By Lise Alves, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – The Brazilian government has announced plans to privatize or sell off approximately one hundred state-controlled companies including subsidiaries of Banco do Brasil, Caixa Economica and Petrobras. The goal of the new government of Jair Bolsonaro is to reduce spending and increase revenues.
“There are many subsidiaries,” said new Infrastructure Minister, Tarcisio Gomes de Freitas, in his first press conference as minister.
“Obviously, we are talking not only about privatizations, but also about liquidating companies that no longer make sense. The liquidations will increase the budget and there is more money left to invest in other priorities,” added the official.
According to Freitas the government there is no other way to increase the much-needed revenues. “To provide infrastructure, we will have to rely heavily on private initiative, hence our focus on concessions, in public-private partnerships,” he stated.
According to him a total of nine thousand kilometers of highways, a little over twice the distance between the US’s east and west coast, will be passed on to the private sector.
Banco do Brasil (BB) plans to sell part of its assets to increase its cash flow. “We understand that some assets of the bank do not keep synergy with their main activities and in these cases, we will consider the divestments, ” said BB president Rubens Novaes during the ceremony of transmission of the post.
The official, however, did not specify which assets would be privatized.
Pedro Guimarães, Caixa Economica’s new president, on the other hand, announced that Caixa should sell interests in areas such as insurance and lotteries, while investing in microcredit at lower interest rates.
“I can’t accept people borrowing money at fifteen percent, twenty percent [interest] a month,” he said. “Brazil can be a reference in microcredit.”