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LATIN AMERICA ADVISOR

LATIN AMERICA ADVISOR

A daily publication Of the dialogue

August 30, 2023

Will Brazil’s New Infrastructure Plan Boost the Economy?

Brazilian President Luiz Inácio Lula da Silva this month unveiled a new infrastructure plan designed to strengthen the country’s economy. // File Photo: Brazilian Government.

Q

  • Brazilian President Luiz Inácio Lula da Silva on Aug. 11 unveiled an infrastructure plan that includes nearly 1 trillion reais (nearly $200 billion) in spending. The plan revives an initiative that Lula first launched in 2007 after he was sworn in for his second term. The Growth Acceleration Program, or PAC, has attracted criticism, saying that similar large-scale programs in the past were never fully realized and led to massive corruption. How likely is the plan to receive legislative approval and attract partnerships with private companies? How is the initiative different from the one launched in 2007, and what are the main risks associated with it? Where are the funds expected to go toward, and which industries are set to benefit most?

A

Carlos J. Alsua, professor of practice in the Eller College’s McGuire Center for Entrepreneurship at The University of Arizona: “Brazilian President Luiz Inácio Lula da Silva recently made headlines by unveiling a massive 1 trillion real ($200 billion) plan for infrastructure. This Growth Acceleration Program, or PAC, is not exactly new. Lula took a stab at something like this in 2007, but it fell short and got caught up in accusations of corruption. What catches the eye is how this revived PAC echoes the Biden administration’s plans for bouncing back after the pandemic. They’re both big on infrastructure to get the economy humming again. That’s a big deal, and it’s worth watching how it plays out. But here’s where it gets worrisome: is this Brazilian plan opening the door to corruption? They’ve been there and done that with these large-scale projects, and often, they’ve ended up in some…”

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The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. Many of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe, click here. For terms and conditions, click here. For more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.
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