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 For every 100 Brazilians, there are now 51 mobile phones and there are expected to be 100 million cellular phones in operation by the end of the year. The mobile telephony revolution has given most of the population access to a means of communication which was unthinkable 10 years ago when telecommunications was the monopoly of the inefficient state-owned concern Telebrás.
In those days subscribers had to wait years to get a landline, with the result that a black market sprung up and lines being sold for thousands of reais. However, President Luiz Inácio Lula da Silva has made privatization a campaign issue and used it to attack his rival, Geraldo Alckmin of the PSDB. Instead of seizing this advantage, Alckmin has been intimidated and is ruling out the privatization of companies like Petrobras, the Post Office, Banco do Brasil and the Caixa Econômica Federal (CEF). The privatization campaign was one of the driving forces of the first mandate of President Fernando Henrique Cardoso. Utilities like telecommunications, gas and electricity and water treatment were sold off, along with state-owned banks, steel and mining companies. The privatization of Telebrás and other public companies like the mining concern, CVRD, the regional jet manufacturer, Embraer, the steel manufacturer, CSN, and a number of banks has resulted in companies which are now much more efficient and profitable. CVRD, for example, has just acquired the Canadian company, Inco, at a cost of US$ 18 billion and became the second-largest mining group in the world. Since it was privatized 10 years ago, after a furious opposition campaign by Lula's PT, reactionary nationalists and even Catholic bishops, CVRD has increased its direct workforce from around 11,000 to 44,000. It has invested billions of dollars not only to boost production and improve efficiency but also in initiatives related to environmental protection and social responsibility. Steel companies like CSN and Cosipa have also flourished under private ownership. The former CEO of CSN, Maria Silva Bastos Marques, pointed out in an article published in the Estado de S. Paulo on October 25, 2006, that the consolidated losses of the state-owned steel companies in 1992 came to US$ 260 million whereas by 2005 this figure had become a profit of US$ 4 billion. These profits have been channeled back into the economy not only in dividends to shareholders but also in taxes. Instead of being a drag on the taxpayer the companies have become a regular source of revenues. However, none of this seems to have changed Lula's attitude. He claims that Alckmin intends privatizing some sacred cows like Banco do Brasil, Petrobras and CEF. Regardless of Alckmin's denials, Lula repeated these charges and they stuck. Alckmin was unwilling to fight back on this issue and eventually caved in. To show his support for continuing state control of these companies, he was photographed wearing a jacket emblazoned with their names. He ended up looking more like a Formula One driver covered in the advertising logos of his sponsors than a presidential candidate. This is a good example of how genuine debate over issues has been absent from this campaign. Not once did Lula give any reason for being against privatization. Not once did he attempt to show the benefits of having Petrobras or Banco do Brasil under state control. Alckmin also refused to go into detail on issues, such as how to handle the gaping hole in the public accounts caused by Brazil's absurdly generous pension scheme for public employees. He has concentrated on corruption and the bad news and failed to convince the electorate while Lula has dodged the issue of corruption and concentrated on the new good news about the economy. The electorate obviously prefers Lula's message. The latest opinion poll by DataFolha, published four days ahead of voting, gives him 61% compared with 39% for Alckmin. Lula now seems unbeatable. Finally, one of the reasons why Lula is so keen on keeping big companies like Petrobras and Banco do Brasil under control is that they provide great opportunities for political patronage. People can be appointed to the board of directors and to executive management positions on political not technical grounds. Once these politicians are in place, they can hire and fire who they want and provide sinecures for their allies, friends and relatives. More importantly, they have access to the company's cash. State-owned companies were at the heart of the "bribes for votes" and have been linked to the "bloodsuckers" scandal and its latest development, the alleged attempt by the PT to buy information from corrupt businessmen to smear the PSDB's José Serra, recently elected governor of São Paulo. John Fitzpatrick is a Scottish writer and consultant with long experience of Brazil. He is based in São Paulo and runs his own company Celtic Comunicações. This article originally appeared on his site www.brazilpoliticalcomment.com.br. He can be contacted at
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. © John Fitzpatrick 2006
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Is this a Brazilian estimate ? Ohhh then I understand....that it is worth.....NOTHING !
Stop sniffing your sockets ! No good for simple maths !