This week, we are covering Brazil’s push to clear infrastructure projects. And the government’s moves to make life harder for Chinese companies.
Greenlighting new infrastructure regulations
There is a major divide within the Jair Bolsonaro administration over how to deal with the push for recovery in the post-pandemic economy. The government’s military wing, which enjoys much prestige with the president, is in favor of massive infrastructure investments, even if that means smashing the federal spending cap created late in 2016 to rein in public expenditure. To deal with that impetus, Economy Minister Paulo Guedes and House Speaker Rodrigo Maia appear to have found a Solomonic solution: they want to change regulations on several infrastructure sectors as a way to boost private investment.
- That would include new regulatory frameworks for the gas and electricity sectors, as well as altering the rules for concessions and PPPs (public-private partnerships).
Why it matters. Mr. Maia argues that the federal spending cap is the only way Brazil will sustain long-term investments and move forward with structural reforms — such as overhauling its labyrinthine tax code and trimming the fat in public service.
Tug of war. The Economy Ministry agrees with the Speaker, but many sectors of...