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Montevideo, February 20th 2019 - 11:36 UTC
Brazilian jailed former president Luiz Inacio Lula da Silva pledged on Friday to block or undo privatizations if he is returned to the office he held from 2003 to 2010. Read full article
Lula pledges to block or undo privatizations if returned to office.
No surprise. The PT has always favored nationalization of just about everything....and against all good economic sense, that says not to.
To cut a long story short, today there are 144 federal state-run companies employing over 501,000. 18 of these companies have never produced a profit (such as ELP, a company created by Dilma to implement the high-velocity trains for the World Cup...the project has long been scrubbed, but the company still exists, and in 2017 cost the taxpayer R$74 million, for its employees to do nothing). The number of employees in these 18 companies jumped from 37,900 in 2000, to a current 75,000, and in last 10 years have cost the taxpayer R$ 18 billion. And the cost increases 10% per year, while 67% refers to payroll….an average of R$ 14,500/month/employee, or 14.5 times the minimum wage, and way above the nat’l average…and padded with benefits not available to the private sector.
If the companies were strategic - like Embrapa - a research company producing useful know-how for the agribusiness, good and well. Experts are unanimous in that there's no more room for this kind of waste in Bzl….social security deficit in 2018 estimated at R$ 190 billion ; most of these companies, created to present projects to generate investment - which they haven’t - produce a yearly deficit of 33 billion, 2 times the govt’s total productive investments, which have been cut from 60 billion 5 years ago, to a mere 17 billion. Whenever the issue of privatizing, or shutting them down, arises, Congress refuses to debate the matter. They use the complex example of Petrobras (alleging nat’l security), then generalize ; the only motive behind this is their reluctance to shut down jobs where they can squeeze in their cronies. Is this what Brazil wants for the future , more waste and privileges for those in government, at the expense of the population ? Brazil may not, but Lula does.
... in 2017 cost the taxpayer R$74 million, for its employees to do nothing.. and on who's watch is this happening?
During that period the banks made huge profits, unmatched I believe in any other country.
The very modest income tax laws applying to those whose income was derived from self employment or investments remained unaltered.
They use the complex example of Petrobras ... Is bit of sacred cow for Brazil?
So other than attempting to provide some substance for those that were marginalised, and somewhat unwise ventures into the market. By comparison to similar governments in Europe they were rather modest in their political forays.
The bottom line being in MHO that governance is an art and not a science as marxists would claim. That there is no permanent political success in doctrinaire policies, be they liberal or conservative.
“... in 2017 cost the taxpayer R$74 million, for its employees to do nothing..” and on who's watch is this happening?”
Glad you asked...EPL was created by Decree Law, in December 2012 - so, under Dilma's watch. Becoming useless after the HVT project was scrubbed, she should have shut it down....but being a source of high salaries for political cronies, Congress refuses approve the shut down, or the sale of useless State-run companies.
I fully agree thar banks in Brazil make absurd profits / pay relatively insignificant income tax....a problem which started decades ago and which should have addressed ...no president or Congress really even tried to moralize the situation, as government relies on bank loans...
Yes, PB, is a sacred cow in Brazil - but only to the politicians and to the unions, because of the political indications (which lead to corruption) and the absurd number of employees it has (defended by the unions), compared ANY other similar sized oil company
Their feeble excuse is national security...but that boat has sailed long ago.
Agree governance is also part art, and cannot just follow rigid rules...every situation requires a unique approach.
”in 2017 cost the taxpayer R$74 million... on who's watch is this happening?”
So Dilma was impeached on Aug 31, 2016 so costs in 2017 are not attributable to her are they?
It is notorious that to shut-down or privatize a state company in Brazil is virtually impossible.....so, not that I think Temer is doing a particularly good job, but he alone does not have the power to shut it (and others) down.....While I never said 'current' costs are 'attributable' to Dilma, it definitely IS her fault that company exists. Closing the company depends on Congress, which is going to fight against any measure that goes against their (or their cronies) personal interests.....presume you've been following the difficulty Temer is having to try to sell off Eletrobras (in parts).....a holding company created years ago and which controls all the regional hydroelectric electric and thermal power plants...the politicians from the various regions get together to form alliances to block the privatization attempts, even if the company carries on costing the taxpayer billions per year, for an unreliable power supply. Their personal interests are more important than the well-being of the taxpayer.
Even Lewandowski (STF judge and declared 'petista'), conceded an injunction to block the auctions - even though this is not exactly a matter that has to do with the functions of the STF - which should only get involved in disputes related to the Constitution.
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