The most likely leftist contender in Brazil’s presidential race, Ciro Gomes, is warning investors to hold off buying state assets in the energy sector because he would expropriate them if he wins in October.
That includes rights to oil fields granted last year and a legislative push to dilute state control of Centrais Eletricas Brasileiras SA, or Eletrobras, the country’s largest power utility.
“What I want to say is: ‘Don’t buy. Wait a bit,'” Gomes said in an interview on Thursday in which the former governor of Ceara state detailed plans to raise taxes on wealthy Brazilians, reduce the country’s hefty public debt and change the Central Bank’s sole focus on fighting inflation.
Gomes maintains that President Michel Temer is illegitimate because he took office in the controversial impeachment of leftist Dilma Rousseff, arguing that his policies should be revised by the next government elected by the Brazilian people.
Gomes will benefit the most if former President Luiz Inacio Lula da Silva, Brazil’s most influential politician, is barred from running due to a corruption conviction.
A Datafolha poll in January showed that if Lula cannot run, Gomes would have 13 percent of voter intentions in a field led by far-right candidate Jair Bolsonaro with 20 percent.
Gomes expects to at least double his standing if he becomes the standard bearer of the left and hopes to win the backing of Lula’s Workers Party, which could provide his running mate, he said.
While he would roll back many of Temer’s market-friendly policies, Gomes said he was no “juvenile leftist.”
Oil companies that won concessions last year in Brazil’s pre-salt offshore region, including Royal Dutch Shell Plc, Exxon Mobil Corp, Statoil ASA and Total SA, would be compensated when the state revokes their contracts, Gomes said.
Even though he would redirect public spending to boost the economy and reduce social inequality, Gomes vowed he would be fiscally responsible.
“I will pay the debt,” he said, adding that it would take several governments to do that, but he would start the trend.
If elected, he plans to levy taxes on profits and dividends, while increasing inheritance taxes.
Gomes thinks his main rival will be center-right candidate Geraldo Alckmin, the governor of Sao Paulo. However, Gomes said he would relish the chance to face Bolsonaro, a pro-gun, anti-gay former army captain whom he called a “right-wing scarecrow.”