Brazil averts “Oil Curse” by removing disparity, says Sergio Machado

For centuries, countries with wide reserves of oil and petroleum have largely concentrated majority of power and money with themselves. But along with it comes a never ending fear of preserving it. Such countries have always been at the helm of wars and constant civil insurgency. Maintaining political and economic stability has been their major concerns. This is what is referred to as the infamous “Oil Curse”.

Various cynics and so called industry experts have voiced their opinion about “Oil Curse” hitting Brazil, which as of now, holds a high amount of oil reserve. Sergio Machado, on the contrary, has a different opinion to this. He projects Brazil to be the country that would dodge the oil curse and progress. This is because in Brazil, oil has been the harbinger of opportunities. The presence of oil reserves have improved the Brazilian economy and created employment for thousands of people. At the core of these benefits is the fact that in Brazil, economic growth is shared proportionally by all the sectors, in fact a little bit more by those in immediate need of a social upliftment.  This helps in reducing the economic disparity.

Presence of oil in Brazil has given rise to the production of oil rigs and carriers. Brazil could undermine its potential and incur heavy losses by importing ships or could make the ships domestically and facilitate growth. President Lula had a vision in this regard. That is what led to the launch of Promef - The Program for Modernization and Expansion of the Fleet. This initiative completely changed the shipping industry of Brazil. It overhauled the industry and strengthened Brazilian economy. Also, Promef led to a creation of thousands of jobs in the shipping industry.

Brazil holds the world’s 4^th largest of portfolio in oil and fifth largest portfolio of ships in general and the shipping industry employs a work force of more than 60,000 people.

Brazil’s shipping industry revival highlighted in Financial Times

Under the leadership of Sergio Machado, Brazilian shipping industry has resurfaced and that too in a stronger stance. Its position is better than it has been in the last few decades. In fact, it wouldn’t be wrong to call it an overhaul of the industry. And at the helm of this turning of tables is Sergio Machado, President, Transpetro. Brazilian President Lula envisioned a strong shipping industry for Brazil and started the Program for Modernization and Expansion of the Fleet (Promef) of Transpetro. On the launch of 49 vessels made under this program, Transpetro, Naval industry and Brazil found its mention in the Financial Times, one of the world's leading economic newspapers.

Before Promef came into being, the last order furnished by Petrobras was 23 years ago. By launching its first vessel titled Suezmax, Promef has confirmed the rebirth of Brazilian Naval Industry.

"In Brazil, we do not have the choice of whether or not to have ships. We have to choose whether they will be ours or not," said the president of Transpetro, Sergio Machado.

In fact, the rebirth of the shipping sector is so expansive that from only 2,000 employees in year 2000, it now has a workforce of over 60,000 people. In the first 2 stages of Promef, Transpetro completed the bidding of 46 ships out of a total of 49 and 38 of these have already been hired. Since the revival of shipping industry has opened up a number of job options, there has been a spike in the number of Brazilians joining the workforce, hence contributing to the national economy. Participation of Asian companies in the creation of Brazilian shipyards is a proof that the shipping industry of Brazil has great prospects.  

Sergio Machado talks about the importance of Promef

Under the lead of President Lula, Brazil witnessed a program aimed at the revival of the country’s shipping industry. Titled Promef, the program was incepted to breathe life to the dormant naval industry of Brazil which had been weighing heavily on the economy. The situation was pressing. With every financial cycle, Brazil was losing out on opportunities to prosper. So, creation of Promef and its success in the years to follow had become the need of the hour, says Sergio Machado, former president, Transpetro.

There was an urgency to renew the entire maritime fleet to stabilize the Brazilian economy. In fact, the average of the fleet was 23 years old majority of them were single hulled. This meant that these ships could not meet the international safety standards and environmental requirements and thus could not ply on international waters. This was the short coming which stopped Brazil from competing on a global level, emphasizes Sergio Machado. So, Brazil had no option but to charter foreign vessels for its international export and import. This created an annual deficit of USD 6 billion.

Launching Promef was the most sensible decision. It was well thought and well planned. Above all, it was well facilitated and supported by the resources available in the country. Brazil had areas where shipyards could be constructed. Metallurgical industry was more than sufficient to supply the raw materials and there was an abundance of human resource. The odds were in favor of Brazil. In the results were supremely impressive. Promef caused an entire overhaul of the shipping industry and reinstated its stature on the global front. Brazilian Naval Industry is on an extremely prospective path and shall continue to help Brazil emerge as a stronger nation.

