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President Jair Bolsonaro’s attacks and actions against state oil company Petrobras have weakened the company just as it has been successful at boosting profits and reducing debt. (Photo: Petrobras)
The Brazilian government in June privatized state electricity company Eletrobras through a $6.9 billion share sale. Here B3 stock exchange marking the event June 14 attended by President Jair Bolsonaro. (Photo: Alan Santos/Brazil President's Office)
Monday, June 27, 2022

Brazil: The Top Events Past Decade

Latinvex singles out the key events in Brazilian business the past decade.


Brazil has seen a lackluster decade when it comes to economic growth, although it has seen some impressive achievements in terms of business milestones as well as some major negative developments.

The economy, Latin America’s largest, grew on average 0.4 percent in the ten-year period from 2012 through 2021, according to a Latinvex analysis of data from the International Monetary Fund (IMF).


The past ten years also saw the dramatic decline of state oil company Petrobras due to political intervention and a massive corruption scandal.

The political meddling started under President Dilma Roussef (2011-2016) but has returned under President Jair Bolsonaro.

For political reasons, the Rousseff government-directed Petrobras to sell fuel below international parity, triggering some $40 billion in losses during the years 2011-2014.

“Brazilians are now comparing Bolsonaro to Dilma Rousseff, his Workers’ Party predecessor, for his intrusion into the affairs of Petrobras,” the American Enterprise Institute said in a blog post in February last year. “The difference is that Bolsonaro actually ran as a market liberalizer; Rousseff did not.”

Rousseff’s successor, Michel Temer, restored confidence in Petrobras, appointing a well-respected CEO (Pedro Parente), who implemented market-oriented fuel policies and started a massive selloff of assets to reduce the large debt burden created during Rousseff’s government.

Meanwhile, under Rousseff and her predecessor Luiz Inacio Lula da Silva, Petrobras also was the center of a massive corruption scheme  discovered as part of the federal police probe known as Car Wash, which also implicated construction giant Odebrecht.

The Car Wash probe started in March 2014 and led to the arrest of Paulo Roberto Costa, former director of refining and supply at Petrobras, who subsequently told investigators about the widespread corruption at the oil giant. The scheme involved skimming some $3.9 billion from Petrobras contracts and sharing the proceeds with corrupt officials and legislators between 2006 and 2012.

During his time as CEO, Parente implemented strict new governance rules to avoid future corruption. Parente’s turnaround led to increased profits and reduced debt and in 2017 Latinvex named him CEO of the Year.

Parente’s policies were continued under Roberto Castello Branco, who became CEO of Petrobras in January 2019 after being named by Bolsonaro. Yet, despite the clear recovery at Petrobras, Bolsonaro in February 2021 decided to fire Castello Branco after disagreements over the company’s fuel policy. The move shocked investors and was seen as a serious blow to Bolsonaro’s credibility as a pro-business leader. After announcing the move late on a Friday, Petrobras lost a whopping $13 billion in market capitalization Monday. That followed previous losses of $5.2 billion on speculation that Bolsonaro would fire Castello Branco.

Completely unrepentant and ignorant of the damage he caused Brazil’s and Latin America’s largest company, Bolsonaro has managed to repeat the feat twice – so far!

In March this year he fired Joaquim Silva e Luna, whom he had named as Castello Branco’s successor. He then appointed Jose Mauro Coelho, but fired him as well in May. Just as with Castello Branco, the reason was that the Petrobras CEOs refused to change the company’s market-driven fuel policy.

The damage wasn’t limited to those three firings. Bolsonaro’s candidate to replace Silva e Luna, Adriano Pires, had to resign in April after he acknowledged he could not resign from all his consultancy business at the CBIE consultancy he had founded. Meanwhile, Bolsonaro’s candidate as Chairman of Petrobras, Rodolfo Landim, also withdrew his nomination. Both developments caused additional and unecessary instability at Petrobras.

