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imageBRASILIA: Brazilian President Dilma Rousseff kicked off a second term Thursday, vowing to tackle corruption and revamp the economy as her government reels from a series of setbacks.

Brazil's economy, once booming, has barely grown during Rousseff's time in office, and her administration is embroiled in a multimillion-dollar graft scandal at state-owned oil giant Petrobras.

But the former guerrilla promised to face the scandal head on, vowing to punish anyone found guilty of illicit dealings.

"We are going to rigorously investigate everything that has happened," the leftist Rousseff said, speaking at the ceremony attended by the US and Chinese vice presidents as well as 13 heads of state, most from Latin America.

"We must investigate and punish, but without weakening Petrobras or diminishing its importance," she added, drawing warm applause at the ceremony at Brazil's Congress.

Rousseff won October's hard-fought election thanks to voters reliant on the extensive social welfare programs put in place a decade ago by her Workers Party predecessor Luiz Inacio Lula da Silva.

The Petrobras scandal and the ongoing police investigation -- dubbed "Operation Car Wash" -- erupted just a few months before the election.

So far suspicion has fallen on 39 people, including former Petrobras directors and executives from construction firms, a network that allegedly laundered around $3.8 billion creamed off from inflated contracts to give kickbacks to mainly pro-government politicians.

Petrobras is also facing legal action in the United States over investor losses emanating from the scandal that has seen the firm's stock plunge, and hit its creditworthiness and ambitious investment plans.

The scandal -- and poor economic performance -- sparked mass street demonstrations during Rousseff's first term.

Copyright AFP (Agence France-Presse), 2014

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