‘Privatization’ Is No Longer a Dirty Word in Brazil, Even in an Election Year

In one of the most iconic photo moments of his presidency, Luiz Inácio Lula da Silva waves a pair of hands slicked with crude oil from a petroleum platform operated by Brazil’s government-run oil company, Petrobras. The country’s state-heavy economy was roaring, buoyed by the global commodity boom, prompting Lula to later declare, “God is Brazilian.” Twelve years later, Lula is in jail, Petrobras is reeling from a massive corruption scandal, and Brazil’s era of undisputed resource nationalism has reached an ignominious end. As presidential elections in October approach, the long-unthinkable is now being openly debated: Should public assets be sold off?

“I’d sell all the state companies,” billionaire and presidential hopeful Flávio Rocha proclaimed recently. Alvaro Dias, a centrist running for the Podemos party, has proposed a “radical downsizing” of the state. These politicians are banking that anger over corruption, the worst recession on record, and empty public coffers can help bring about a change in voters’ attitudes toward privatization. It’s a risky bet, given a recent survey showing that 7 out of 10 Brazilians oppose the idea, led by the poorer and less-educated. “Turning toward the private sector is less a question of ideology than it is of mathematics—the state is bankrupt,” says Marco Troyjo, a Brazilian-born professor of international and public affairs at Columbia University in New York. “It’s an historic debate. In all its history, the state always dominated economic activity in Brazil.”