FULL PRIVATIZATION
By Paulo Kliass*
The austericidal policy practiced for several decades in our country by the successive governments that administered the Palácio do Planalto has had disastrous consequences.
This results in the deepening of the living conditions of the majority of the population, whether in economic or social terms.
The perverse combination of a restrictive monetary policy and strict budgetary austerity causes a reduction in the State’s capacity to carry out primary expenditure and an extraordinary increase in financial expenditure with the payment of interest on the public debt.
From the point of view of historical development, one of the most spectacular elements of such conservatism in the conduct of economic policy has been the privatization policy pursued since then.
In fact, privatization processes are characterized by a wide range of modalities aimed at increasing the participation of private capital in the sphere that belonged to the state, for example in the provision of public goods and services in general.
Thus, the discourse that “concession is not privatization,” for example, is characterized as an attempt at a misleading narrative.
This is a lame excuse from those who struggle to defend the indefensible, namely the fact that under successive Workers’ Party (PT) governments there has been an increase in statistics expressing the increase in the participation of private capital in countless activities traditionally the responsibility of the public sector.
The long privatization process
Privatization processes can range from the most typical forms of complete sale of public assets to private capital to more sophisticated models of transfer of accumulation spaces to the private sector which should be the responsibility of the Brazilian state.
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If we consider these more extreme cases for clarity, we have the sale of 100% of the assets of public companies to private groups, as were the symbolic auctions of Embraer or Companhia Vale do Rio Doce, for example.
The first was sold to the São Paulo Stock Exchange in 1994, while Vale was sold 3 years later to the Rio de Janeiro Stock Exchange.
In both cases, “rotten coins” were used as payment. The bonds were purchased at deeply discounted prices in the secondary financial market and the buyers actually spent amounts much lower than those nominally expressed in the securities accepted by the government at auction.
However, the concept of privatization is broader than that observed in these more symbolic cases of total alienation of public assets for the benefit of private capital.
There are cases of the state selling minority stakes in its companies or processes of increasing the volume of share sales aimed exclusively at private groups.
As a result, the public sector still retains at least 50% of the voting capital in companies, but the privatization process is unequivocal.
It is enough to see the limitations to which Petrobrás must submit in its securities operations after carrying out the operations to launch its shares on the New York Stock Exchange intended for foreign investors. This mechanism was used both by Fernando Henrique Cardoso (FHC) in 1999 and by Lula in 2010.
Concession and PPP are types of privatization
But privatization also includes other less obvious processes of transferring public assets to private capital or increasing their relative participation in sectors marked by state presence. These are concession mechanisms and the Public Private Partnership (PPP).
In both cases, we observe the entry of capital into activities that were previously not highly sought after as a branch of capitalist accumulation.
We can cite here the offers in the fields of education and health, but which have gradually expanded to include social assistance, social security and public security. The federal compact model involves the growing presence of capital in sectors proposed by state and municipal governments.
Other areas in which the intensification of privatization processes has been observed are those that constitute infrastructure. In this case, the institutionality of the federal government machine has become more sophisticated, through the “Investment Partnership Program” (PPI), created in 2016 by Law 13,334, launched during the coupachment against Dilma Roussef.
According to the program’s website, it aims to “aim to expand and strengthen interaction between the state and the private sector through the signing of partnership contracts and other privatization measures.“.
According to official data, 283 projects have already been carried out under the PPI, with a strong concentration in the areas of transport, energy and urban infrastructure.
In addition, 223 other projects are still underway, with a greater concentration in the areas of transport, urban infrastructure and the environment.
Thus, to date, 506 projects have been registered under the Federal Government’s PPP program, including a wide range of areas, branches and sectors in which private capital is expected to occupy spaces to expand its accumulation process.
There is a concentration in 3 areas which represent almost 3/4 of the total: i) transport with 46%; ii) urban infrastructure with 15%; and iii) energy with 13%.
Furthermore, the existence of projects involving the prison sector and the river sector attracts attention within the “Others” cluster. The first case concerns the privatization of prisons, notably through PPP, for the municipality of Erechim in Rio Grande do Sul and the municipality of Blumenau in the Santa Catarina region.
On the other hand, the The PPI Council also approved the inclusion of important waterway systems in the Amazon to be subject to privatization. These are projects involving the Madeira, Tocantins and Tapajós rivers..
In addition to the projects mentioned above, an attempt is also underway to privatize the urban train and metro systems in the metropolitan regions of Porto Alegre and Recife, both owned by the federal government through the CBTU and Trensurb.
Despite Lula’s promises during the 2022 campaign that he would not continue Temer and Bolsonaro’s privatization attempts, the processes of transferring the aforementioned state-owned companies to private capital continue their course.
The federal government maintains a similar position regarding the privatization of public sanitation companies, including Agepisa in Piauí, Compesa in Pernambuco and Sabesp in São Paulo. In all of the above cases, BNDES actively participated in the process of transferring public enterprises to the private sector.
Ultimately, what we can see is that the privatization processes continue at full speed in our country, even under Lula’s third mandate.
If the current cases do not involve the catastrophic symbolism of the absolute and definitive alienation of public goods for the benefit of private capital in auctions at the headquarters of the stock exchange, the fact is that we are facing one of the largest processes of transfer of public goods to private sector entrepreneurs.
*Paulo Kliass He holds a doctorate in economics and is a member of the federal government’s specialists in public policy and government management.
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