The belief that privatizing state-owned companies would modernize Brazil’s economy has failed to live up to its promises. In the past two decades, more than forty state-owned companies have been privatized , all justified by promises of efficiency and reduced public spending. Yet, citizens remain dissatisfied with the results: rising tariffs, workplace accidents, and poorly trained staff are the main concerns, turning this policy into a symbol not of progress, but of growing abandonment.
Furthermore, countries that are leaders in the international market, such as Germany and the United States, have already renationalized water and sewage services; however, Brazil insists on this policy.
Market dynamics of privatization
Privatization occurs when companies that provide public services are sold to the private sector; in other words, the State transfers ownership to a corporation that assumes responsibility for providing these services. Usually carried out through public auctions, the State sells part or all of its shares to private investors, resulting in the opening up of ownership to private investors and allowing most of the assets to be acquired by private enterprise.
The decision to privatize a public company involves factors that may range from economic logic to political-ideological preferences. Generally, leaders who advocate liberal policies support a free market, believing that less state intervention leads to more efficient management and, consequently, lower public spending, which means that, in theory, this action could improve the services for the community.
However, while privatization is often promoted as a way to reduce direct state intervention and stimulate greater market dynamism, it rarely eliminates centralized oversight, often operating through state concessions or resulting in private monopolies. This creates a paradox: while it can benefit markets by boosting efficiency and profitability, it also concentrates capital and production in the hands of a few, often neglecting broader public and social interests.
The Price of Denationalization
The main reason governments choose privatization is the possibility of no longer having to subsidize loss-making companies. In this way, it becomes possible to free up budget space to pay debts and redirect public funds .
In practice, however, the impacts are not always positive for the population. In many cases, privatization leads to higher tariffs or a reduction in the quality of basic services. The debate over advantages and disadvantages intensifies as new examples emerge across the country.
One of the most recent cases is the privatization of Sabesp (São Paulo State Basic Sanitation Company), which in 2026 resulted in a tariff increase of more than 6% as a consequence of inflation adjustments in previous months. Since the management change, reports of water shortages, discolored water, and untreated sewage being discharged into rivers became frequent, proving that this action does not always bring benefits.
In the transport sector, the concessionaire Trívia Trens faced criticism after an explosion in a train car on Line 12-Safira in July 2026. The accident paralyzed three other lines operated by the company and reignited discussions about the risks of privatization, questioning the São Paulo government’s decision to auction part of the railway network.
Even though some cases could be an accidental event, the true impact of privatization lies in the medium and long-term weakening of oversight and maintenance processes. Jefferson Mariano, professor and socioeconomic analyst at the Brazilian Institute of Geography and Statistics (IBGE), explains that under private management, staff reductions, layoffs, and changes in working conditions often undermine preventive maintenance of the railways, which is vital to avoid serious failures.
This weakening directly affects the execution of essential technical repairs, thereby harming part of the population that loses access to basic rights:
“It was a public service and it became a commodity. As a commodity, those without resources, those facing low wages or unemployment, will be left without water, without essential services.”, says the professor.
A Global Wave of Renationalization
More than 58 countries have already reversed course on privatization to sell public companies to the private sector. While major international powers are re-nationalizing enterprises that provide essential public services, Brazil appears to be moving in the opposite direction. In an election year, leading presidential candidates such as Romeu Zema, Ronaldo Caiado, and Flávio Bolsonaro include privatization in their government plans, as does São Paulo governor Tarcísio de Freitas, who is running for re-election with the same agenda.
Although the global trend favors public ownership, re-nationalization in Brazil faces much deeper barriers than wealthier countries. According to professor Jefferson Mariano, after more than 30 years of intense privatization, the Brazilian state lacks the budget to repurchase large operations such as Vale, whose current market value makes reacquisition financially unfeasible.
In addition, the country is experiencing a strong conservative wave, in which even low-income populations that depend on public services have voted for candidates aligned with liberal agendas aimed at reducing the size of government. Jefferson adds that this political configuration weakens the social and legislative support needed to approve renationalization processes:
“The very voter who will be harmed, the low-income worker, votes for liberal candidates who see reducing the state as salvation (…) and later they will be penalized because they will no longer have access.”
The debate over privatization in Brazil reveals a profound gap between liberal promises of administrative efficiency and the practical impacts felt in people’s daily lives. Without strong regulation and a genuine commitment from the state to protect citizens’ rights, the cost will continue to be disproportionately borne by the most vulnerable people.
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The article above was edited by Ana Rita Rodrigues Fernandes.
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