President Luiz Inácio Lula da Silva (PT) relaunches this Friday (11), in a ceremony at the Municipal Theater of Rio de Janeiro, the Growth Acceleration Program (PAC). Brand of PT governments, the PAC was created in 2007 and has already had three versions. The fourth, which will be launched this morning, should provide for investments of up to R$ 1 trillion over the next four years – an amount similar to that invested in PAC 2 (from 2011 to 2014) and in PAC 3 (from 2015 to 2018). This year alone, it would be at least R$ 60 billion.
These forecasts were presented by ministers to leaders of the National Congress in a meeting on Monday (8). At the time, the priorities of the new version of the program were also indicated. The resumption of paralyzed works in the country and investment for a national energy transition will be among them.
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Governors, by the way, have already delivered to the government works that they consider a priority in their states and that, therefore, will probably be included in the new PAC. These works can be carried out with federal public resources or through public-private partnerships (PPP), which will be foreseen in the program, as they have been in previous editions.
Pedro Faria, economist and researcher at the Center for Development and Regional Planning at the Faculty of Economic Sciences (Cedeplar) at the Federal University of Minas Gerais (UFMG), recalled that previous editions of the PAC are among the main factors responsible for economic growth and generation of employment in the past.
According to him, mainly, in President Lula’s second term (from 2007 to 2010) and in the first term of former PT President Dilma Rousseff (from 2011 to 2014), the unemployment rate in the country fell and social inequality also, lowered by the increased household consumption and investment in public works, which came through the PAC.
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This evolution of social indicators is portrayed in an article written by the researcher at the Institute of Applied Economic Research (IPEA), Maria Nunes, and released as a chapter of a book published in 2017 by the agency. Nunes also highlighted the positive effects of the PAC on the economy and the achievements of the initiative.
“The PAC undertakings spread throughout the national territory”, he wrote. “Approximately 11,836 km of highways, 2,160 km of railways and 54 undertakings in Brazilian ports were completed. 34 undertakings were concluded in waterways, while in the airport sector 54 new undertakings were incorporated among passenger terminals, runways and aircraft patios, expanding the capacity in more than 70 million passengers per year.”
Faria, from UFMG, pointed out that, in her second term, Dilma reduced public investment and the indicators of growth, employment and inequality began to deteriorate. Faria stated that, more recently, in the governments of Michel Temer (MDB) and Jair Bolsonaro (PL), public investment did not even compensate for the depreciation of assets. That is why Brazil went through a period of such low growth.
“The PACs were very positive”, added Mauricio Weiss, economist and professor at the Federal University of Rio Grande do Sul (UFRGS). “They increased domestic demand, activating the economy, generating jobs, but they also had a long-term impact, increasing the country’s productive capacity and infrastructure.”
Weiss pointed out that the PAC invested a lot in power generation in the country. If it weren’t for the program, according to him, Brazil would be facing the risk of rationing today, similar to what happened in the country in 2001.
In the PAC, the hydroelectric power plants of Belo Monte (in Pará), Santo Antônio and Jirau (in Rondônia), and Teles Pires (in Mato Grosso) were built. The construction of Belo Monte was surrounded by criticism from environmentalists. It even culminated in the resignation of the then Minister of the Environment, Marina Silva, from the then Lula government.
In addition, several PAC works ended up being involved in corruption allegations. Part of them was investigated in the Lava Jato operation.
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Nunes, from Ipea, recalled in his article that the PAC was created to reduce regional inequalities. In this respect he failed. “In PAC 1, the amount of resources transferred to the Southeast region was consolidated at 54% of the program’s total resources, while the Northeast covered 19%, the South region remained with 12% and the North and Midwest, with 7% each region. As for PAC 2, there was little change in the design of resource transfers in relation to the transfers carried out”, he informed.
Despite this, Weiss, from UFRGS, said that the expectations for the relaunch of the program are great, as well as its challenges.
“There are an estimated R$ 1 trillion, but that depends on public-private partnerships. It is not certain that private investment will come”, he said. “There will be attractive projects, but there is not as much confidence that it will happen as before.”
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According to the government’s presentation to congressmen, R$ 240 billion of the investments foreseen in the PAC would be federal public resources. That is, at least R$ 760 billion would come from the private or state sector.
Petrobras, again, must have a prominent role in the PAC. Eletrobras, however, had its management privatized by Bolsonaro. It no longer needs to attend to government projects as it did in the past.
The government’s investment capacity in the PAC will also depend on the fiscal restrictions that will be imposed on it by the new fiscal framework, which is still pending in the Chamber of Deputies. Arthur Lira (PP-AL), President of the House, informed that he will only vote on the project after the launch of the PAC. Depending on the outcome of the vote, the federal government’s investment capacity may be even more compromised.
Editing: Thalita Pires