For Sérgio Lazzarini, from Insper, “interference for political or populist purposes” causes “a growing scenario of uncertainty”
Sergio Lazzarinia professor at Insper who studies the relationship between governments and the private sector, said that the Executive's interference in state-owned or publicly traded companies has caused uncertainty in the economy.
“The accumulation of interference for political or populist purposes, as we have seen in the past, is creating a growing scenario of uncertainty. What will be the next state-owned company, company or sector that will be the target of these interventions? And uncertainty is fatal for companies’ investments, planning and productivity”, he declared in an interview with the newspaper The globe published this Wednesday (27.mar.2024).
Lazzarini cited Petrobras as an example. He stated that he saw in the public debate the argument that, as the company is controlled by the government, Planalto would have the right to exercise its role as controller and that the market seeks to impose what it considers best for its interests.
“This is all a misreading of the situation“, he said. “State-owned companies, even those with majority state control, belong to the State, not the incumbent government. They should follow what is established in the law that guided their creation, what is defined by their statutes, what is regulated by applicable corporate laws and what is recommended by control and regulatory bodies.”, he added.
According to him, a state-owned company “You can and should” follow public and social objectives, as long as they are anchored in a statute.
“The best state-owned companies in the world do this, including those with mixed capital and traded on the stock exchange. If the objectives are clear and institutionally anchored, private investors perceive a less uncertain scenario for investing in the state-owned company and its sector. And continue the game”, he declared.
The professor said that governments, on several occasions, “prefer to direct companies to satisfy their political base and the vision of their supporters”, without realizing that the action harms them. He stated that this could be the situation facing the president Luiz Inácio Lula da Silva (PT).
“The current government and its supporters defend the current interventions, but they will certainly not like it when a new government with a different ideological orientation takes over and intervenes“, he said.
Lazzarini stated that government intervention in state-owned companies is something that is spreading in many countries and covers different political spectrums.
“Politicians have generally discovered that badmouthing big companies and markets can get them attention and votes.s”, he stated. “However, in countries with stronger institutions, there are fewer intervention channels and more barriers“, continued.
“In Brazil, some remedies, albeit imperfect, were created. The Law on State-Owned Companies attempted to create more technical mechanisms for appointing managers and was accompanied by monitoring actions by state-owned companies. However, little by little, these advances are being eroded”, he concluded.
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