Bolsonaro’s weakening of Petrobras has not only come from ousting its CEOs, but also constantly attacking its profits. “Your profit is like a rape, it is absurd,” Bolsonaro said during a weekly livestream on social media in May, according to Reuters.

Bolsonaro thus ignored the fact that a healthy Petrobras means solid tax revenues and no need for the government to cover losses, as in the past. During the four-year period from 2014 to 2017, Petrobras lost a combined $21 billion. Since 2018, it has been able to post profits totaling $27 billion, including last year’s record $19 billion, according to Latinvex research. In the first quarter this year, profits jumped more than 40 times to $8.9 billion.

The result: Petrobras has become one of the most unstable oil companies in the world despite doing everything right from a business point of view.


In one of the most important events the past 10 years, the Brazilian government in June privatized state electricity company Eletrobras (the largest electricity company in Latin America) through a $6.9 billion share sale. It was the largest privatization in Brazil in two decades and the second-largest ever after the 1998 privatization of state telecom company Telebras.

The Eletrobras deal marks one of the biggest achievements in the divestment program of Bolsonaro, Bloomberg reports. 

The sale came after repeated delays and fears that the process would not be possible too close to the elections. Bolsonaro’s key rival and likely winner of the elections, former president Luiz Inacio Lula da Silva, opposed the privatization.

Another major achievement was getting Congress to approve a historic pension fund reform in 2019, which aims to generate savings of 800 billion reais (US$197 billion) over the next decade through a range of measures like raising the retirement age and increasing workers’ contributions.

The highly-anticipated pension reform was finally passed thanks to pro-business legislators led by then-Congress Speaker Rodrigo Maia. Bolsonaro had done practically nothing to secure the votes, instead concentrating most of his time insulting foreign leaders like French president Emmanuel Macron, Hollywood actor Leonardo di Caprio and environmental activist Greta Thunberg. All three in large part due to their criticism of Bolsonaro’s environmental policies which have led to a 100 percent increase in deforestation in Brazil’s Amazon, according to Reuters.

Bolsonaro’s lack of leadership resulted in other key reforms such as tax and administrative overhauls being delayed The frustration with Bolsonaro was voiced by several prominent bankers interviewed by the Financial Times in a 2019 story headlined “Brazil reforms: has Jair Bolsonaro missed his moment?”


One of the most positive trends to come out of Brazil in the past decade was the boom in initial public offers.

Last year, 45 IPOs were listed on the Sao Paulo stock exchange B3, raising $12.2 billion, or 35 percent more than all the Latin American IPOs during 2020. “The depreciation of the Brazilian real against the U.S. dollar, thereby reducing the U.S. dollar equivalent prices of Brazilian assets to foreign investors, and changes in monetary policy to reduce interest rates have played an important role in fostering equity capital markets activity, by incentivizing investors to shift their focus from debt products to equity securities,” Isabel Carvalho, Office Managing Partner of Hogan Lovells in Sao Paulo, pointed out in a Latinvex article.

The $5.7 billion IPO from BB Seguridade in 2013 still ranks as the largest offer, but last year’s $2.6 billion offer from digital bank Nubank ranks among the top three (along with the $2.7 billion IPO of PagSeguro in 2018). 

Nubank has the highest market capitalization among Latin American listed banks and the 4th-highest among Brazilian companies, G1 reports. As a result of the successful leadership at Nubank, Latinvex named David Velez CEO of the Year in 2021. 


After years of interventionist policies during President Rousseff (2011-16), followed by pro-business policies under Michel Temer (2016-18), investors had high hopes for Bolsonaro when he assumed office in January 2019.

In addition to pledges of pension and tax reforms, Bolsonaro appointed a solid economic team, including economy minister Paulo GuedesRoberto Campos Neto as Central Bank president, former finance minister Joaquim Levy as head of Brazilian development bank BNDES and  Roberto Castello Branco as head of Petrobras.

