Privatizing Petrobras, an open letter to Minister Guedes

Dear Minister Paulo Guedes,

Petrobras going fully public is for sure an interesting idea for quick and new investments specifically now that the oil price has surged and taking the long view of the growing importance of clean and renewable energy that’s irreversible.

In my modest opinion, there is a major setback we must consider now: the political reform has to come ahead of the State reform for the reason that the State mirrors the state of politics (Carl Schmitt) and to reform the second before the first will never work.

In simple terms, you (like me) would like to get rid of Petrobras to invest in human capital, the only capital of the present and the future. The concept can’t be more noble or intelligent. We would get two dishes with one shooting (to shoot birds is not right anymore), but without the political reform, there is no assurance the right investments in human capital will happen with the desired effects. This is critical.

Public education like all other State efforts and institutions focusing on the base of the Brazilian population is not serious unless we unleash a political reform to free public institutions like those linked to education, health, and similar ones from the claws of bad politicians, a minority set of Congress and the Brazilian political life in general, but very active and capable of so many wrongdoings that daily news are full of endless corruption cases, most of them thank God under investigation of the Federal Policy.

We need first to assure that the law will quickly put its hands on bad politicians all over Brazil before we divest from good assets like Petrobras to invest in public education for the base, an idea that probably counts with the support of the whole society, but to be fully efficient needs to come after a deep political reform.

Public education, public health, and similar institutions all need a business approach like Embrapa has achieved in agriculture with hundreds of PhDs, Masters, and technicians all working in the same productive direction. We won’t see this happening in Brazil before a deep political reform. First things first!

The base of the pyramid is not properly represented in Congress. A few studies indicate they have at most ten percent of Congress seats while they represent fifty percent of the population at least. This lack of representation leads to all sorts of wrongdoings in politics and missing focus, what you don’t see in public institutions like Embrapa, the Central Bank, and others that the focus is not to serve the base of the social pyramid. 

In these cases where the political representation exceeds the share in population, we have the highest global standard institutions, which proves again the importance of the political point I am bringing to your attention.

There is another point that is relevant too: a public education reform like what is being considered in Japan right now with focus on Math, languages, computer, and digital skills, complemented by a few variable disciplines according to ages groups and interests should also precede major public investments in education, because public education in Brazil like many other countries right now is mirroring the past not the future.

Our Alma Mater (Chicago) is a strong academic institution at least in three areas: Economics, Education (in special the importance of developing human capital thru education) and Political Science, which is a very beautiful blend.

Warmest regards