Although I tend to be in favor of state participation in the economy for redistributive purposes, I do not think that assigning it a business role is necessary for this. In fact, it can even end up being counterproductive. Take, for example, the case of Petrobras. That is, a company in which the Brazilian State has a share package that allows it to control its corporate governance: that company was at the epicenter of the Lava Jato Case, that is, the largest corruption scandal in the history of Latin America. .

The scheme was later repeated in countries such as Peru, with cases such as the so-called construction club: private companies that, instead of competing, colluded to distribute overvalued contracts with the State, paying in return bribes for a certain percentage of the value of the contract.

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I specifically mention the case of Petrobras because, on the one hand, as a listed company, it allegedly provided public and reliable information on its activities. And, on the other hand, a good part of what was said happened under the government of the Workers’ Party (that is, a left-wing government that, however, allowed the capture of public entities by private interests).

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Another example would be the so-called “re-nationalization” in 2008 of Aerolineas Argentinas by the Kirchner government. The expropriated company submitted the matter to an arbitration before the ICSID, a body that ruled in its favor, forcing the Argentine State to pay both “the entire costs of the procedure” (including the plaintiff’s representation expenses) and US $ 320 million of compensation amount (the Argentine State claimed that, taking into account factors such as its tax debt, the company had a negative value). In turn, according to a BBC Mundo report from August 2013, until that date the Government had spent US $ 3.6 billion in subsidies for the airline. And, to collect the public debt, the Argentine State was subjected to processes of seizure of its assets abroad. Wouldn’t it have been better, for example, to allocate these resources to public spending on health and education?

But, in turn, one of the reasons why Pedro Castillo could win the presidency, it is the persuasive power of arguments that appeal to common sense. For example, maintaining that it is not right that, while we export most of the gas extracted from Camisea, in that same region there are people who still cook with firewood. And the Bolivian case shows that, for purposes such as allocating a greater proportion of gas production for domestic consumption, it is not necessary to expropriate the companies in the sector: although there were expropriation episodes, essentially what the Bolivian State did was to renegotiate contracts with the main companies in the sector (renegotiations that occur frequently in Peru, only usually in favor of companies that contract with the State).

The Bolivian example, however, also derives some caveats. The main one would be that the Bolivian State renegotiated contracts under conditions that were particularly favorable to it. First, it did so during the biggest rise in the international price of raw materials in half a century. Second, the corporate governance of the main affected companies, Petrobras and Repsol, was under the control of leftist governments in Brazil and Spain, respectively (which preferred to seek a negotiated solution rather than appeal to arbitration or the threat of sanctions) . Finally, Bolivian gas then accounted for about 5% of Brazil’s energy consumption. And, although tax revenues grew dramatically as a result of the renegotiation (allowing financing of social programs), the new conditions were not particularly conducive to attracting private investment after the super-cycle of raw materials came to an end.

In other words, when it comes to renegotiating contracts, the devil is usually in the details.



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