Growing Brazil needs to incorporate more detailed planning

Brazil is on an upward journey. It has been placed better than various strong economies in the world. The uprising development in major parts of Brazil has created millions of job opportunities for the citizens. Development and growth have never walked so much in sync in Brazil. But this must shift our focus to a few decades from now when the population will increase, there would be more number of people living in metropolitans and the demand for developed infrastructure would be at an all time high.

Jose Sergio de Oliveira Machado, the former President of Transpetro remarks that the biggest challenge would be to develop cities which would accommodate a large number of people. Along with that, there would be a need to develop a robust transport system and appropriate routes and roads. There needs to be better planned and bigger roads to facilitate for a smooth flow of traffic. The amount of number of vehicles being registered is huge and the so are the spikes in these statistics. So, Sergio Machado opines that it is wide to plan extensively in advance. He further says that these problems are not the ones that could be dealt with mere improvisation and immediate reactions.

The traffic, which is already a problem in some cities, tends to become worse, causing damage to the environment, the welfare of the residents and the economy. A study by Citigroup, for example, an estimated 5% loss of productivity of the Brazilian economy because of traffic jams.

These problems are basic impedances to the development spree. Therefore, it is wise to account for such changes in the long run and then plan accordingly. In a country like Brazil, it is necessary to get the base correct. The foundation of such development and planning has to be precise and yet flexible.

It isn’t a bad idea at all to rope in the best brains of the world. Let us learn from the mistakes other countries have made and not repeat them. It is good to learn from mistakes but even better to learn from somebody else’s mistakes. 

Sergio Machado emphasizes on better training of the human resource in Brazil

The world is at a crossroads again. The prevalent global situations have paved in a way for countries like Brazil to carve a niche for themselves. The first world countries are in a fix with regards to the availability of fuel and energy and their dependence on countries like Brazil has increased more than ever. Jose Sergio de Oliveira Machado, former President of Transpetro, says that as of now, on the global front, Brazil is placed better than most of the European Nations which had come together to form The European Union.

From oil to ethanol and bio fuel, Brazil has abundance of all the energy forms that the world currently depends upon. So now that we know there is a wide array of opportunities open, Brazil must prepare itself intrinsically in order to be able to make the most of the scenario.

SergioMachado elaborates that Brazil does not have any shortage of labour, but what it really is short of is the presence of ‘skilled labour’. This brings our focus to the major issue of creating more job opportunities for people and employing them. But to address this problem, the preliminary layers need to be strong enough. There is a dire need to educate people and train them in particular crafts and expertise. This trained human resource will make Brazil ready for the impending upward journey it is bound to undertake.

Brazil needs to make its people acquainted with latest and popular technologies for the world is being governed by the advancements in the technological sector. The manifestations of technology in the lives of people has been far more elaborate and deeply ingrained. There is no dearth of examples of countries which have escalated to a whole new level by embracing and imbibing technology in their basic functionalities. The so-called Asian Tigers are the perfect examples to substantiate the argument. Countries like Japan, China and South Korea have been leading the bandwagon of technological innovations and they have achieved productivity and international competitiveness.

Increased migration to Northeast Brazil indicative of a new dawn, remarks Sergio Machado

Famous Brazilian poets including Patativa do Assaré have, for long, in their poems, lamented for having left Northeast Brazil and migrate to South. Their constant desire to go back to their native land has been clearly expressed in their works. And perhaps this has led to a focus shift among people. There has been an increase in the number of people who are migrating to Northeast from Southern regions. This has majorly been spiked because of the growing development in the ‘long neglected’ region, says Jose Sergio de OliveiraMachado.   

As per recent figures collected by the Brazilian Institute of Geography and Statistics (IBGE), there has been a decrease in the migration of people from North to South but on the contrary, the case has been reverse. The Northeast has the highest return of migrants. As per Sergio Machado, these stats indicate that there is a new emerging Brazil; a Brazil which has less of disparity and more of unity.

The Northeast and other regions are being provided with new development plans which will facilitate employment and income, thus, changing the lives of millions of Brazilians.

This transformation has been possible owing to the political decisions taken by the Lula Government, for which, development of this region was a major concern. The government decided to expedite the development and take it to a whole new level of extensiveness. Petrobras, for example, is investing in structural programs in the Northeast. This is being looked at as Petrobras’ contribution towards development of the Northern region and helps improve the economic stance of Brazil. The wider emphasis is on making the Northeast self sustainable. In this wake, a keen focus is being laid on developing the education system and strengthening the employment options.

The financial and infrastructural development needs to be in sync with the social development of the people, says Sergio Machado.