Panel SA: Instead of anticipating second round, society wants alternatives, says businessman

While pressure grows for a useful vote for Lula or Bolsonaro in the first round, one of the biggest enthusiasts of the third way in business, Pedro Wongtschowski, chairman of the board of Ultrapar, still insists.

“Society’s interest is to have alternatives. And, obviously, what is implied is dissatisfaction with these two”, he says.

Wongtschowski, who along with two other important representatives of the private sector, Pedro Passos and Horácio Lafer Piva, has been expressing concern about the future of the country, says that he sees in the business community a fear of the resistance of Brazilian institutions.

For the businessman, who, among the other chairs he holds, also presides over the advisory board of Anpei (an association for research and development of innovative companies), it is necessary to create conditions to value knowledge, if the country wants a society with more innovation.

“A business sector that does not make a profit is bad for society. When a company is doing badly financially, it reduces these investments because its concern is short-term survival. As a result, it becomes less competitive and invests even less in innovation. It’s a vicious cycle,” he says.

How do you assess the position of the industry today? Brazil is in 57th place in the global innovation index. Is bad. An economy the size of Brazil, which is among the 15 largest in the world, is sophisticated, has relevant, modern industrial activity, a technologically updated agricultural activity, a sophisticated financial sector and a well-formed academy.

If we have all this, why is Brazil in 57th? It is an indication that Brazil’s innovation is insufficient and inadequate. What is the innovation driver? It is in the economic interest of the business sector. It is the pursuit of the company’s long-term profitability and survival.

Many people think that innovation has to be done at the university. The university develops science, processes, but they only turn into innovation when they reach the market. And it comes in two ways: through the business sector or through the government. For example, Ceará’s public security evolved because they used artificial intelligence and brought science to public security. This goes for sanitation, agriculture, treatment of drug addicts.

The public sector improves the quality of the services it provides when it incorporates knowledge and science into the decision-making process. If you want a more innovative society, you have to create the conditions for companies and governments to value knowledge.

That costs money, doesn’t it? cost So first, the business sector needs to be profitable. A non-profit business sector is bad for society. When a company is doing poorly financially, it reduces these investments because its concern is short-term survival. As a result, it becomes less competitive and invests even less in innovation. It’s a vicious cycle.

Those who don’t have to worry about the next day can worry about the medium and long term, which means investing in research, development and innovation. The virtuous circle is when the company is profitable and investing. With this, it improves its market position, reduces costs, increases its profitability, raises even more investment, gives opportunities to its professionals, trains more people, creates new products and so on.

With governments it is more or less the same thing. It improves public policy and reduces cost. As a result, there is more money left over for more investment, more innovation and enters the virtuous cycle.

What does it require? On the government side, rationality, logic, appreciation of knowledge. And from the business sector, a favorable business environment, trade opening, access to knowledge from Brazil and abroad, fair competition.

One of the major problems of the business sector in Brazil is informality. And unfair competition, which exists as long as you pay tax, follow the rules, and your competitor doesn’t. This creates a competitive asymmetry that undermines companies’ profitability and, therefore, innovation. When we say that tax reform is important, there are several reasons.

Tax cuts, as seen recently in the IPI, also conflict with the Free Zone. How to untie these knots? Free Zone is a complicated issue. For the most part, not all, it is something extremely artificial, which does not stand without subsidy. If this subsidy is money well spent, I don’t think so.

Now, there are a million people employed there, so you need to create an alternative program. You have to get into the bioeconomy, you have to do something that has to do with the Amazon. A development that is not a livestock line that implies widespread deforestation.

You have to face that the Free Zone has to change. It has to become something intrinsically competitive and linked to the factors of production that exist in the Amazon. It is a pharmaceutical, herbal and food industry, there will have to be public investment to transform the Free Zone park into something that has to do with the region.

A more focused path also depends on the evolution of sustainable development. In a government like the current one, what would that be like? I write with Pedro and Horacio a series of articles. In one of them, we talk about the industry of the future in Brazil. We talk especially about the two great challenges of the Brazilian industry, which are digitization and decarbonization.

About the election year, how has the business community seen this? And you, who has always been one of the main enthusiasts of the third way? What we have been fighting, a lot of people especially from the business sector, is the importance of Brazilians having alternatives. It is unreasonable that we have only two or three alternative candidates, programs, visions for Brazil. More is needed.

The expectation is that the final result will at least be influenced by alternative visions for Brazil. So, having multiple candidacies, programs, substantive debates about Brazil’s paths is a very important thing for everyone, for every Brazilian citizen. Why does an election have two rounds? In the first round, you vote for whoever you think is best. In the second, vote against who you think is worse. That’s the logic.

They’re trying to move the second round to the first. It’s wrong. Who is trying to anticipate? The two, in quotes, main candidates, have an interest in anticipating this process to eliminate alternatives. Society’s interest is to have alternatives. And obviously what is implied is dissatisfaction with these two.

Regarding the escalation of threats to institutions, is there an assessment in the business community that this is a risk or does the opinion prevail that it is Bolsonaro’s talk to the fans? What is the degree of concern? Entrepreneurs are not all the same. That said, there is a great deal of concern with the institutions because clearly the current president is stressing. At the moment when he questions the health of the electoral process, he insists on arming the population, he approaches the state military police, he threatens the STF, these are all very worrying signs. In other countries these movements preceded authoritarian developments. So, yes, there is a concern with the resistance of Brazilian institutions.

Is there any movement being prepared in defense of democracy like last year? Everyone is ready to do it if we deem it necessary, a kind of permanent assembly. We are following the facts, very carefully what will happen in the coming days with these parties, MDB, PSDB, Citizenship, União Brasil, PSD, how they will position themselves.

It is likely that at some point there will be some kind of collective manifestation in the direction of valuing democracy, signaling that there is a large group of Brazilians who value, above all, the continuity of a democratic regime.

With your knowledge of the fuel sector, how do you see a solution to prices? For me, it is clear that it is not a solution to try to control fuel prices and try to destroy the concept of international parity of fuel products in Brazil. I think it’s inexorable, inevitable. First, because Petrobras is a market company, even though the majority of voting capital belongs to the Union. And second, because Brazil is deficient in fuel, as a result, structurally, we have to import part. Production is insufficient to meet all national demand. This automatically creates a link between the Brazilian and international markets.

Now, this does not mean that the government cannot correct specific situations with compensatory measures, with explicit subsidies financed by the Treasury. It has done this in the past and it is perfectly reasonable that it should do it again for specific segments, for truck drivers, for LPG for the low-income population.

For the rest, it’s following the laws of the market and that price will go down at some point. The price of oil and fuel tends to decline a little over time. I think that from now on the situation will tend to a certain normality and the government can, if it deems it pertinent, intervene to find localized solutions. It can change the tax system, it can reduce taxes on fuel, which in Brazil have a very high value. It has a series of measures.

X-ray

He became a director of Ultrapar in 1985, was CEO of the company between 2007 and 2012 and is currently chairman of the board of directors. He is president of the superior council of Anpei (National Association for Research and Development of Innovative Companies) and of the superior council of Innovation and Competitiveness of Fiesp. He is a chemical engineer, with a master’s and doctorate from USP.