Former senator Jean Paul Prates (PT) had his nomination for the presidency of Petrobras approved this Thursday (26) by the board of directors of the state-owned company. On Wednesday (25), former minister Aloizio Mercadante (PT) was also approved by the board of the National Economic and Social Development Bank (BNDES) to chair the institution.
Thus, the new government of President Luiz Inácio Lula da Silva (PT) finally took command of the largest state-owned companies in the country. Days ago, the new president of Caixa Econômica Federal, Rita Serrano, and the new president of Banco do Brasil (BB), Tarciana Medeiros – the first woman to head the bank in 214 years – had already been sworn in.
All new presidents take over companies with the mission of reorganizing them and converting them into companies that promote the country’s development. The focus on the public role of state-owned companies, by the way, was Lula’s campaign promise recorded by him in his government’s directives forwarded to the Superior Electoral Court (TSE).
“It will be necessary to recompose the inducing and coordinating role of the State and state-owned companies so that they fulfill, with agility and dynamism, their role in the process of economic development and social, productive and environmental progress”, wrote Lula’s ticket.
This public role of companies controlled by the Union was neglected by the government of former President Jair Bolsonaro (PL) in his four years of management, as per the Brazil in fact already showed. Companies, such as Petrobras, reduced investments in the country, and prioritized generating profits and distributing them to shareholders.
Read more: Under Bolsonaro, state companies abandon social function and profit high from the economic crisis
Petrobras, by the way, was even considered the biggest dividend payer in the world in the second and third quarters of last year, which had never happened before. The ranking is prepared by asset manager Janus Henderson and released periodically.
Last year alone, the company committed to paying more than R$180 billion to its shareholders – most of them foreigners. That’s more than the company earned in the period. That is, the state-owned company distributed more profits than it actually had – which also had never happened in the company’s history until Bolsonaro’s election.
Petrobras prices
Part of Petrobras’ profits came from the high fuel prices charged by the company in recent years. Prices were high because they were based on a policy that considers the Import Parity Price (PPI) for defining values.
In practice, the company sold the fuel it produced in Brazil at prices similar to those on the international market. As gasoline rose around the world, the state-owned company also readjusted its prices. He gained from it and so did his investors.
::Petrobras increases gasoline before new president appointed by Lula takes office::
President Lula also promised to change that in his campaign. To the TSE, he declared that “it is necessary to Brazilianize fuel prices”.
According to economist Eric Gil Dantas, from the Social Observatory of Petroleum (OSP), this is one of Prates’ most urgent tasks at the head of Petrobras. For Dantas, this needs to be done even so that the government does not have to live with the inflation that each readjustment of gasoline and diesel causes in the economy.
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Prates, upon being appointed by Lula to the presidency of the state-owned company, declared that “Petrobras is a mixed economy company, which combines private and state capital, and needs to reconcile this nature with its structuring role in the country’s economy.”
Petrobras is a strong company, an international example of technical capacity, ingenuity and determination. It is a company that exists as a mixed economy company, which combines private and state capital, and needs to reconcile this nature with its structuring role in the country’s economy.
— Jean Paul Prates (@senadorjean) December 30, 2022
credit for population
Public banks also profited like never before during the Bolsonaro government. BB and BNDES recorded record gains in 2021. Caixa already achieved its highest accumulated profit in three years in 2021.
According to Simone Deos, a professor at the Institute of Economics at the State University of Campinas (Unicamp), this gain was linked to the high cost of borrowing credit to the population. Private banks took advantage of the rise in the economy’s basic interest rate, the Selic, to charge higher interest rates to their customers. Public financial institutions did the same, harming the population.
::Brazilian banks have record profits in the worst year of the pandemic::
“BB is an institution with the majority of its capital in the hands of the State”, explained Deos, in an interview with Brazil in fact. “It doesn’t make sense for it to operate against the national economy itself to make extraordinary profits.”
The presidents of Caixa and BB promised to review this. Caixa, for example, has already suspended the granting of payroll loans linked to Auxílio Brasil claiming that the interest charged on the line was too high and indebted vulnerable.
Serrano has also stated that the bank will “reorganize itself to fulfill with excellence the management of the government’s income transfer programs and Minha Casa Minha Vida”, which must be recreated.
Medeiros, from BB, spoke of credit for family farming in his possession. “We are going to further promote good agricultural practices, with outstanding support for family farming. Combining growth with sustainability in the countryside.”
According to Lula’s promises, the BNDES, along with other public banks, will act to “foster economic, social and environmental development and offer long-term credit and guarantees in structuring projects, committed to the financial sustainability of these operations”.
Editing: Rodrigo Durão Coelho
