Anabel Teixeira, senior associate for Brazil and the Southern Cone at McLarty Associates: “Brazilian states’ longstanding debt to the federal government is an issue that originated in the 1970s due to Brazil’s highly centralized fiscal management. Over time, it has hindered states’ ability to generate tax revenue independently, leading to a reliance on federal loans. After yet another round of negotiations with the indebted states, the finance ministry introduced a proposal conditioning debt reduction on states investing saved funds into technical secondary education through the Interest Rates for Education Program (Programa Juros por Educação). Participating states can choose lower interest rates of 2 percent, 2.5 percent or 3 percent, with the lowest rate contingent on allocating 100 percent of savings to investments in secondary technical education by 2030. Finance Minister Fernando Haddad, formerly the minister of education during President Lula’s first and second terms, aims not only to alleviate fiscal strain but also to…”