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Brazil’s Rousseff sworn in for second term, pledges austerity

Along with rebuilding the economy, Rousseff must tackle a graft scandal at the state-owned Petrobras oil company

Brazil's President Dilma Rousseff was sworn into her second term in office Thursday, confronting a moribund economy, less congressional support for her ruling coalition and an expanding kickback scandal at the state-run oil company.

Her surprisingly narrow October election and the weakening of her ruling coalition among lawmakers will make it more difficult for her to tackle the challenges, experts said. Some also said she will have to change her rigid management style and seek compromise.

But in a 40-minute inaugural speech before congress, Rousseff sharply defended her record, noted the great strides Brazil has made in social inclusion with her government programs and said she's ready to fight graft and end impunity for the rich and powerful.

"The Brazilian people want even more transparency and more combat against all types of crimes, especially corruption," she said. "And they want the arm of justice to reach everyone equally. I'm not afraid to face these challenges."

Roussef also pledged to rein in public spending to allow the economy to grow again at a minimum cost to the population.

"We will prove that it is possible to make economic adjustments without revoking rights or betraying past commitments," Rousseff said as she was sworn in for her second four-year term as Brazil's president.

"More than anybody, I know Brazil needs to resume growth. The first steps of this journey are an overhaul of the public accounts, increasing domestic savings, beefing up investments and improving productivity."

Since her re-election in October, Rousseff, 67, has signaled she would move away from the leftist, interventionist policies that have scared investors and dragged down Brazil's once-booming economy.

Thiago Aragao, a political analyst for the Brasilia-based Arko Advice consulting firm, said Rousseff needs to "solve the economy by stimulating growth, fiscal responsibility and domestic and international credibility."

The scandal at the Petrobras oil company "is the most tricky" problem Roussff faces, Aragao said, "because it's not over yet and we don't know the range of destruction it could cause."

The alleged graft scheme that could be the biggest yet uncovered in Brazil's history, and it complicates what Aragao said is the president's third big problem: keeping support among her base in congress.

An ongoing federal investigation into the alleged kickback scheme has already resulted in charges against 39 people, many top executives from Brazil's biggest construction and engineering firms, and it is expected to implicate dozens of politicians, many from the ruling coalition, by the end of February, according to Brazil's attorney general.

Providence, Rhode Island — a Petrobras investor — on Dec. 27 filed a U.S. class action lawsuit against the company, claiming it misstated bond values.

Rousseff's challenges aside, inauguration marks the seventh consecutive time a directly elected Brazilian president has started a term in office, something that hasn't happened in Latin America's biggest nation in nearly a century.

Al Jazeera and wire services

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