FGV professor addresses basic sanitation universalization alternatives in Brazil

According to professor Aloísio Araújo, from FGV?s Brazilian School of Economics and Finance (EPGE), the path to universalizing basic sanitation is the privatization of companies currently responsible for such service.
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21 九月 2016

As  the expression goes, sanitation should be one of the basic services to which the population is entitled. However, the reality is that it is still a privilege for less than half of Brazilians: 58% of the nation?s population has no sewage collection or treatment, according to data from the Brazilian Ministry of Cities. According to professor Aloísio Araújo, from FGV?s Brazilian School of Economics and Finance (EPGE), the path to universalizing basic sanitation is the privatization of companies currently responsible for such service.?Sanitation directly affects health and, as a result, life expectancy. There is a lot of room for privatization, which would mean cheaper investments and the possibility of demanding broader coverage. The current coverage is relatively low, but sewage treatment is the worst scenario, as evidenced by the pollution of the Guanabara Bay. Privatizing these companies is the path to increasing household coverage,? said the professor.Nevertheless, the economist says that those concessions should not focus only on maximizing the sale value. Araújo explains that demanding service universalization from the winning bidders is more important than profiting. His assessment is that the feasibility of this process still depends on financing by the National Economic and Social Development Bank (BNDES), so that private institutions can afford the required investments. More than the financial support from the BNDES, Araújo highlights the need for coordination by the federal government.?Sanitation is a municipal responsibility. Hence, the success of this privatization process depends on engaging municipal governments in this endeavor. The federal government should coordinate this process, which would only benefit the municipalities, in my opinion?, he added.The professor goes on to explain that, despite being a municipal responsibility, a town that lacks sanitation ends up affecting the quality of life of the surrounding municipalities. As an example, he mentions the case of the dengue and zika mosquito, which can reproduce in places where there is no basic sanitation and move to other cities. The same applies to Guanabara Bay, which receives water from polluted rivers not only from the capital, but also from the surrounding municipalities in the Baixada Fluminense. However, he believes that a joint-regulation process is feasible.?There are already initiatives to think of a supra-municipal regulation, but before that we must focus on more efficient management, cost reduction, and universal access to the service?, he said.Nonetheless, universalization should not be perceived as something feasible in the short term, as Araújo points out. According to him, it is possible to achieve major breakthroughs in small periods of time, but it takes long-term planning and coordination between all stakeholders to serve the entire population.?Sanitation must be a top priority. The Olympics and zika brought this subject up again. The fiscal situation is tough, but it has to be a priority. It?s about time Brazil took this step forward?, he warned.With the launch of the Investment Partnerships Program (PPI) by the BNDES, the states see an opportunity to finally achieve this universalization goal, albeit against a backdrop of high debt and fiscal crisis. Rio de Janeiro, Pará and Rondônia have already formally expressed interest in participating.

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