Economy

Brazilian state-owned Postal Service Correios to be privatized by the end of 2021, says Economy Minister

Guedes defended that the current government was elected to privatize state-owned companies, but said that there are agreements in Congress preventing actions in this direction

Brazilian Economy Minister, Paulo Guedes.Photo: REUTERS/Adriano Machado/File Photo
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  • Guedes did not name parliamentarians by name when talking about the bar in Congress;
  • Looking at the Brazil’s portfolio, the minister said that state-owned companies are worth about BRL 700 billion.

The Brazilian state-owned Postal Service Correios and three more state-owned companies (Eletrobras – Energy, Port of Santos and PPSA – Pre-Salt Oil) are expected to be privatized by the end of next year, according to the Brazilian Economy Minister Paulo Guedes.

Guedes defended that the current government was elected to privatize state-owned companies, but said that there are agreements in Congress preventing actions in this direction, imposing the need for a new political orchestration to move the agenda forward.

READ ALSO: Correios’ postal workers have to resume work as of Tuesday, decides Brazilian Justice

“Then there is a political agreement suddenly in the House, in the Senate, which does not allow privatization. What is this story? So we need to recompose our political axis in order to be able to carry out the privatizations we promised during the campaign,” he said, during the opening of an event promoted by the Brazilian Federal General Comptroller (CGU).

Guedes did not name parliamentarians by name when talking about the bar in Congress. At the end of September, the minister even said that, according to rumors, Brazilian House SpeakerRodrigo Maia, would be working with the left to avoid privatization.

Last morning, the minister said he was “quite frustrated” with the fact that President Jair Bolsonaro government had failed to sell any state-owned company in two years, but stressed the need to accelerate this movement, as well as the sale of state-owned real estate to reduce the public debt.

He emphasized that both the National Bank for Economic and Social Development (BNDES, in Portuguese) and the Privatization Secretariat have the mission to complete the task and that the first action in which they will engage will be the sale of the State Water and Sewage Company of Rio de Janeiro (Cedae).

READ ALSO: Why is the Brazilian government pushing public sector reform during a historic crisis?

Looking at Brazil’s state-owned portfolio, the minister said that state-owned companies are worth about BRL 700 billion and real estate BRL 1.2 trillion, and that it does not make sense for the government to carry inefficient assets while watching liabilities rise, which is why the the economic team’s plan, from the beginning, was to use these resources to “bring down” the debt.

“If we had killed the debt, we could have had these resources perfectly allocated to transfer income to the poorest and even substantial income,” he stated.

Guedes admitted that, even due to the delay in privatization, a secretary of his portfolio decided to leave, in reference to Salim Mattar, but pointed out that another one came in with “a lot of determination and more youth” – the substitute Diogo Mac Cord de Faria, today heading the Special Privatization, Divestment and Market Secretariat.

“Maybe he can take the stride and will be able to deliver more. He only has to score one goal to win because the other one was zero, we didn’t do anything,” he said.

(Co-written and translated by LABS)

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