For decades, privatization was a dirty word in Brazil. Even after several scandals which unveiled corruption schemes in state-run companies, only 17 percent of Brazilians are in favor of privatizing public companies, according to a survey by Ipsos.
Brazil has more state-owned companies than any other Latin American country: 418, of which 138 are federally owned. When compared to member states of the Organization for Economic Cooperation and Development (OECD), Brazil’s numbers seem even more incredible. Hungary, which comes in second place, has 370 such firms, while Mexico has 78 and, Chile, at the bottom of the ranking, has only 25.
As the country’s debt inches close to 90 percent of its GDP, according to the International Monetary Fund (IMF), privatizations are returning to the center stage of Brazilian politics. Far-right populist Jair Bolsonaro was elected president despite promising to privatize “nearly all” state-owned companies, including Brazil’s crown jewel, oil and gas giant Petrobras.
Even if Mr. Bolsonaro’s presidential bid was fueled by a middle class angry at the Workers’ Party, it would be unimaginable to see such a pro-market candidate thrive. In 2006, then-social democratic presidential candidate Geraldo Alckmin had to wear a jacket with logos of state companies while pledging never to privatize them. But that wasn’t enough, and the Workers’ Party centered its negative campaign on Mr. Alckmin by mongering the fear of privatizations.