Brazil’s authorities’ response to floods decent, society’s humbling – Abiquim CEO

SAO PAULO (ICIS)–Brazil’s authorities’ response to the devastating floods in Rio Grande do Sul was appropriate, while that of civic society was “marvelous and exemplary”, according to the CEO at chemicals trade group Abiquim.

Andre Passos is a gaucho himself, as people from Rio Grande do Sul are called. The state is one of Brazil’s most industrialized and is also an agricultural powerhouse.

At the beginning of May, there were concerns the state’s machinery – all levels: federal, state and municipal authorities – could not cope with what Passos described as “five Katrinas together”, in reference to the hurricane which devastated New Orleans in the US in 2004.

Abiquim’s CEO said, however, that the state’s response proved adequate overall by triggering the state of emergency and that way allowing authorities to release large-scale funds quicker.

Authorities have opened credit lines with favorable interest rates, although trade groups in the state have said more will be needed for the economy to recover.

Passos was more decisive in his praise for gauchos and Brazilians at large and how they responded to the crisis: he said he had been humbled and somehow overwhelmed by that response.

STATE RESPONSE
Brazil’s President Luiz Inacio Lula da Silva received some criticism early in the crisis due to his slow response, and many voices said the state of emergency should have been declared earlier than one week after the crisis had started.

Most analysts expect Brazil’s GDP growth to be negatively affected in 2024 due to the floods. Manufacturing activity in May sharply slowed down, the petrochemicals-intensive automotive sector was heavily affected and that month’s inflation figures showed prices rose in part due to the floods.

Rio Grande do Sul is also home to the Triunfo petrochemicals hub, key in Brazil’s polymers chain and which restarted operations late in May, including the largest producer there, Braskem.

In early May, some analysts said the floods were Lula’s ‘Katrina moment’, in reference to US President George W Bush in 2004 and how it became the quintessential example of lack of leadership skills in a crisis.

According to Passos, Lula – and the state at large – would have passed the test.

“The Federal authorities took the correct decision in declaring the state of emergency, in looking at this crisis an exception, so they can have the necessary freedom to allocate resources quicker. We must keep in mind: people working for the state in Rio Grande do Sul – for the federal, the state and the local authorities – were also heavily affected, personally,” said Passos.

“That undoubtedly will cause a delay in the response: civil servants’ houses and families were also in the middle of the crisis. This was a tragedy the size of five Katrinas, so you clearly will have an impact in the state’s capacity to act, but they are coming back and the response is now being adequate, considering also the limitations you will have in a country like Brazil.”

BRAZILIANS’ RESPONSE
Amid the severe destruction, Passos said however the anonymous acts of kindness of gauchos in the past six weeks had been overwhelming.

As well as praising those anonymous citizens who went out of their way to help, he also said he had been happily surprised to see companies who, at the moment of the state’s direst needs, put their corporate interests behind to unite in their response.

He tells how Abiquim coordinated the distribution of oxygen during the crisis out of Rio Grande do Sul’s two plants producing oxygen, coordinating efforts from the producers as well as others in the chain who were necessary to distribute it.

“From the first moment, companies agreed for Abiquim to have a central role, without affecting their market share or the redistribution of customers or anything like that. We had several challenges at the peak of the crisis to distribute the oxygen in liquid form, in trucks,” said Passos.

“That’s where you get those anonymous acts of heroism. If the truck found a logistical hurdle, everyone around would literally leave what they were doing and try to open way for the truck. Schools, churches, any sort of public building seemed to turn into refuges to help those who were forced out of their houses. Those acts speak of a marvelous civic response, from gauchos but also from the rest of Brazilians, who for weeks had Rio Grande do Sul in their minds and hearts and also helped.”

ICIS published the first part of this interview on 14 June. In it, Passos said Abiquim is demanding not only higher import tariffs, so domestic producers’ market share is protected in the face of imports, but also a plan to lower natural gas prices and a stimulus program to support the chemicals production chain.

Front page picture: Braskem’s facilities in Triunfo, in Brazil’s Rio Grande do Sul state 
Source: Braskem

Interview article by Jonathan Lopez