University of São Paulo: Dissatisfaction with the economy may explain growth in the number of privatization supporters
In the last 43 years, 32 Brazilian state-owned companies were privatized and four were granted to the private sector, according to a study carried out by the Federal Senate. And, in a recent survey, Datafolha found that, in 2017, about 20% of the Brazilian population was in favor of privatizations, however, in the last six years, this number has practically doubled, reaching 38% in the last survey, carried out in April of this year. year.
According to Rubens Beçak, professor at USP’s Faculty of Law of Ribeirão Preto (FDRP), one of the possible reasons for this increase in a short time is the population’s dissatisfaction with the economic moment. “What happens is that there is great dissatisfaction with the socioeconomic situation in the country, the crisis, inflation, high interest rates, all of this generates a strong malaise in society.”
Luciano Nakabashi, a professor at the School of Economics, Administration and Accounting of Ribeirão Preto (FEA-RP), at USP, believes that another potential reason for the increase in adherence to privatizations is the inefficiency of some state-owned companies due, in most cases, to a lack of competitiveness and competition. “State companies end up being more inefficient due to the lack of strong competition or the lack of competitiveness, as the government is always injecting money.”
Privatization procedures
Despite society being more open to privatizations, Beçak explains that this procedure cannot, and should not, be done overnight, but based on the regulations created for this procedure. “We have a law from the Collor era that sought to create a regiment for these privatizations, Law No. 8031/91, which institutes the National Privatization Program to organize the role of the State in the economy.”
Brazil also has Law No. 8666 of 1993, which determines, in Article 17, how the public good will be transferred to the private entity, that is, it stipulates under what circumstances this privatization or concession will be carried out.
Brazil against the world
Despite the increase in the population in favor of privatizations in the country, according to a survey published by the Transnacional Institute (TNI), in recent years more than 1,400 services were created by governments or renationalized around the world. Countries such as Germany (411 cases), the United States (230 cases) and France (156 cases) lead the list, whose main target is water service and telecommunications companies.
In Brazil, by April 2023, the Lula government has already discontinued the privatization process of at least four large state-owned companies, such as Correios, Petrobras, Empresa Brasil de Comunicação (EBC) and the Federal Data Processing Service (Serpro). .
However, between the growing desire of Brazilians for privatizations and the increase of nationalizations around the world, Beçak affirms that the best path is the balance between these two models. “The two extremes are not desirable, it is important that there is regulation by the State, but it is important to understand that there are areas in which the market can take care of more effectively.”