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  HOME | Brazil (Click here for more)

Brazil Accelerates Privatizations

SAO PAULO – Brazil intends to accelerate privatizations in 2020 with the sale of 300 companies worth $36 billion.

The government of Jair Bolsonaro has redoubled its efforts to attract investors willing to bet on the South American country.

Bolsonaro expects to end his term in January 2023 with only 100 assets of the 695 with direct or indirect public participation at the beginning of 2019.

According to data from the Ministry of Privatization and Disinvestment, Brazil sold 71 assets last year, raising 105.4 billion reais (about $25.7 billion), 25 percent more than expected.

By 2020, the government has set an even more “ambitious” goal and will attempt to raise $36 billion, equivalent to 1.7 percent of GDP, with the sale of state power company Eletrobras and the Company of Information Technology and Social Security (Dataprev), among others.

“It is a very ambitious plan ... but now our focus is on privatizations and there is a big job to be done,” Privatization Secretary Salim Mattar told EFE.

The government has ruled out the privatization of the Brazilian State crown jewels – the oil company Petrobras and the Bank of Brazil – and has postponed the same with the Post Office by 2021 due to its “complexity.”

Brazil is looking for investors inside and outside the country and will not put “any type of restriction” on the entry of foreign capital, regardless of its origin, according to Mattar.

Still, in his electoral campaign, Bolsonaro, a firm ally of the United States, expressed his suspicion of China and denounced that the Asian country wanted to “buy Brazil.”

However, the president began to moderate his tone when he came to power and shook hands with the Asian power in search of entrepreneurs willing to buy state-owned companies.

“Capital for us has no color. Any capital will be welcome,” the secretary said.

Brazil attracted the fourth-most foreign investment in the world in 2019, according to the United Nations Conference on Trade and Development (UNCTAD).

The country received $75 billion of direct foreign investment, which represents an increase of 26 percent compared to 2018, driven in part by the privatization program and the government’s efforts to stimulate the economy, according to UNCTAD.

After granting more than 30 assets to the private initiative in 2019, the government now plans to auction another 44 infrastructure projects, including seven roads, six railway lines and about a dozen ports, although there are differences over whether the port of Santos, the largest in South America, will be included in the 2020 list.

There are also 22 airports, including in the tourist city of Foz do Iguaçu (Iguazu Falls) and capital cities such as Curitiba, Goiania, Palmas, Branco River, Porto Velho, Boa Vista and Manaus.

The federal government is not the only one interested in auctioning its assets. Several Brazilian states have initiated a similar plan at regional level, including Sao Paulo, which in early January launched the largest highway concession in the country, with 1,273 kilometers.

 

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