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Case Study of the Recent Privatization of Companhia Vale Do Rio Doce (CVRD) in Brazil

Syllas Tozzini, Roberto N. P. de Cillo, Mineral Development in Latin America (1997)

The Brazilian Federal government started in 1990 an ambitious Privatization Program (the “PND”), which has quite successfully been carried on ever since.

The main purposes of the PND1 are stated to be:

I.a change in the strategic position of the state in the economy, by means of a transference to the private sector of activities that have so far been performed by the public sector. The government expects that the public administration, focusing on priority areas of government, will become more efficient. Furthermore, it is expected that once in private hands, the privatized companies will become more dynamic and productive;

II.an economic restructuring in the public sector mainly by means of improving the profile and by reduction in the federation's internal debt;

III.a strengthening of the Brazilian capital markets and a democratization of the capital of the companies to be privatized;

IV.a contribution to the economic restructure in the private sector, mainly for the purpose of modernizing the infrastructure and the industry in Brazil by means of improving competition and strengthening the entrepreneurial capacity in various sectors of the economy, including by means of credit giving;

V.a possibility for the Public Administration to draw its efforts to the activities where the State is deemed to be fundamental in view of t