Leftist president narrowly wins re-election after divisive race

Leftist President Dilma Rousseff vowed to reconcile Brazil, reboot the economy and fight corruption after narrowly winning re-election on Sunday in the most divisive race since the return to democracy in 1985.

Rousseff, the first woman president of the world's seventh-largest economy, took 51.6 percent of the vote to 48.4 percent for business favorite Aecio Neves in a runoff election.

After a vitriolic campaign that split the country between the poor north and wealthier south, Rousseff crucially picked up enough middle-class votes in the industrialized southeast to cement a fourth straight win for her Workers' Party.

She will start her second four-year term on Jan 1 with a laundry list of challenges: governing a polarized country, winning back the confidence of markets and investors, rebooting the stagnant economy and tackling corruption.

The 66-year-old, a former guerrilla who was jailed and tortured for fighting the 1964-85 dictatorship, called for unity in her victory speech and promised to listen to voters' demands for change.

"This president is open to dialogue. This is the top priority of my second term," she told supporters in Brasilia, the country's capital, clad in white standing beside her two-term predecessor Luiz Inacio Lula da Silva.

Peace and unity

After four years of sluggish economic growth culminating in recession this year, Rousseff acknowledged that her own report card had to improve.

"I want to be a much better president than I have been to date," she said, issuing "a call for peace and unity" after a bitter campaign of low blows and mutual recriminations.

In Sao Paulo, capital of the country's wealthiest state, Neves supporters watched the scene in disgust and chanted "Kick the Workers' Party out!"

Neves, a 54-year-old senator, called Rousseff to congratulate her.

"I told her the priority should be to unite Brazil," he said in Belo Horizonte where he served two terms as governor of Minas Gerais state.

The race was widely seen as a referendum on 12 years of Workers' Party government, with voters weighing the party's social gains against Neves's promise of economic revival.

The Workers' Party endeared itself to the masses with landmark social programs that have lifted 40 million Brazilians from poverty, increased wages and brought unemployment to a record-low 4.9 percent.

But the outlook has darkened since Rousseff won election in 2010, the year economic growth peaked at 7.5 percent.

She has presided over rising inflation and a recession this year, amid protests over corruption and record spending on the World Cup.

Analysts said she will face steep challenges over the next four years.

"Dilma's narrow victory sets up a major challenge: She has to unite a Brazil split in two by tremendous animosity," said political analyst Daniel Barcelos Vargas of the Getulio Vargas Foundation.

"Brazilians won't tolerate corruption anymore and want more public services and economic growth."

Rousseff has been hit hard by corruption scandals, notably a multi-billion-dollar embezzlement scheme implicating dozens of politicians - mainly her allies - at state-owned oil giant Petrobras.

AFP - Reuters - AP