Brazil looks at privatizing or closing 100 state firms

Brazil President Jair Bolsonaro. Photo: Foreign Policy

Brazil’s new government led by far-right President Jair Bolsonaro intends to “privatize or close” around 100 state enterprises to cut public debt, the government said Tuesday.

The program is not expected to include Brazil’s most prestigious state-owned companies such as oil giant Petrobras or power firm Eletrobras, considered corporate crown jewels.

But it will extend to some of their non-core subsidiaries, with money from divestments contributing to a plan to cut Brazil’s massive debt by 20 per cent.

According to the Getulio Vargas Foundation, there are 418 enterprises that are controlled by the government, the states or municipalities.

Infrastructure minister Tarcisio Gomes de Freitas told CBN radio the initial target figure of 100 was “completely doable given that many of these firms are subsidiaries — that is why we’re not only talking about privatizations but also closing companies that no longer make sense.”

Bolsonaro’s economic plan builds upon a direction started by his centre-right predecessor Michel Temer, who was largely stymied by lack of legislative support.

During his campaign, Bolsonaro said that, of the 138 companies run by the federal government, “100 could be privatized.”

Brazil ranks among the countries with the highest number of public companies.