Russia's President Vladimir Putin (R), Brazil's President Dilma Rousseff (L) and FIFA President Sepp Blatter take part in the official hand over ceremony for the 2018 World Cup scheduled to take place in Russia, in Rio de Janeiro July 13, 2014.
Russia's President Vladimir Putin (R), Brazil's President Dilma Rousseff (L) and FIFA President Sepp Blatter take part in the official hand over ceremony for the 2018 World Cup scheduled to take place in Russia, in Rio de Janeiro July 13, 2014. REUTERS/Alexey Nikolsky/RIA Novosti/Kremlin (BRAZIL - Tags: SPORT SOCCER WORLD CUP POLITICS) ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY. REUTERS IS UNABLE TO INDEPENDENTLY VERIFY THE AUTHENTICITY, CONTENT, LOCATION OR DATE OF THIS IMAGE. FOR EDITORIAL USE ONLY. NOT FOR SALE FOR MARKETING OR ADVERTISING CAMPAIGNS. NO SALES. NO ARCHIVES. FOR EDITORIAL USE ONLY. NOT FOR SALE FOR MARKETING OR ADVERTISING CAMPAIGNS. THIS PICTURE IS DISTRIBUTED EXACTLY AS RECEIVED BY REUTERS, AS A SERVICE TO CLIENTS Reuters

The presidential election in Brazil threw up a real surprise last Sunday, when its reigning president Ms. Dilma Rousseff won the election with a narrow margin, braving the nay-sayers and reigning anti-incumbency sentiments among the electorate. Rousseff was feeling the heat of a sluggish economy. The slim margin for her second term indeed affirmed the popular sentiment for a change. But Rousseff won the race with 51.6 percent of the votes.

Strength of Welfare

Political observers believe that Roussef was able to scrape through despite the big challenge offered by pro-business rival Aecio Nevis, because of the support of 40 percent of Brazil's 200 million people, who are living in households with monthly earnings less than $700 a month. Rousseff, with her 3-point agenda was also assisted by the track record of her Workers Party', which has made gains in the fight against inequality and poverty, ever since it first came to power in 2003, reports Reuters.

The Workers Party was able to translate Brazil's commodity-fueled prosperity in the last decade into socially useful welfare programs and lifted more than 40 million people from the pangs of poverty. That section continues to be the backbone of Rousseff's support.

Challenge of Promises

Now voted back to power, Rousseff faces the challenge of delivering on her campaign promises that include expanding social benefits that too without straining the federal budget. "The challenging economic environment is needing drastic policy adjustments to address some of the macroeconomic imbalances that have emerged," commented Shelly Shetty, Fitch's senior director for Latin America. Many believe that Rousseff's welfarism will be toned down by the harsh economic realities and there will be a change in attitude to the business sector.

Signals Of Change

Speaking to a crowd of supporters, soon after the victory, Dilma Rousseff herself acknowledged that there was a call for change and remarked, "I know I am being sent back to the presidency to make the big changes that Brazilian society demands. That is why I want to be a much better president than I have been until now."

In the first term, Rousseff's delivered gains to millions of Brazilians by way of record low unemployment rates and generous social welfare programmes. On the flipside, there was falling economic growth, rising budget deficit, crashing investments and soaring inflation that went beyond 6.5 percent, reported New York Times. Now the eyes are on Ms. Rousseff whether she can restore business and investor confidence and revive the Brazilian economy, which is Latin America's largest.