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Brazil to focus on completing unfinished infrastructure projects

Bnamericas Published: Friday, September 04, 2020
Brazil to focus on completing unfinished infrastructure projects

The Brazilian government will focus its budget on completing unfinished infrastructure projects amid fiscal restrictions. 

"The government will be concentrated on concluding unfinished projects, while we are working to advance our agenda of concessions to provide new projects for the private sector," said infrastructure minister Tarcísio Gomes de Freitas during a webinar organized by the country’s industry confederation (CNI). 

"We will make infrastructure investments respecting our fiscal pillars. There is no conflict inside the government about that. We know that it will not be possible to advance with infrastructure investments without a major participation of the private sector since there is a scenario of fiscal restrictions," Freitas said. 

Local media had recently speculated that inside the cabinet of President Jair Bolsonaro, Freitas had been calling for more public investments and opposed the stance of economy minister Paulo Guedes, who is in favor of fiscal discipline and investments driven by the private sector. 

The week saw the government send the administrative reform proposal to congress in an effort to reduce salaries and benefits for public servants with the aim of lowering long-term government expenses. 

In addition, the government is working on a tax reform proposal to simplify the country’s highly complex tax system. 

With a series of social programs in place to mitigate the economic effects of the COVID-19 pandemic, government debt is expected to approach 100% of GDP at the end of the year. 

"We should be investing 150bn reais (US$28.3bn) for two decades to renew our infrastructure. Fiscal restrictions are huge and will continue to be very tough in the years to come, said Claudio Frischtak, an infrastructure-focused economist and president of consultant group Inter. B, during the webinar. “Two thirds of the country’s infrastructure investments come from the private sector and in the coming years this participation is likely to expand." 

According to Frischtak, sector reforms are important to bring more private investors to the many projects. Congress recently approved new rules for the sanitation and natural gas segments, paving the way for more investments from the private sector. 

"We must also continue with reforms in specific sectors in order to attract investors, generating more legal security," said Robson Andrade, head of CNI. 

As an example, Andrade mentioned a bill in congress to boost cabotage along the country’s nearly 8,000km coastline. 

"We need to improve rules linked with our logistics because that guarantees the competitiveness of our industry."

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