New Government, Old Challenges

As the New Year has finally come to its beginning, so does Minas Gerais’ new state government. Since the first day of the year, the state has been ruled by the economist Fernando Da Mata Pimentel, 63, who has recently worked for Brazil’s Ministry of Development, Industry and Foreign Trade under Dilma Rousseff’s first term.

Mr. Pimentel takes over a Brazilian state historically known for its commodity-based economy highly essential to the country’s Gross Domestic Product that has recently suffered the woes of the currency war and international economy uncertainties.

Certainly, his knowledge on economics and the experience on the federal government (he was also Mayor of Minas Gerais’ capital city, Belo Horizonte, for two terms) bring the highest expectations, particularly for the industry sector that is experiencing shortage on investments and cutting back on spending.

On the other hand, specialists have already agreed that after 12 years under the Brazilian Social Democrat Party (PSDB), Minas Gerais is expected to benefit from federal investments as it’s now politically aligned (Mr. Pìmentel and President Rousseff are not only members of the Workers Party but also born in Minas Gerais capital).

Under these circumstances, one of the first accomplishments Mr. Pimentel and his already selected staff has to acquire directly affects the economy: developing an effective plan on water resources management. It is commonly agreed that Brazilian bad habits on water consumption added to the past year of severe drought had caused extreme decrease on water reservoirs’ levels and therefore an alert siren has been turned on for all industries.

For Minas Gerais, Mining, Steel and Agricultural sectors are the main sectors affected by the economic woes and water shortage. The state government has to fiercely optimize the expenditure and it has to start by replacing old pipes that waste around one third of the water aimed to public use and increasing protection from springs to watersheds so the dams can resume energy production.

Undoubtedly, Minas Gerais’ new governor has a Tour de force to accomplish, at least the tools are already available.

Reported by Marcos Souza

Deputy Representative NBSO Brazil