State-run enterprise spending rose 277% between 2002 and 2010

According to a report from the Department of State-Run Enterprise Coordination and Governance (Dest), which is housed in the Ministry of Planning, Budget and Management, total spending (“investimentos”) by Brazil’s state-run enterprises (“estatais federais”) in 2009 was slightly more than R$71 billion, compared to almost R$19 billion in 2002. Dest says that spending is scheduled to reach R$94 billion in 2010.

In its breakdown of the spending, Dest found that between 2002 and 2006 state-run enterprise spending increased between 13.5% and 16.7% annually, but spiked after that when the Luiz Inacio Lula da Silva administration launched the Accelerated Growth Program (PAC). In 2007, the increase in spending was 21.2%; in 2008 it was 34.4%; and last year slightly more than 33%.

The Dest report also shows a sharp rise in civil servants during the same period. In 2002, there were 370,548 of them; at the end of 2008 that number had risen to 460,866. It is estimated that in 2009 the number rose another 20,000 with the creation of four new government-run companies: Energy Research Corporation (Empresa de Pesquisa Energética) (EPE); Biotechnology and Blood Bank Products Corporation (Empresa Brasileira de Hemoderivados e Biotecnologia) (Hemobrás), Brazil Communications Corporation (Empresa Brasil de Comunicação) (EBC); and the National Center for Advanced Electronic Technology (Centro Nacional de Tecnologia Eletrônica Avançada) (Ceitec).

The Brazilian government has direct or indirect control (“participação”) in 119 state enterprises that range from petroleum and natural gas, electricity and telecommunications to transportation (subway and urban bus systems, highways and airports) to basic sanitation and water to financial institutions, such as the Banco do Brasil (the country’s largest) and the Caixa Econômica Federal (a savings and loan bank).