Still a Heavy Hand

Mar 3, 2004

Successful modern economies require an enlightened approach to regulation, but the PT and its congressional allies have not shaken off their suspicion of market economics sufficiently to abandon the leading role of the state in organizing and managing the economy. The apparently independent regulatory agencies created during the privatizations of the 1990s to oversee the power, telecoms and oil industries, are now being systematically defanged and their powers transferred to the government. PT ministers say it is the government's job to determine policy and the regulators' job to execute and monitor compliance with these policies.

The latest regulator to succumb is Aneel, the electric industry agency. Legislation has stripped Aneel of policymaking authority over bidding, concession contracts and tariffs. The Mines and Energy Ministry has assumed these powers instead. The market's...

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