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Brazil Vote Highlights a Rift Linked to Economics – New York Times

Brazil Vote Highlights a Rift Linked to Economics – New York Times

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RIO DE JANEIRO — One politician took to Twitter to circulate a map of Brazil with a barrier separating the relatively prosperous south from President Dilma Rousseff’s support in the poorer north — along the lines of the Berlin Wall.

During the bitter presidential race that led to her re-election on Sunday, Ms. Rousseff’s predecessor mocked the main challenger by calling him the “candidate of the bankers.”

Even as Ms. Rousseff’s supporters celebrated her victory, the divisions gripping Brazil came into sharp relief Monday. Large banks and hedge funds expressed their distrust of the president with a sell-off, pushing down Brazil’s main stock index by 3.7 percent and clipping the currency by 2.7 percent.

“We’re emerging from an election that has revealed a rift between economic classes,” said Murillo de Aragão, the president of Arko Advice, a political consulting firm in Brasília. “The level of tension is remarkably high, accentuating a loss of confidence in the president among big economic interests.”

In the final vote tally, Ms. Rousseff took 51.64 percent, against 48.36 percent for her rival, Aécio Neves, a scion of a political family from the state of Minas Gerais. It was the smallest margin of victory in any presidential election since democracy was re-established in the 1980s after two decades of military rule.

Ms. Rousseff, 66, a former Marxist guerrilla who rose to prominence as a top aide to Luiz Inácio Lula da Silva, the president from 2003 to 2010, seemed to signal in her victory speech that changes were needed to calm a nation unnerved by the campaigning, which involved comparisons on both sides to Nazis and heated accusations of corruption. “In mature democracies, unity does not mean monolithic action,” Ms. Rousseff told supporters in Brasília on Sunday night. “I want to be a better president than I’ve been until now.”

While some in Brazil’s middle and upper classes might wish otherwise, few changes are expected in the popular antipoverty programs that have shielded poorer Brazilians from an economic slowdown, with the unemployment rate remaining low even as the economy went into recession this year.

But Ms. Rousseff has signaled other changes, including the appointment of a new finance minister. That could open the way for a shift away from policies that have created ire in Brazil’s business establishment, like price controls on fuel in a bid to keep inflation from accelerating.

In addition to the class tension, the election also exposed geographic fissures, reflected by the strong showing of the centrist challenger Mr. Neves in São Paulo and states in southern Brazil, compared with Ms. Rousseff’s sweep of states in the north and northeast, where recipients of social welfare programs broadly backed the incumbent.

“Power was always in São Paulo in the south, but when the” governing party “started sending resources north to help us, many in the south simply didn’t accept it,” said Saron Zacarias, 51, a refrigeration technician from Fortaleza, in the northeast. “Now this division is clear again, like there are two parts to Brazil.”

Attempts to link Mr. Neves with the moneyed elite — Mr. da Silva also called him a “daddy’s boy” — may have resonated with some voters.

But Ms. Rousseff “will now have to look beyond the class struggle rhetoric of her campaign and show whether she can regain the trust of the south and southeast,” Tony Volpon, an analyst at Nomura Securities, said in a research note.

While some in Brazil’s financial markets are fuming over the sluggish economy, others expressed optimism about Ms. Rousseff’s new term on Monday. Executives at two of Brazil’s largest banks, Itaú and Bradesco, issued statements lauding her for saying she was open to dialogue.

A major test will lie in how Ms. Rousseff handles a scandal over a huge bribery scheme at Petrobras, the state-controlled oil company, in which a former executive has testified about channeling bribes to her Workers Party. She has already acknowledged wrongdoing at the oil giant, which remains an anchor of her vision for guiding Brazil’s economic development.

Some voters are warily following her vow to fight corruption in her own government. “They don’t punish; they are just corrupt,” said Maurice Vianna, 42, the manager of a shoe-repair shop in Brasília, referring to the Workers Party. “For me it is a criminal organization.”

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