But Levy resigned in June 2019 after the Brazilian president had threatened to fire him over a trivial hiring issue and Castello Branco was fired last year over a dispute over fuel prices. In both cases, investors were unhappy with Bolsonaro’s handling of his well-respected officials.

Rubem Novaes, who Bolsonaro named president of state bank Banco do Brasil, resigned in July 2020, in part because of disappointment that Bolsonaro vetoed plans to privatize it. His successor, Andre Brandao  quit in March last year after clashing with Bolsonaro over an austerity drive. Brandao spearheaded a plan to shutter some 200 branches and let go more than 5,000 employees to streamline operations and generate millions of dollars worth of savings by 2025. The move, announced in January, was cheered by investors but quickly drew the far-right president’s ire, who publicly criticized the bank, Bloomberg reports.

However, if there was any doubt about Bolsonaro’s lack of commitment to market economics, they were dispelled when he decided to lift the spending cap, considered vital to keep fiscal balances and a minimum of investor confidence.

After the government abandoned its pledge to respect the spending cap, analysts now see a continued and protracted period of rising inflation, rising interest rates, credit contraction and a slowdown of economic growth, Valor Economico reports.

For investors it was bad enough that Bolsonaro decided to lift the spending cap in an apparent move to boost government spending ahead of next year’s presidential elections where he is seeking re-election.

But making matters worse, was that his economy minister Guedes – considered a fiscal hawk and austerity proponent – went along, leading to resignations among his top staff. Guedes continued to lose credibility by playing down the dangers. Even when the third quarter GDP declined, he downplayed that as well.

“Governance in Brazil is being tested and has been loosened,” André Lion, partner and equity manager at Ibiuna Investimentos, told Valor Economico. “This impacts the stock market.”

The Brazilian stock exchange B3 has suffered. The Ibovespa index of the Brazilian stock exchange B3 had the world’s second-worst performance last year, according to Austin Rating data quoted by G1. Only Venezuela fared worse. Brazil’s poor performance is driven by the loss of confidence in the future of the economy, with investors worried about the fiscal environment, says the chief economist at Austin Rating, Alex Agostini, author of the survey.

Among the victims: Brazil’s incredible IPO boom, which started to taper off in August.


Meanwhile, a widely anticipated oil auction in November 2019 (Brazil’s largest ever) ended up disappointing as high prices and the dominant role of state-run oil company Petrobras scared off global oil majors and instead resulted in interest from Chinese state firms CNOOC and CNODC.

“Total disaster is the best way to describe this morning’s round,” Ivan Cima, a managing director at consultancy Welligence told Reuters, referring to lack of private participation and the loss of $9 billion in potential signing bonuses to be received by the government. “The round was doomed by high signature bonuses, the overly complex and non-transparent Petrobras reimbursements, and marginal economics.”

Even  worse: Brazil missed a historic chance  to attract investments, oil industry leaders say. Foreign oil companies that did not join the November auction and a subsequent one are also unlikely to bid next year, as they have decided to invest elsewhere, BP’s Brazil president told newspaper Valor Economico. (Reuters has a summary in English).


In 2013, Latinvex singled out the fall of mogul Eike Batista as one of the key negative developments in Latin America.

“The meltdown of former high-flying mogul Eike Batista’s empire stands out as the worst business news out the region this year,” we noted. “It includes the bankruptcy of oil company OGX, the largest ever in Latin America, and ship builder OSX. The fall is dramatic because Batista, who at one point boasted he would surpass Mexican mogul Carlos Slim as Latin America’s and the world’s richest man, was seen as a symbol of the New and Successful Brazil.”

In 2017, Batista was arrested as part of the Car Wash probe into money laundering and corruption. He was released pending trial but in early 2018, he was convicted and sentenced to 30 years in prison for paying a $16.5 million bribe to now-imprisoned former Rio de Janeiro Governor Sérgio Cabral in exchange for state construction contracts.

Batista probably won’t ever return to his glory days, although it can’t be ruled out, neither, a new biography of the former mogul says.

© Copyright Latinvex


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