Brazilian Subnational Social Wealth Funds in Bloomberg and Washington Post

Bloomberg’s Juan Pablo Spinetto wrote about Brazil’s cities and states that are transforming their revenue windfalls from oil production into long-term funds for social good.

The article cites JFI’s research partnership with UFF in Maricá, Brazil, as well as JFI’s Social Wealth work with several Brazilian funds.

Thanks to its proximity to the deepwater oil developments that have made Brazil into a major crude producer, Maricá is the country’s largest recipient of royalties from hydrocarbon production, effectively getting billions of reais from the different legal arrangements that distribute the nation’s commodity wealth.

The money funds an innovative basic income program that provides unconditional transfers to about a quarter of Maricá’s population(1). But what’s left over is so significant that in 2017 the city smartly decided to set up a vehicle to save part of the newfound riches: Currently, its wealth fund has 1.53 billion reais (or about $320 million) under administration, from just 285 million reais at the start of 2020. It’s set to keep growing because it’s receiving between 5% and 15% of the regular royalty transfers that the local government gets, on top of generating its own returns.

Read on Bloomberg.

The piece was also published in the Washington Post.