Executive project aims to privatize the pre-salt surplus that goes to the Union
Current Brazil Network – President Jair Bolsonaro (PL) sent a bill to the National Congress for the privatization of surplus oil from the pre-salt layer that currently goes to the Union. In the proposal, which was made public this Thursday (9), the Ministry of Economy also includes the untying of the revenue from the sale of fine oil, which was intended for the Pre-salt Social Fund, for investments in the areas of education and health. The bill authorizes the sale of oil extracted through sharing contracts, currently marketed by Pré-Sal Petróleo SA (PPSA), a state-owned company that is also the target of the federal government’s privatist appetite.
The Unique Federation of Oil Workers (FUP) warns that with the measure, Bolsonaro practically decrees the end of the model of sharing pre-salt resources. The assessment is that the project follows the same line of privatization as Petrobras. The economist of the Social Observatory of Petroleum (OSP) and the Brazilian Institute of Political and Social Studies (Ibeps), Eric Gil Dantas, assesses that, in practice, President Bolsonaro wants to advance future revenues to, fulfilling, increase his electoral chances.
In the text sent to parliamentarians, the federal government estimates revenue of R$ 398 billion with the privatization of the pre-salt layer. “The sale of Petrobras will provide him with some R$40 billion in cash (Bolsonaro can spend it until the end of the year. And now he wants to sell this surplus oil”, criticizes Dantas in an interview with Glauco Faria, for Jornal Brasil Atual. “He advances this future income, separates it from education and health and, thus, he will spend as he wants. For example, the miraculous projects to reduce fuel prices until the election”.
Less health and education
The economist also warns that the project is another step towards removing oil revenues from a broad development strategy. The untying of pre-salt resources for health and education is seen as the main controversy due to the risk that these areas will lose even more public budget. Currently, education receives the largest share, 75% of transfers and health, the other 25%.
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This is because when the Social Fund was created, in 2010, under the government of Luiz Inácio Lula da Silva (PT), there were great debates that raised the importance that the pre-salt resources, considered a wealth of Brazilians, not only be placed as profit or immediate revenue. But that it became a source of resources for education, health and local industry, like countries like Norway in the 20th century.
From then on, the Social Fund became sovereign, receiving a portion of the pre-salt resources, such as royalties and special participations. However, since 2016, with the coup that deposed President Dilma Rousseff (PT), the dismantling of the sharing model to benefit private oil companies has been underway, according to Dantas. The economist says that Brazil has been “sinking” any form of strategy of not being a country merely exporting commodities and producing primary products.
‘Selling the Future’
The government argues, however, that there will be no “damage” to the areas. In addition, privatization could send the message to the world that Brazil does not invest in dirty sources, as he defended to the newspaper O Estado de S.Paulo. Eric Gil Dantas warns, however, to the opposite effect. According to the economist, the Bolsonaro government is “selling” and “compromising” the country’s future by untying resources from health and education. There will be billions that should go to the Social Fund and that won’t, he points out.
“And if Bolsonaro is happy with his attempt at legislative change, he will bring all this forward to this year to become solely a tool to try to increase his chances of reelection. Our economic development strategy is turning into a reelection strategy for Bolsonaro only, in the worst way of small politics. He (the president) is very desperate because polls show that he could still lose in the first round and he wants to rally support. (…) In addition to delivering a future development strategy, we will have less money over time so that Bolsonaro has all the money he needs to seek reelection”, criticizes the OSP and Ibeps economist.
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