Investor desperately needed.
They went too far with rampant protectionism, and it seems that only now, after a year of lost time, are thoughts and discussions about the new privatization model beginning again.
The government is attempting to overcome its strategic paralysis by attacking partnerships and promoting concessions to leverage investments, primarily in railway infrastructure. The problems encountered throughout the planning and execution phases demonstrate the government's incompetence in managing strategic processes and the lack of mobility among its agents.
Dilma Rousseff is still trying to salvage and register her term as something that promoted improvements in public services and made great strides in improving the relationship between the State and the Population. Unfortunately, we are still only left with the intention of doing so, without concrete effects and a tangle of decisions and inconsistencies that appear more like missteps than genuine positions.
Since last year, the program has been written and launched, but it has failed to attract major investors capable of executing the projects. This has proven just how detrimental the heavy hand of the state can be in the economy.
They went overboard with rampant protectionism, and it seems that only now, after a year of wasted time, are thoughts and discussions about the new privatization model beginning again.
The aim is to find a middle ground and definitively articulate the new actions so that the projects can be leveraged. Some conglomerates were adamant in stating that if the privatization process continued as drafted, they would not participate in the bidding process.
Other operators and potential investors ended up giving up, arguing that there is no reliable legal framework, since the government has already interfered with several contracts related to other areas that require substantial investments, weakening the return on invested capital. Energy and port sectors are examples of the legal instability the government is experiencing.
In an attempt to overcome this decline in institutional confidence, Dilma summoned Guido Mantega and his team, as well as Tombini and his technicians, to get involved in resolving the problem with the private sector, and has already listed some factors that inhibit interest in participating in the bidding process.
The minister also sought, in private meetings, to articulate and recapitalize business confidence in the growth of the national economy, ensuring that investment is not scarce in other areas, and requesting greater mobility for conglomerates.
Sectors such as services and commerce, which had been distant from the government, received special attention in this phase of rapprochement.
The positive measures generated by the payroll tax exemption were also part of the positive agenda implemented to attract new investors. The gains were truly important for businesses to cope with seasonal fluctuations.
Mantega is trying to shed the motto of creative accounting, which has given his administration an undesirable reputation: arduous decision-making and exhausting negotiations to ensure objectives are met.
In addition to Mantega's undertaking, it fell to the president of the Central Bank, Alexandre Tombini, to fight to increase the recognition of his actions and to try to restore market confidence in his price indices, as well as to contain the rise of the dollar.
The Central Bank has been intervening firmly to prevent a large jump in the exchange rate, and even so, the effects are far below expectations. The surge in the US dollar remains with an upward bias. Tombini continues to be torn between defending inflation, meeting the government's demands, and trying to contain the dollar.
At a time when the global economy is still not responding to stimulus measures and the flow of investment remains without a defined route, the Brazilian government is trying and needs to implement ambitious projects to foster economic growth. Even with the setbacks in the Chinese economy and its outliers, there is an expectation that the global economic engine will return to its former glory, or at least emerge from its current lethargy.
Seeking investors for such ambitious projects requires much more than just having a few tricks up your sleeve in the capital attraction game. It's necessary to guarantee a solid results plan and institutional assurances that the contracts signed so far will not be broken or significantly altered.