Brazil passes law directing all oil royalties to health care and education

gas pump brazil photo
CC BY 2.0 otubo

Brazil's Congress passed a law yesterday which would direct all royalties from the nation's burgeoning oil exports towards improving life for its 194 million citizens.

Brazilian President Dilma Rousseff, who's expected to sign the bill into law in the coming days, called the new legislation an "historic victory", ensuring profits reaped from the country's abundant natural resources will be used to enrich millions of Brazilians currently without access to quality health care or education.

Going forward, Brazil plans to further exploit its oil discoveries through domestic and foreign partnerships, and it is estimated that royalties gained could be in the range of $150-300 billion over the next 35 years. The law allots 75 percent of that money to increase funding of public education, and 25 percent for the national health care system -- a sizable increase in funding to services many see as currently inadequate.

"For me and my government education is the principal pillar to transform Brazil into a great nation, assuring that our people are freed from poverty," said Dilma in a radio address aimed at quelling ongoing protests.

While the law's pledge of using oil royalties to benefit the neediest citizens is certainly commendable, both savvy political observers and environmentalists may have reason to be doubtful. Corruption and misappropriation -- not a lack of funding -- is believed by many protesters to be the root of current failings in health care and education. Shifting oil royalties towards these services, therefore, may only serve to water inefficient bureaucracies that would best be left to dry up.

What's more, by tieing social benefits to oil ventures, Brazilian politicians may be hoping to undercut opposition to risky and potentially disastrous extraction processes -- like the numerous deepwater drilling operations off the coast of Rio de Janeiro, one of which loosed thousands of barrels of oil into the Atlantic ocean in 2011.

In a nation where the top ten percent earns more in a month than the bottom ten percent makes in 3 years, this novel new law sounds a bit like a slick misdirection.

Tags: Brazil | Oil

Best of TreeHugger