Massive new government growth programme announced

March 30th, 2010

Lula's public approval ratings stand at 76%. Photo: Agencia Brasil

Brazil’s government has unveiled a second rapid growth acceleration programme worth $890 billion, aimed at boosting the country’s economy and infrastructure.

The original so-called ‘PAC’ programme to the tune of $280 billion announced in early 2007 targeted 5% growth a year.

Apart from last year when Brazil suffered fallout from the global economic downturn, targets were met,  though the government and opposition dispute how much of the original programme has actually been completed.

The new programme runs between 2011-2014 and beyond. Projects are grouped into in six categories.

Oil and gas exploration projects will get $ 490 billion, two-thirds of the money after 2014, with $76 billion destined for electricity generation and $70 billion going into projects to drill Brazil’s vast untapped oil resources buried deep below the seabed.

Housing initiatives will get $ 154 billion. Last March, the government announced a $15 billion social housing programme, aimed at building one million homes, though it left the timetable open-ended. The new plan envisages the building of another two million homes. Brazil’s housing shortage stretches to seven million.

High stakes game

With Presidential elections in October, there is little doubt that ‘the son of PAC’ as it has been dubbed will be the flagship policy of the ruling Workers Party (PT) and its official candidate, Dilma Rouseff, who is aiming to become Brazil’s first woman president.

She takes on Sầo Paulo state governor José Serra, whose colleagues immediately attacked the new proposals.

The leader of the main opposition party (PSDB) João Almeida said the government should be re-evaluating the original programme, which he said is weak in management terms, with a low rate of projects being carried out.

“The launch of PAC 2 was an act of campaigning complete with crying and emotion,” he said.

But the government hit back saying the opposition is divorced from the Brazilian people and the interests of the country.

“The opposition only speaks about the election, denunciation, criticism, because they have no other plan,” said Cândido Vaccarezza, the ruling party’s leader in Brazil’s lower congress chamber.

The government says 40% of the original programme has been finished, insisting two-thirds of work on housing and sanitation has been completed, though this falls to 28% in the energy and logistics sectors. Opposition parties banding together say only 11% of work has been done, with the number falling to 4% in the northeast of the country, where it is most needed.

But so far any such talk has had little effect.

Recent reports that the president and his preferred candidate had toured the country together inaugurating unfinished infrastructure projects and that he made comments appearing to back Cuba’s oppressive stance towards dissidents have not dented his standing with the Brazilian public.

As the election approaches Dilma will be hoping to be swept along on a tide of approval from the new programme, as much as for outgoing President Luiz Inácio Lula da Silva, who continues to notch up astonishingly high poll ratings for a second-term president with only nine months left in office.

Dilma may have her work cut out though. A Datafolha poll published at the weekend showed Lula’s stardust has yet to rub off on her, with the vote between the main presidential candidates tied among those who would normally vote for the president.

Since declaring his candidacy recently, Serra has opened up a nine point lead over Dilma, having received an expected ‘bounce’ from the announcement.

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