The Minister states that directing state company investments, for example, towards ecological transformation, does not seem like government intervention in society
BRASILIA-IL Minister of Finance, Fernando Haddaddeclared on Wednesday 27th that the president Luiz Inácio Lula da Silva will act as data controller Petrobras, both in relation to pricing and investment policy, so that the company invests more in strategic areas for the government, such as, for example, in an ecological transformation plan. The statement was made in an interview with CNN.
The minister’s assessment is that directing Petrobras’ investments, as in the example of ecological transformation, does not seem like an intervention in the state company.
“The president has already said a million times that, both in relation to the pricing policy of Petrobras and in relation to the investment policy of Petrobras, being a strategic company, he will act as a controller so that Petrobras, for example, invests more in ecological products transformation. It is the controller’s right to encourage Petrobras in this direction. If the oil does not run out, it will be used less and less,” the minister said.
According to him, the government is encouraging investment “including in research and development focused on green hydrogen.” “I don’t think this is an intervention,” he said.
When questioned about other companies, he stated that in the case of Eletrobras, discussing the union’s representation on the board of directors is not abnormal and does not even constitute an intervention.
The Lula government has been criticized for attempting to interfere in the management of large companies. The most recent example was the decision of the Petrobras board of directors to withhold the payment of extraordinary dividends to shareholders, totaling R$43 billion, following a decision by President Lula himself. The announcement frustrated the market and caused the state-owned company to lose around R$56 billion in market value in a single day.
Petrobras is a joint venture whose largest shareholder is the Brazilian government, which holds the majority on the board of directors (six of 11 seats). Shortly after the decision, the president of the state-owned company, Jean Paul Prates, took to social media to answer questions. “It is legitimate that the AC (Board of Directors) take a position under the guidance of the President of the Republic and his direct assistants, who are the ministers. That’s exactly what happened,” she said.
Haddad said Treasury’s role is to contribute to a good business environment in the country, which includes calming market feelings when it comes to government actions with state-owned companies.
Economic guidelines
The finance minister said Congress’ economic agendas would move forward into 2024. “Everything is moving forward,” he said, without specifying the plans. When asked about the impact of municipal elections on the advancement of these issues, such as income tax reform, Haddad said that Treasury does not control the election calendar and that the Department is dedicated to formatting the texts of income tax reform regulations consumption.
These texts must be delivered to Congress in the first half of April. He said he believes the regulation can be approved in the House in the first half of the year and that he sees room for the advancement of other texts on the microeconomic agenda.
Haddad reiterated that Treasury has a good relationship with Congress, a direct line, and warned that there is concern only when polarization jeopardizes issues crucial to the country’s future, such as consumer tax reform. He recalled the pressure from the opposition to block the progress of the text, which ended up being approved and promulgated in 2023.
Growth in 2024
Haddad said Brazil’s economy will grow more in 2024 than Pasta forecast, currently at 2.2%. “Our technicians will have to review the projections, I doubt that Brazil will grow very little,” he said.
Haddad commented that he does not see much uncertainty on the short-term horizon for the conduct of monetary policy and that the trend is for the external environment to improve by mid-year. In Brazil, he cites cooling inflation, especially in the food sector, and a window of opportunity for a positive growth cycle.
Source: Terra
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