Brazil’s historical shift in the privatization process has been tied to infrastructure changes. The National Confederation of Industry conducted a study about this topic. The organization stated that the country’s infrastructure-related sectors have been necessary for the modernization of Brazil. To the CNI, the country’s privatization process is also important for meeting investment demands. Felipe Montoro Jens is a Brazilian infrastructure expert, and he recently explained the history of privatization in Brazil.
Who Is Felipe Montoro Jens?
Felipe has more than two decades of experience in infrastructure. He earned a master’s degree in business management at the Thunderbird School of Global Management in Arizona, and he studied at Brazil’s prestigious Getulio Vargas Foundation before that. To show his commitment to improving infrastructure in Brazil, Felipe served on several administrative boards. He held distinguished roles with notable companies, and he specialized in issues such as economic waste, corporate waste and government solutions. His training at the Getulio Vargas Foundation properly prepared him for positions in both the public and private sectors.
The History Of Privatization In Brazil
Brazil’s history had a stronger government presence in the past. It was especially notable during the 1900s. According to the research report from the CNI, the political regime that was in power in the 1930s started the modernization process for the country. During the next five decades, there was considerable growth within the government. Also, that period marked the growth of state-owned enterprises. In the 1980s, there was a major debt crisis in Brazil, and that time marked the main deviation in the privatization process.
The government made privatization a part of its economic reform program in 1990 when it established the National Privatization Program. With this new benefit, companies in the petrochemical, aeronautics and steel sectors experienced privatization. The CNI’s report also noted that the 1995 Concessions Law prioritized the privatization of the transportation, telecommunications, sanitation and electric energy sectors. Additionally, it ordered the sale of state-operated banks.
In 2004, the historic Public Private Partnerships Act was established. Today, the partnerships that come from this act are commonly called PPPs. The telecommunications sector was the first major infrastructure-related sector to become privately controlled in Brazil. According to the report from the CNI, this sector was the best example of a smooth privatization transition in the country.
The 1997 General Telecommunications Law made the state responsible for regulation but not for service provisions. After that time, the National Telecommunications Agency was formed for regulatory purposes. ANATEL took over the task of determining tariffs and relieved the Ministry of Communications of its former duties. With this change, the goal was to make a more competitive environment.
Felipe Montoro Jens also highlighted the example of Telebras. There were many efforts to make Telebras more productive in the 1990s. It was divided into 12 separate holding companies, and each of the separate portions were auctioned off to bidders. When the auction took place, each participant could only bid on one holding. The purpose of this structure was to prevent a monopoly. After the July 1998 auction took place, the telecommunications sector was transformed in a major way. It was controlled by multiple private agents instead of by one entity.
“Always be focused on the main goal to be achieved and what exactly has to be done in order to achieve it.” https://t.co/bk1tLS5v5h
— Felipe Montoro Jens (@felipemontoroj) June 12, 2018
Since regulatory agency consolidation was a critical part of the process, these steps were important for the development of standards. The standards were outlined in a clear manner to ensure that transitions were smoother. Also, this promoted competition, which led to an increase in efficiency of services. In the end, the shift was especially beneficial to Brazilian citizens who used telecommunications services. Those changes continue to benefit them today.
In 2008, the General Concessions Plan was established, and its purpose was to create a sustainable segment over time along with a plan to universalize telephone services. This plan was enacted in 2011. Felipe Montoro Jens also pointed out the importance of the governance of the privatization processes along with the centralization of operations in relation to the National Economic and Social Development Bank. Today, this financial institution supports many investment-style initiatives that fund improvement projects in all infrastructure sectors in Brazil. Felipe said that the initiatives will improve the economy over the next several decades.
Read more about Felipe Montoro Jens’ work on Brazil’s recovery here: Valor de debentures de infraestrutura bate recorde esse ano, destaca Felipe Montoro Jens