Reuters/Brasilia

Brazil’s President Dilma Rousseff is nearly moved to tears during her inaugural speech as successor to Luiz Inacio Lula da Silva, in Congress in Brasilia yesterday. Rousseff is the first woman to become Brazil’s president, taking the reins of an emerging giant with a booming economy, vast new oil reserves and growing international diplomatic clout

Dilma Rousseff became Brazil’s first female president yesterday after promising to build on an unprecedented run of economic success achieved by her popular predecessor and mentor, Luiz Inacio Lula da Silva.

Thousands of admirers braved a driving rain and cheered as Rousseff rode to her inauguration in a 1953 Rolls Royce flanked by an all-female security detail.

The former Marxist guerrilla, who evolved over the years into a pragmatic civil servant with a professed obsession for reducing poverty, smiled broadly and clapped along with spectators as she was sworn in before the Congress.

“Many things have improved in Brazil, but this is just the beginning of a new era,” Rousseff, wearing an all-white suit, told Congress. “My promise is ... to honour women, to protect the most fragile, and to govern for all.”

Rousseff, 63, inherits a booming economy that would make most of the rest of the world green with envy.

More than 20mn Brazilians were lifted out of poverty during Lula’s eight years in office, thanks largely to his social welfare policies and stable economic management that made Brazil a darling among Wall Street investors.

The coming decade also looks bright, with massive, newly discovered offshore oil reserves due to be exploited and the World Cup and Olympics to be hosted here.

Yet Rousseff also faces a long list of daunting challenges that Lula failed to tackle, including an overvalued currency that is hurting industry, rampant public spending that is fueling inflation, and notorious bureaucracy that stifles investment and discourages innovation.

Perhaps the biggest task will be living up to the example set by Lula, a former metalworkers’ union leader who leaves office with an approval rating of 87% and near folk-hero status - especially among the poor.

“I’m here to thank Lula for all he’s done. If Dilma can do half of that I’ll be happy,” said Izabel Rosales Figuereido, who travelled from the western state of Mato Grosso do Sul to attend Rousseff’s inauguration.

Lula essentially hand-picked Rousseff, his former chief of staff, to be his successor. The career civil servant had never run for office before, and she remains a somewhat of a mystery to many Brazilians, but her promise to continue Lula’s policies was enough to get her elected in October by a wide margin.

Rousseff now leads a country that, just four decades ago, persecuted her as an enemy of the state.

The daughter of a Bulgarian immigrant, Rousseff was active in the resistance to Brazil’s 1964-85 dictatorship. She was jailed on subversion charges for three years and tortured by her military captors. Several of her former cellmates were present for her inauguration yesterday.

After democracy returned, Rousseff held a series of mid-level government jobs and acquired a reputation as a shrewd technocrat who is unafraid to call out underlings for shoddy work or incompetence, but often lacks a common touch when dealing with voters.

More recently, she overcame lymphoma in 2009 and she briefly wore a wig as she underwent chemotherapy. Her doctors have given her a clean bill of health.

Rousseff, who appointed an experienced and respected economic team, pledged to maintain the mostly market-friendly policies that helped cement Brazil’s place among the elite BRIC group of fast-growing emerging economies that also includes Russia, India, China and now South Africa.

In her inaugural speech, Rousseff called for reform of Brazil’s onerous and complex tax system and signalled she intends to make that a top priority.

However, Lula also attempted several tax reforms with only limited success and pushing the changes through her 10-party coalition in Congress will be easier said than done.

“The question is whether she has the courage and support to stand up to vested interests,” said Pedro Simon, senator for the PMDB, the largest party in Rousseff’s coalition. “There’s already an army of scoundrels wanting the victory spoiled.”

Given the many pressing demands at home, she is likely to take a lower international profile and avoid courting controversy, like Lula did when he angered Washington with mediation efforts over Iran’s nuclear programme.