Brazil's privatisations will suffer electoral setbacks

Subject

The government's privatisation programme.

Significance

The programme of privatisations and concessions figures high on President Michel Temer’s reform agenda. A total of 145 projects have been proposed since 2016 in a wide range of sectors, including energy and other infrastructure at central, state and municipal government levels. Better services and market efficiency are among the government’s arguments for the programme, although it may contribute primarily to alleviating fiscal budget constraints and attracting foreign investors.

Impacts

• Public infrastructure services will remain high on Brazil’s privatisation agenda.
• Political turbulence and the proximity of next year’s elections may delay planned privatisations and concessions.
• The use of public assets as a source of political bargaining may prove harmful to the country’s economic recovery.