A SUPPLEMENT TO EUROMONEY - MARCH 1997Unlocking Brazil's potentialThe raft of privatizations planned for 1997 looks set to release some of Brazil's fabled wealth. Just in time, as the economy begins to falter.Michael Marray reports Brazil's ambitious privatization programme could help to free the potential of what is comfortably the largest economy in Latin America. Sao Paulo state alone has a population twice that of Chile, and its own privatization programme rivals that of many countries. Factor in the state of Rio de Janeiro and the mining riches of the interior of the country, and the opportunities for foreign investment are clearly immense. Co-ordinating such a sweeping programme is a complex matter, especially when the federal government, the states, and the municipalities are all involved, sometimes in the same industry sector. For this reason the federal development bank, Banco Nacional de Desenvolvimento Economico e Social (BNDES), sees a central role for itself in the overall process. The bank has been instrumental in selling the message of privatization to the states, using its own sale of federally owned assets as a blueprint. It is now offering its services as consultant to the states on their own programmes, addressing such issues as the viability of trade sales versus public offerings and the extent to which Brazilian as opposed to foreign investors should be involved. |