The "Growth Acceleration" initiative unveiled by Brazil on Friday envisions 1.7 trillion reais (US$347.5 billion) in investments, with a growing emphasis on public-private partnerships. Simultaneously, the government is propelling a fresh ecological transition strategy, Reuters reports.
This initiative, referred to as PAC, revisits a program initially introduced by President Luiz Inacio Lula da Silva in 2007 during his previous tenure. The program aimed to boost investments in energy, logistics, and urban and social infrastructure.
Subsequently, it was extended during the tenure of his successor, former President Dilma Rousseff. Detractors argue that it led to disproportionate expenditures, worsening Brazil's fiscal crisis, all the while not delivering significant strides in infrastructure enhancement.
In this iteration, Lula's administration asserts that the strategy will chart a course characterized by heightened collaboration between the public and private spheres, with a projected disbursement of over 1.3 trillion reais by 2026.
"This PAC is different from the other ones. The state will stimulate PPPs," Lula's Chief of Staff Rui Costa said at the launch of the program in Rio de Janeiro. He added there would be "fiscal and environmental responsibility" while looking after social needs.
The "Growth Acceleration" initiative unveiled by Brazil on Friday envisions 1.7 trillion reais (US$347.5 billion) in investments
"It's time we buried the idea that social responsibility is fiscal irresponsibility," he said.
A substantial portion of the funding, totaling 371 billion reais or 22% of the overall investment, will originate from the federal government. Concurrently, state-owned enterprises such as the prominent oil company Petrobras (PETR4.SA) are poised to inject an additional 343 billion reais.
The private sector is poised to contribute a substantial sum of 612 billion reais. As of now, the government has not provided immediate details regarding the fiscal implications of the initiative, nor has it established a specific timeframe for the plan.
While the proposal encompasses numerous projects within the oil and gas sector led by Petrobras, including investments in the pre-salt offshore oilfields, Lula's team is putting a strong emphasis on its environmental objectives and has unveiled an "ecological transition plan."
Lula has committed his global reputation to reversing the environmental regression that occurred during the tenure of his far-right predecessor, Jair Bolsonaro, marked by a surge in Amazon deforestation. However, Lula is confronted with the pressure to deliver essential growth to impoverished and underdeveloped regions. He envisions Petrobras as a driving force behind this growth.
Notably, the PAC does not allocate funds for the paving of the BR-319 highway cutting through pristine sections of the Amazon rainforest, a project proposed by the Bolsonaro administration. Environmentalists have cautioned that such an endeavor would result in irreversible damage.
