A Promise Made is a Debt Unpaid

Editorial by Doug Gray, editor

RIO DE JANEIRO, BRAZIL – Poet Robert Service probably didn’t realize how apt the words of his 1907 work “The Cremation of Sam McGee” would be a century later in the light of the biggest auction in the history of Brazil’s oil industry. For as the poem opens, “There are strange things done in the midnight sun, by the men who moil for gold,” and the line Johnny Cash bit into on his version: “Now a promise made is a debt unpaid”.

When then-President Lula announced in 2008 that the huge pre-salt oil reserves discovered off the coast of Rio were Brazil’s ‘lottery ticket’, he was playing a dangerous game. Long before a single centavo’s worth of the ‘royalties’ (profit, it would seem, is too dirty a word to associate with a precious national resource) from the black stuff had been extracted, it was already being spent – literally and whimsically – by both politicians and the people alike.

The end of October, however, finally saw the first fruits of that promised ticket realized, thanks to the R$15 billion signing ‘bonus’ that was part of the winning bid during the auction for the Libra Field. The government basked in the glow of private oil giants Shell and Total’s involvement in an ‘auction’ with just one bid, and numbers were quickly totted up and fingers licked at thirty years of steadily pouring profit into the federal coffers.

Following June’s protests, Lula’s successor Dilma Rousseff went on national television to promise she would fight for 100 percent of those royalties to be spent on improving education, that irritating weight around the neck of Brazil’s politicians that, no matter how hard they try to ignore it, just won’t go away.

Now, ambition is rarely a bad thing, but it is a valuable commodity and it needs to be harnessed. Just look at Eike Batista. He promised he would fund the clean up of the Lagoa, even the Guanabara Bay, not to mention pump millions into supporting the UPP efforts in the city’s favelas. Noble causes all, but when you peacock and promise such things, and government money that would otherwise be set-aside for them is spent elsewhere, you need to deliver, or end up doing more harm than good.

If Dilma really thinks she can get clearance on allocating 100 percent of the pre-salt royalties to education, then she is either incredibly brave and has a quite brilliant plan up her sleeve, or she is hopelessly naïve. Or, worse still, is simply telling the people what she thinks they want to hear.

Either way, the president needs to start spelling out a considered plan of action, something that could win her an election at a landslide. Otherwise it will prove just one more hollow promise at a time that, for someone who has rarely looked less than a shoe-in for re-election, would be politically very dangerous.