Brazil Announces PAC 2

By Mira Olson, Contributing Reporter

RIO DE JANEIRO – On March 29th the Brazilian government announced a new Growth Acceleration Program (PAC 2) that will provide R$1.59 trillion (US$880 billion) in infrastructure and public projects as the second phase of the economic stimulus program targeting areas of high social sensitivity such as housing and health. Of that total, R$958 billion will be invested between 2011 and 2014.

President Lula at the PAC 2 Launch Ceremony, photo by Antônio Cruz/ABr.

Much controversy has arisen regarding the necessity and the true objectives of PAC 2, given that the original Growth Acceleration Program was implemented in 2008, and still only fifty percent of the program has been completed. In response President Lula has expressed discontent with the initial delays, blaming the lack of progress on complications and bureaucratic processes.

Opponents have accused the timing of the announcement of being a ploy to win approval for the ruling party and for Lula’s top choice to succeed him in the presidency, current Presidential Chief of Staff Dilma Rousseff, at this year’s election.

Cities Minister, Marcio Fontes, defends PAC 2 as a necessary continuation of its predecessor, insisting in a recent statement to the press; “We can’t lose continuity in our execution. In the first PAC, we wasted a year and a half on discussions, projects, environmental licenses, boundary questions and bidding. The initial period is very long. But in a second moment we have to start with advance, with objectives and values that will be focuses so that a selection of projects can be made.”

Marina Silva, Pernambuco State senator and Green Party candidate in the upcoming presidential elections, has voiced ample opposition for the launch of PAC 2, stating to the press; “The PAC projects are important, but there is still a long way to go to integrate it with a long- and medium-run vision for economic and social development. The PAC is a project management program, and in fact most of the projects in PAC 1 have not yet been executed. The PAC 2 has a series of projects that were already part of PAC 1 and, certainly, will increase levels of default, as PAC wasn’t addressed correctly.”

Dilma Rousseff, Presidential Chief of Staff, at the PAC 2 Launch Ceremony, photo by Antônio Cruz/ABr.

PAC 2 targets include increasing the country’s energy production capacity as well as building homes and making necessary improvements to prepare for the 2014 World Cup and 2016 Olympics.

Specifically, it plans for the construction of two million homes, which in addition to the one million homes promised by PAC 1, will help reduce the country’s housing deficit by half. Plans also include a high-speed rail service between Rio and São Paulo.

In Rio, PAC 2 will extend investment to favelas not currently benefitting from the first, namely Complexo da Penha, Jacarezinho, Kelson’s, Mangueira, Borel, Coroa, Andaraí, Chapéu Mangueira, Dona Marta, Batan and Cidade de Deus. The plan includes construction of two cable car systems in Complexo da Penha and Mangueira.

In Leme, the Chapéu Mangueira and Babilônia favelas will be connected via the installation of a funicular between the two. Dona Marta in Botafogo will gain another funicular, in addition to several new residential buildings to house families from the community.