Home Brazil States Rio’s financial crisis and the defy of privatizing basic services

Rio’s financial crisis and the defy of privatizing basic services


Writing to the World Politics Review (New York), Ciara Long anticipates the kind of difficulties that Rio de Janeiro state government will face to put its finances in order (with a deficit of $2.9 billion, the state declared a financial emergency in 2015, as well as other states did, like Minas Gerais and Rio Grande do Sul).

To avoid Rio’s financial collapse, decision was taken that its water and sanitation company (CEDAE) should be privatized (its not real privatization, but a concessional contract with a private company, under government supervision). But the author alerts to an important question: what to do with thousands, maybe millions, of people who simply can’t pay for such basic services?

But there are much more than just the poor. There is also the politicians (always eager to grab something from state companies, that says brazilmonitor.com, not the author) and the labor unions. Everybody wants their piece of the cake, but up to now nobody really mindedto offer a good public service at reasonably prices. Truly, CEDAE’s inefficiency is well known, and some favela’s “raw sewage waterfalls are a symbol of state neglect for residentes”, as ell a symbol of the state’s financial impotence.

Read Ciara Long’s article