LatinNews Daily - 30 January 2023

In brief: Brazil’s Lula promises to restore investment to state gov’ts

* Brazil’s President Luiz Inácio Lula da Silva has met with the country’s 27 state governors and promised to invest in a range of projects proposed by the state governments. The president highlighted the role of the state-owned development bank (BNDES) in regional investment and stated his intention to listen to the concerns and priorities of each state. This regionalist rhetoric is aimed at addressing what the minister of institutional relations Alexandre Padilha described in a tweet on 27 January as “the tug of war between the federal government and the states.” Those tensions increased during the administration of former president Jair Bolsonaro (2019-2023), for example through the government’s decision in June last year to reduce a state-levied tax on fuel and other essential services (ICMS), one of state governments’ major sources of revenue. Lula tweeted that “compensation for ICMS must be on all of your minds,” aiming to assure the governors that they would begin to work out how to recover the lost ICMS revenue. After the meeting in Brasília, several state governors expressed their satisfaction about the president’s promises, having also discussed funding for infrastructure and housing programmes, among other state projects.  

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