Brazil · Politics Zema privatization of Brazil’s two largest state-owned enterprises took center stage this month as presidential pre-candidate Romeu Zema formally launched his 2026 economic platform in São Paulo.

The Zema Privatization Blueprint Romeu Zema, the former governor of Minas Gerais state and a member of the Novo party, first floated the idea in an April 26 Instagram video.

He formally presented the plan on July 18 at the 10th National Meeting of the Novo party.

The proposal calls for selling Brazilian oil giant Petrobras and lender Banco do Brasil as a starting point.

Zema then aims to privatize every federal state-owned enterprise without exception.

Petrobras is the world’s largest oil producer by output and a symbol of Brazilian industrial might.

Banco do Brasil, one of the country’s oldest financial institutions, holds a vast network of accounts and credit operations touching millions of citizens and businesses.

For foreign investors, these two firms are pillars of the state’s direct involvement in strategic sectors.

Selling them would mark the most radical redefinition of Brazil’s economic model in decades.

Funding Infrastructure, Not Paying Bills Zema argues that revenue from the sales must build roads, railways, waterways, and ports.

He explicitly ruled out using the money to pay Brasília’s bills.

He claims the federal government spends more than it collects, creating a debt near R$9 trillion (US$1.77 trillion).

Privatization, he says, would cut corruption and lower interest rates.

The distinction is crucial for his campaign narrative: he wants voters to see the sell-off as a long-term investment in the country’s notoriously bottlenecked logistics network.

Brazil’s infrastructure gap has long been cited by exporters and agribusiness as a primary brake on competitiveness.

By ring-fencing the proceeds for ports and highways, Zema hopes to appeal to the powerful farm caucus and industrial sectors that lose billions annually to clogged transport routes.

For expats and foreign traders, smoother logistics would directly lower the cost of moving goods from the interior to global markets.

Milei-Style Shock Therapy for Brazil The economic plan is coordinated by Carlos Da Costa, a former secretary to Paulo Guedes under ex-President Jair Bolsonaro.

It is structurally modeled on Argentine President Javier Milei’s aggressive free-market reforms.

Zema wants to eliminate the so-called ‘Custo Brasil,’ an estimated R$1.7 trillion (US$335 billion) annual drag on production.

He blames tax complexity and high capital costs for the inefficiency.

The ‘Custo Brasil’ encapsulates the extra expenses businesses face in Brazil that they would not encounter in more efficient economies.

For international companies weighing a Brazilian expansion, this cost is often the invisible wall that makes the market uncompetitive.

By invoking Milei’s name, Zema signals to investors that he would pursue a no-compromise deregulation agenda.

However, Brazil’s fragmented political system requires constant negotiation with a sprawling Congress, making a pure shock-therapy approach harder to execute.

Steep Political and Legal Hurdles The proposal has drawn sharp criticism from the left-wing Workers’ Party (PT) and other groups.

They view Petrobras and Banco do Brasil as strategic national assets.

Privatizing Petrobras requires a constitutional amendment, a heavy lift without a broad coalition in Brazil’s Chamber of Deputies and Senate.

The sheer size of the entities would also make any sale a complex multi-year process.....