Presidential economists differ on the role of the state in the economy

Economists linked to presidential campaigns defended this Tuesday (15) the resumption of public investment in the country, but they differed on priorities and the breadth of the role that the State should play in the economy.

Advisors from left-wing parties defended the recovery of the BNDES’ (National Economic and Social Development Bank) financing capacity and the performance of state-owned companies, such as Petrobras and Eletrobrás.

But all emphasized the need to seek partnerships with the private sector and international organizations, as well as precautions to avoid encouraging projects that are economically unfeasible, or whose costs outweigh the potential benefits.

The debate was organized by the Brazilian Development Association, which represents public banks and regional development agencies, and presented an action plan for the next government to the pre-candidates for the Presidency of the Republic.

The entity’s proposal suggests priority for areas that promote sustainable development, such as digital inclusion, new businesses in the Amazon, clean energy, basic sanitation and public health.

Economist Guilherme Mello, coordinator of the group of economists that advises the campaign of former president Luiz Inácio Lula da Silva (PT), said that the State must play a central role in financing investments.

“We cannot fall into Manicheism,” said Mello, who is a professor at Unicamp (State University of Campinas). “The size of the challenge that lies ahead will require complementary public and private sector contributions.”

​Nelson Marconi, a professor at FGV (Fundação Getúlio Vargas) who advises the campaign of Ciro Gomes (PDT), said that the BNDES will need to “recover the role of financier of large investment initiatives”.

The official bank, which swelled during the PT governments with contributions from the National Treasury, has shrunk in recent years, when it returned a good part of the funds received to the government and reduced its participation in investments.

Zeina Latif, a member of the team that advises Governor João Doria (PSDB), defended careful studies to choose projects worthy of government support. “You have to define where it’s really worth getting into,” she said.

Mello suggested reorienting Petrobras’ strategy towards the development of clean energy sources to replace fossil fuels. “If we have an instrument capable of inducing and coordinating investments, that’s what it needs to do,” he said.

Former governor Germano Rigotto (RS), who represented Senator Simone Tebet (MDB-MS) in the debate, defended the development of partnerships with the private sector to attract funding from multilateral organizations.

President Jair Bolsonaro (PL), who will run for reelection, did not send representatives to the debate. But the president of BNDES, Gustavo Montezano, opened the event and defended the adjustments promoted in the institution in recent years and criticized the “exacerbated subsidy we had in the past”.

Former Central Bank president Affonso Celso Pastore, who advises the presidential campaign of former judge Sergio Moro (Podemos), canceled his participation in the debate at the last minute.