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          Global General

          Rousseff faces runoff in Brazil election

          (Agencies)
          Updated: 2010-10-04 09:32
          Large Medium Small

          Rousseff faces runoff in Brazil election

          Brazil's President Luiz Inacio Lula da Silva waves to the crowd after voting in general elections in Sao Bernardo do Campo October 3, 2010.[Photo/Agencies]

          ROUSSEFF STILL SEEN WINNING RUNOFF

          Serra, one of Brazil's most experienced politicians, now has an extra four weeks to chip away at Rousseff's lead. Still, political analysts say a major scandal involving Rousseff directly would be virtually the only scenario under which she could lose a runoff.

          Lula will spend the coming weeks touting his accomplishments -- including 20 million people lifted out of poverty since 2003 -- and telling voters that Rousseff is the best candidate for the job.

          Runoffs are common in Brazil -- Lula faced them in 2002 and 2006, and emerged with a strong mandate in both cases -- and Rousseff is expected to take victory.

          "This is an electoral climate that favors the incumbent party," political analyst Luiz Piva said. "Brazilians are generally very happy with their government."

          Investors have been happy too. Brazil's stock market, bonds and currency have all remained strong in the run-up to the vote -- a marked contrast to the panic that preceded the 2002 election of Lula, a former radical.

          Under Lula's mix of social welfare policies and generally investor-friendly economic management, Brazil has witnessed the rapid growth of a middle class that is snapping up cars, houses and other goods in record numbers.

          The country has also joined Russia, India and China in the "BRIC" group of emerging powers that are gaining in influence, especially as more developed economies have stagnated.

          Rousseff, a career civil servant who had never run for elected office, has vowed to focus on improving Brazil's woeful infrastructure -- especially as the country prepares to host the World Cup in 2014 and the Olympics in 2016.

          She has become more pragmatic over time since spending nearly three years in jail in the 1970s for her militancy against the dictatorship of that era. Some investors fear she could govern to the left of Lula, although Rousseff's advisers have told Reuters she is unlikely to lead a major expansion of the state apart from in some strategic areas such as the energy sector.

          The extension of the campaign marks a new lease on life for Serra, an accomplished former health minister who ran a lackluster campaign until mustering just enough support in the final days to force the runoff.

          Serra, 68, has vowed to run a centrist, pro-business government. Yet he also believes in a strong state presence in some sectors, and his administration would likely be broadly similar in practice to Rousseff's.

          Sunday also saw voting for local and regional races throughout Brazil that will determine the makeup of Congress. Rousseff's 10-party coalition was expected to win a clear majority. The winner of the runoff for president will take office on January 1.

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