Despite Bolsonaro’s complaints, Guedes says he does not sell Petrobras in this term

After President Jair Bolsonaro (PL) indicated his willingness to privatize Petrobras at a time when the rise in fuel prices bothers Planalto, minister Paulo Guedes (Economy) said on Tuesday (7) that the state-owned company will not be sold, “at least in this term”.

“Everyone knows that I am in favor of privatizing all these companies, but the president said: ‘Okay, you can sell Correios, Eletrobras, subsidiaries that are not the core business.’ But Petrobras is not on the privatization list, at least in this first term,” said the minister during an event in English promoted by Eurasia.

Despite this, Guedes defended the sale of the company and signaled the possibility of sharing the funds raised with the neediest families as a “political incentive” for the approval of the privatization, which requires congressional approval.

According to the minister, the government could allocate around 20% of the amount collected to the neediest families, while the other 80% would be used to reduce the Brazilian public debt.

“When it comes to privatization today, politicians say, ‘What do I get that, what do I get politically?’. How about reducing poverty in Brazil, is that a good enough incentive?” he said.

The indication that Petrobras remains in the hands of the government, at least until the end of 2022, comes just over a month after the president publicly complained about not being able to direct the price of fuel, but taking “the blame” for the increase in prices. values.

“I already want to privatize Petrobras, I want to. I’m going to see with the economics team what we can do,” said Bolsonaro in October.

Successive increases in the price of gasoline and diesel fueled inflation and weighed negatively on the president’s popularity, who plans to seek re-election in 2022..

Petrobras’ pricing policy, in turn, follows the international price of a barrel of oil and is also influenced by the dollar, which is also high against an increasingly devalued real.

In late October, rumors that the government was preparing a bill to privatize the company cheered the financial market. Petrobras share prices soared.

The state-owned company formally questioned the government about the existence of these studies.

In early November, Petrobras released a statement to the market informing that both the Ministry of Mines and Energy and the Ministry of Economy denied the existence of any relevant decision in this regard.

Despite the lack of formal studies, Guedes said today that he believed that “public opinion in Brazil is ready” to understand that “the cycle of large state-owned companies is over”.

So far, however, the government has only managed to approve the capitalization of Eletrobras in Congress. Two state-owned companies were created, one to take care of air navigation and the other to concentrate Eletrobras’ nuclear area.

Congress is still discussing the privatization of Correios.

“I’m in favor of privatizing Petrobras. It doesn’t make sense to have a country where the state is very rich, we have R$1 trillion in real estate, another trillion in state-owned companies, R$2 trillion in receivables, a very rich public sector, with a poor population,” he said.

The minister included the sale of Petrobras in the list of measures that would be part of an eventual second term of Bolsonaro, if the president is victorious in the 2022 election.

Another proposal that would be part of the campaign program, according to Guedes, is the creation of a pension fund system, in which workers collect in individual accounts amounts that will fund their pensions in the future.

This type of regime has already been proposed by the economic team, but it ended up being one of the first devices discarded by Congress during the course of the Social Security reform, in 2019.

The minister’s speech indicates that the team intends to insist on the change. “As soon as the president is reelected, if the coalition between liberals and conservatives is renewed, I believe the agenda is very clear. We are going to the second round, with the capitalization scheme for 40 million Brazilians [que estão no mercado informal]”, said Guedes.

The capitalization would be associated with the so-called Carteira Verde e Amarela, a proposal by the government that never came out of the paper, but would allow the hiring of workers by companies at lower charges.

Bolsonaro’s campaign program, according to Guedes, also includes proposals already presented by the government, but which are stuck in Congress. Among them are tax and administrative reforms.

The government submitted two tax alteration projects, one unifying PIS and Cofins and the other modifying the Income Tax rules. Both stalled in Congress due to the lack of consensus around the texts.

The administrative reform, which changes the rules for hiring in the public administration, was sent at the end of 2020, approved by the Chamber’s special committee with changes, but has not yet been voted on in the plenary.

Lira has demanded mobilization of the government for the approval of the administrative reform, whose progress is considered difficult even within the economic team, given the proximity of the elections.