FX: Brazil needs to grasp the real problem

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FX: Brazil needs to grasp the real problem

The 100-day mark of Brazil’s new president, Jair Bolsonaro, has recently passed; no one – not even the government itself – pretended the time had been well spent.

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Instead, officials promised that the administration was listening to its (many) critics and described the landmark as something of a new start – which lasted about 24 hours until Bolsonaro wiped R$30 billion off the value of Petrobras with a late evening call to the company’s president asking him not to follow through with a planned increase in the price of diesel.

So, while governance and the progress of reforms (and particularly the pensions reform) is an issue, the progress of the infrastructure agenda has been a welcome source of good news. By keeping continuity with the PPI authority that previous president Michel Temer established to manage the pipeline of infrastructure concessions, the current administration has been able to point to some real successes. The new infrastructure minister, Tarcísio Gomes de Freitas (promoted from the PPI), has overseen the auction of 16 concessions. This is fewer than his self-imposed target of 23 for the first 100 days but those that were conducted were successful: airports, railways and toll roads saw competitive bids and the funds raised beat the minimum targets and most analysts’ expectations.




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