It is not new that governments use successful public companies to leverage electoral campaigns and guarantee a seat in the Legislative and Executive branches throughout Brazil. President Jair Bolsonaro’s case with Caixa Econômica Federal is emblematic and deserves attention due to the contradiction in his actions.
Caixa is a 100% public bank recognized as important, with market rules and regulations and which has had exceptional profits for the last 17 years. Excluding the BRL 5.5 billion advertised by the government as profit and which were, in fact, proceeds from the sale of Caixa Seguridade and Banco Pan – BRL 5.3 billion were, in fact, the company’s profit in the first half of 2021.
This data is essential because it proves that the government’s strategy of appearing to be strengthening the bank, inflating profits with assets sold and then selling the most profitable subsidiaries.
:: Caixa makes 160 years at risk of privatization and with protests from employees ::
These maneuvers will, in fact, lead to the end of Caixa Econômica Federal, the bank responsible for the operationalization of public policies that make the populations of places historically abandoned by the public authorities to have some sigh of hope.
The privatist adventure of Paulo Guedes and his gang doesn’t make any sense at all when we talk about Caixa. Even more so when the President of the Republic himself uses the Caixa numbers to try to win votes.
A few days ago, the Central Bank granted operating authorization to Caixa Distribuidora de Bonds e Valores Mobiliarios (DTVM). The news should be celebrated by all Brazilians if it weren’t for the unintelligent plan announced by the bank’s president, Pedro Guimarães.
His idea is to transfer the assets of the asset and make the IPO (Initial Public Offering of shares) of the business in early 2022, selling one of the most strategic parts of the bank, which posted a profit of R$ 2, 1 billion in 2020.
:: Basic income is only possible because “they haven’t privatized everything yet”, says Tereza Campello ::
Can you imagine a private bank doing this kind of business: selling something profitable? It’s the exact opposite of what the market does.
When a bank creates a subsidiary and this new company makes a profit, it invests even more in this project. But the Bolsonaro government is moving to sell off the best assets. This action may seem harmless, a form of bank modernization that will not affect many people’s lives. Is not true.
Caixa is in charge of the Employee Severance Indemnity Fund (FGTS). Without it, millions of Brazilians would be unprotected during economic crises.
In the extreme case, as we are living with covid-19, only Caixa, a public bank, would be able – as it is – to “run” the entire country and bring emergency aid and other social benefits to more than half of the Brazilian population. Not to mention housing and sanitation projects, issues that the private sector does not usually attach much importance to.
Little by little, the government is dismantling Caixa. Caixa Seguridade’s IPO in early 2021 raised awareness about how the sale of the bank’s important arms could compromise the institution’s future performance and, therefore, put at risk dozens of historic social programs – which have changed their face. in Brazil through income transfer, job creation, access to home ownership and education, among others.
The same can happen with Caixa DTVM, which was created with the promise of opening to the market. And also with Caixa Cards, Caixa Loterias and the not yet officially created Banco Digital, which are the next subsidiaries in the sights of Pedro Guimarães and Bolsonaro.
These ill-advised decisions in the privatization booklet are already bringing losses to Brazil — weakening Caixa and, consequently, social programs. This is a totally wrong step for those who intend to use the bank to gain votes and, at the same time, prepare the sale of other subsidiaries.
To compensate for the lack of resources generated by the profitable areas of public companies that have been sold, the government mistakenly adopts countercyclical measures at the expense of the population, such as releasing the FGTS to pay debts and encourage consumption, creating a credit line for beneficiaries of social programs, rather than expanding emergency aid.
Even the lines of credit for small and medium-sized companies – such as the National Program to Support Micro and Small Businesses (Pronampe), which should have easier access for the segment – have been used as a political bargaining chip.
This is a real dilemma. If society does not mobilize, this could be the fatal blow to Caixa, making our country one of the few potential “economic giants” that renounced the privilege of having a strong public bank capable of mobilizing a nation of continental dimensions.
A bank that has already proven to be essential and that can contribute even more to reducing the enormous and absurd social inequality that shames us so much and that needs to be resolved.
*Sergio Takemoto is president of the National Federation of Personnel Associations of Caixa Econômica Federal (Fenae)
** This is an opinion piece. The author’s vision does not necessarily express the editorial line of the newspaper Brasil de Fato.
Edition: Leandro Melito