Lula Holds Event in Pernambuco on the Day of the Auction for Atlântico Sul Shipyard, but Does Not Mention Shipbuilding Industry

The Arrival of the Former President Happened Just When the State is Going Through an Important Moment Regarding the Future of the Economy, Especially in Relation to the Naval Sector and Fuel Prices

Former President Lula spent the last three days visiting cities in Pernambuco. Wherever he went, he held public events, gathering supporters and thousands of activists, with fiery speeches that constantly recalled the time when the Workers’ Party governed Brazil. He praised the social programs created during his administration but also criticized the management of Jair Bolsonaro and strengthened his ticket in the State, which has been experiencing internal divergence. However, nothing consistent was mentioned about the shipbuilding industry, even though one of the events occurred precisely on the day of the Atlantic Shipyard auction.

The Atlantic Shipyard is located in the Port of Suape, in the municipality of Cabo de Santo Agostinho, in the metropolitan region of Recife. Between 2007 and 2014, it generated more than 11,000 jobs. At that time, Pernambuco was pointed out as being in a situation of almost full employment (when the unemployment rate does not exceed 6%).

The entire Port of Suape employed more than 65,000 workers from various parts of Brazil. In 2021, the Atlantic Shipyard performed repair services on 11 vessels, generating revenues of R$ 65.4 million, with R$ 26.6 million net. Since 2020, the EAS has been in judicial recovery, as it is for sale via auction to pay part of the R$ 1.4 billion in debts to the National Bank for Economic and Social Development (BNDES).

Recomendado para você

Oil and Gas

Major Oil, Gas, and Energy Event Will Take Place in Brazil: Macaé Energy Will Gather Petrobras, Equinor, Prio, Among Other Suppliers and Energy Executives for Business, Networking, and Employment Opportunities

The Technical Agenda and the Fair in the City of Macaé Should Boost Discussions on Investments, Energy Transition, and Development of the Oil, Gas, and Energy Chain in the National...

Paulo Nogueira

1

Although he did not mention the shipbuilding industry, in the past, the sector garnered Lula many votes. In 2003, the first year of the Workers’ Party administration, the sector was boosted by the Petrobras Maritime Support Fleet Renewal Program (Prorefam), as well as the National Oil and Natural Gas Industry Mobilization Program (Prominp) and the Fleet Modernization and Expansion Program (Promef). Two years later, the naval sector began to generate a significant number of jobs, including at the Atlantic Shipyard, as we mentioned, but later succumbed to the crisis of Lava Jato.

Lula Criticizes ICMS Reduction of Fuels in Pernambuco

In total, Lula visited five municipalities in Pernambuco: In addition to the capital Recife, he was in Olinda where the main rally took place this Thursday (21); Serra Talhada, in the hinterland; and in the Agreste region, he landed in Caetés and Garanhuns, where he criticized the complementary law 194/2022 that limits the collection of the Tax on Circulation of Goods and Services (ICMS) on fuels, proposed by the government of Jair Bolsonaro.

“The president harmed the governors with this ICMS reduction, there will be a lack of money for education and health so he can reduce the price of gasoline by R$ 0.69,” Lula said. “He (Bolsonaro) could have had the courage. With the same stroke of the pen that Pedro Parente (the president of Petrobras who instituted the Import Parity Price policy) increased gasoline without asking anyone, he should have reduced gasoline without asking anyone,” he added.

Allies Reportedly Faced Pressure to Reduce the Tax in Pernambuco

The already enacted Complementary Law prohibits states from charging a rate higher than the general ICMS rate, which varies between 17% and 18%, on fuels, as well as electricity, communications, and public transport.

During the process, Bolsonaro vetoed provisions that provided for financial compensation for states – which may suffer a loss of revenue from the tax – but used the reduction of fuel prices in favor of his image, consequently deflecting responsibility for high fuel costs onto the governors.

For the government leader in the Pernambuco Legislative Assembly, Isaltino Nascimento (PSB), the ICMS reduction on fuels only serves the federal government, ahead of the upcoming October elections.

“This electoral move by President Bolsonaro directly attacks investments in our state. The ICMS reduction in Pernambuco will reflect in less funding for cities to invest in health, education, infrastructure, and public safety, for example,” says the state deputy.

Meanwhile, the federal government’s leader in the Senate, Fernando Bezerra Coelho (MDB), who is from Pernambuco, promises to pressure governors even more for further reductions. “We will pressure so that this reduction can reach the national average of 80 to 90 cents,” he said in an interview with CBN radio.

“It is enshrined in the constitutional text that the ICMS on essential services and products cannot exceed 18%. This is a great achievement that will encourage business and investment and allow for more income for Brazilians and Pernambucans to increase their consumption,” concluded the senator.

Lula Spoke About Oil in General Terms

It was in Recife where Petrobras and Eletrobras were mentioned by the former petista president. With a tone of state intervention promise, Lula stated he would discuss these state-owned companies again. “The State must have instruments for its action,” he said. “This Brazil that you dream of, we already built, it is possible. Let’s recover this country,” he said.

The pre-candidate for the government of Pernambuco, Danilo Cabral (PSB), implored the petista that, if elected, he cancel the privatizations desired by right-wing neoliberals.

Platform of Much Affection Among Allies and Few Ideas for the Economy of Pernambuco

Despite sharing the same ideas and occupying the same platform as Lula, Danilo Cabral is not a consensus in the local PT, and thus was booed whenever his name was mentioned at events.

The majority of petistas in Pernambuco support Marília Arraes (SD). Until recently, she was in the PT but decided to leave the party due to the proximity the party developed with the PSB.

Today, the socialists have strong ties with the PT – including Geraldo Alckmin being Lula’s vice – but they themselves supported the impeachment of Dilma and have clashed with petistas in previous elections.

Lula’s intent in Pernambuco is to associate the PSB candidate with the image of former local governor, Eduardo Campos, who was the national president of the socialists and who, while in office during the same period as the federal PT administration, promoted gains recognized by a majority of the Pernambucan population, especially in job creation, at the peak of the naval industry in Pernambuco.

In other words, the passage through Pernambuco served “only” to resolve political issues. And now we must wait for the beginning of the electoral campaign effectively, to be able to hear firm proposals for the shipbuilding industry, oil, fuels, and other sectors of the economy.

Union Wants Candidates to Present a Consistent Policy for the Naval Industry

The National Union of the Shipbuilding and Offshore Repair Industry (Sinaval) presented its proposals for sector promotion and competitiveness enhancement, which will be forwarded to the presidential candidates.

Sinaval states that, between 2000 and 2013, local content policies, new orders from Petrobras, and increased offshore production led to the sector advancing, on average, 19.5% per year, according to data from the Institute of Applied Economic Research (Ipea).

The sector development proposals to be presented to presidential candidates point out the need for incentives for local content and tax exemptions to gain competitiveness.