate

10) Industrial policy for key sectors - promote technological innovation

- sustained development