The prospect of Brazil’s successful auction of deep-sea oil last month is considered a sign of oil majors’ appetite for crude oil. But for Brazilian officials, auctions are also a watershed in government infrastructure and natural resource concession plans.

Previous attempts to execute complex auctions ended in failure in 2019. “Our joy cannot be concealed,” said Bento Albuquerque, Brazil’s Minister of Mines and Energy, heralding the $2 billion in funding raised for a tightly-funded government and further companies such as Shell and TotalEnergies that will work in the country’s oil and gas sector. 35 billion USD investment.

Compared with the government’s more touted structural economic reform plan, the plan has been in trouble in Congress for many years, while plans to attract private companies to invest and operate major infrastructure projects have flourished.

Since the Bolsonaro government took office in 2019, 131 concessions have been auctioned, bringing the government more than 145 billion U.S. dollars in investment and 26 billion U.S. dollars in expenses. In the past 2.5 years-since the investment plan began in 2016-in today’s U.S. dollars, these figures were 44 billion U.S. dollars and 8 billion U.S. dollars, respectively.

Officials predict that more than 150 concessions are expected to be auctioned this year and will generate 70 billion U.S. dollars in investment as investors (mainly locals) invest money.

It is one of the rare bright spots in President Jair Bolsonaro’s economic agenda, bringing billions of dollars in much-needed investment to the country’s dilapidated roads, railways, logistics and sanitation systems.

The plan is the engine of an economy that has been struggling to grow for the past ten years. Despite a strong rebound from the initial impact of the pandemic, many economists predict that Latin America’s largest economy will contract again this year due to the combined effects of soaring inflation and interest rates and weak consumer confidence.

“Projects to be auctioned… Infrastructure Minister Tassiio Gomez de Freitas told the Financial Times that good progress has been made and we are confident that this will be done by the current government. The most intense year of concessions.

The projects lined up in 2022 include 26 airports, 25 ports, 10 highways and 9 national parks and forests. In addition, the government is expected to hold 10 mining rights auctions.

However, independent analysts pointed out that although Brazil has attracted some international companies—especially Vinci Airport—the investment is still mainly from local companies.

“We are on the right path, but we still have a long way to go, and the pace is very slow. We have problems with attraction [new players]Those who are here have become accustomed to all the uncertainty and the government insists on blew up. But it is difficult for outsiders to understand Brazil,” said Claudio Frischtak, president of consulting firm Inter Milan. B.

He said: “The point is that when the government’s ideological activism is meaningless to a country like Brazil, it is difficult to attract investors.”

Brazil’s Finance Minister Paulo Guedes believes that despite double-digit inflation, soaring interest rates and persistently high unemployment, these investments will drive economic growth to 2% in 2022.

However, economists have warned that the October election this year may affect investor sentiment-Bolsonaro may have a deal with former left-wing President Luiz Inácio Lula da Silva in October. Inácio Lula da Silva) confrontation.

“Paulo Guedes is overconfident in private investment,” said Mauricio Molon, chief economist at Logus Capital in Sao Paulo. “Business and market sentiment have no confidence in Lula or Bolsonaro. This will shelve a lot of investment.”

The government’s special secretary for the Investment Partnership Program, Martha Seillier, said that the success of the program so far is attributable to “project structuring” and the country’s historically affected bureaucratic policy on investors. A more friendly way.

This is in stark contrast to the government’s failure to pass its major economic reforms, including the simplification of Brazil’s Byzantine tax system and national administrative reforms. Insper political scientist Carlos Melo (Carlos Melo) said: “Paulo Guedes needs to prove to the market that they are taking action, they are doing something, and the government is not over yet, but that’s not how we feel.” “Feelings. Yes: What else can you get from the Bolsonaro government?”

Additional reporting by Carolina Ingiza