Brazil plans to use its $3.5 billion social fund from oil revenues to stabilize its economy, amid President Lula’s record low approval ratings of 24%. A new committee will oversee the fund’s allocation while Lula pushes for oil drilling in the Amazon to fund a transition to green energy.
Brazil is aiming to utilize its $3.5 billion social fund, generated from oil and gas revenues, to strengthen its economy amid declining approval ratings for President Luiz Inacio Lula da Silva. Recent inflation and surging food prices have diminished public confidence in his administration, with approval ratings falling to a historic low of 24%, according to Datafolha polls. Conversely, the perception of his government as subpar has risen to 41%, marking a record high of dissatisfaction.
In response to this decline, Lula’s administration is creating a committee to oversee the management of the social fund. Established in 2010, this fund has amassed $3.5 billion (or 20 billion Brazilian reals) through oil royalties. The committee’s role will include determining the allocation of these funds for either the national budget or potential transfers to other financial vehicles, as indicated by a finance ministry representative.
Despite facing steep disapproval, Lula has advocated for oil drilling in the Amazon region. He is urging Brazil’s environmental authorities to expedite approvals for drilling near the Amazon River’s mouth, positing that the revenue could support the nation’s shift towards green energy solutions. Lula stated, “I want it (oil) to be explored. But before exploring, we need to research and see if there is oil and how much oil there is.” He criticized current regulatory delays, asserting that the environment agency appears to be obstructing government initiatives.
Brazil’s strategy to leverage its $3.5 billion social fund for economic recovery comes at a critical time as approval ratings for President Lula hit a record low. The formation of a management committee for the fund aims to direct financial resources effectively while addressing the pressing issues of inflation and public dissatisfaction. Lula’s push for Amazon oil drilling indicates a controversial approach to stimulate the economy, balancing environmental concerns against the potential for revenue generation.
Original Source: oilprice.com
