Billionaire Wants to Wake Up Brazil With Presidential Bid

(Bloomberg) -- With scores of Brazilians still reeling from recession and dependent on a heavy but generous government hand, billionaire and presidential hopeful Flavio Rocha proposes a radical overhaul of the state.

"I’d sell all the state companies," Rocha said in a recent interview at Bloomberg’s offices in Sao Paulo. That would include the only long-term lender in the country, BNDES, and Latin America’s largest bank by assets, Banco do Brasil SA. "We need to redesign the state."

With an almost messianic fervor Rocha, the 60 year-old heir and outgoing chief executive officer at retail giant Riachuelo, says Brazilians must unite to unseat a group of self-serving politicians that has taken control of the state. His main battle cry is to unleash Brazil’s entrepreneurial spirit and slash inefficiencies.

"My intent is to wake up the immense, sleeping majority of the Brazilian population," said Rocha, sporting a tight, gray suit and unbuttoned shirt. "How can a bureaucratic aristocracy of 1 or 2 percent take ownership of the state?"

A few years ago a candidate like Rocha would have been booed off of any campaign stage. But the ballooning of the right-wing MBL movement that supports him shows the potential he and his ideas carry. As he just launched his candidacy, there are no opinion polls showing voter intention for him yet.

The downfall of Brazil’s left and the subsequent critique of state-led economic development it practiced for a decade and a half has prompted a plethora of market-friendly candidates openly advocating previously taboo ideas such as privatization. While Rocha isn’t the only one, the Harvard-trained business administrator is certainly the most liberal in his economic proposals.

On the desk in his office, Rocha says, he keeps the latest ranking of countries according to the Heritage Foundation’s Index of Economic Freedom. As he cites Brazil’s ranking in 153rd place out of 180 countries -- behind Malawi, Sierra Leone and neighboring Argentina -- he cringes slightly, laments, and then declares: "I want to be the guardian of competitiveness."

Despite similar positions on the economy, public security and family values, Rocha sought to distance himself from the far-right former Army captain Jair Bolsonaro, saying the legislator from Rio de Janeiro was much more interventionist. "We have more differences than commonalities."

Yet what will decide this election and move voters hearts are not economic but moral issues, says Rocha. Describing himself as ultra-conservative on social issues, he wants to get tough on public security and strengthen family values. As member of the Heal Our Land denomination, Rocha is a creationist and against gay marriage. Yet he says he’s fine with the civil union of gay people.

“We have wonderful gay friends and Riachuelo is the biggest trans-gender employer in Brazil,” he said.

For too long have governments been soft on criminals, trying to explain their behavior through their socio-economic environment, Rocha said. "At fault is the guy who pulls the trigger, not society."

Yet pushed for details on family values and other proposals, Rocha stuck to more generic principles. He also had little to say on who his advisers are, what his campaign strategy would be, or how he would form a coalition if he won.

After all, he only decided to run for the country’s top job less than a month ago, he said, and joined his party, the Brazilian Republican Party, on March 27.

He doesn’t foresee using his family wealth, estimated in $2.2 billion, of which he is the main benefactor. A popular movement should be financed by many, goes the argument. Rocha declined to comment further on his financials.

Guararapes Confeccoes SA, the family’s conglomerate, entered the fast fashion market and sped up store openings since 2011 and now has over 300 stores in Brazil. In his 10 years at the helm of Riachuelo, the company’s main brand, shares have almost tripled, outperforming the benchmark index. They are down 13 percent since peaking at 166.89 reais in October 2017, trading at 146.50 reais in Sao Paulo as of 12:25 p.m. on Tuesday.

Backed by the MBL, the most vocal critic of the two administrations led by the leftist Workers’ Party, Rocha co-founded with other businessmen the Brazil 200 Movement, in reference to the country’s independence from Portugal nearly two centuries ago. The movement, the first step in his candidacy, seeks to free Brazilians from the "bureaucratic aristocracy" that has taken control of the state, he says.

"The debate now will be between those who work and those who act as parasites. The parasites are driving the state carriage, and they are a minority."

--With assistance from Felipe Marques

To contact the reporters on this story: Fabiola Moura in Sao Paulo at fdemoura@bloomberg.net, Paula Sambo in Sao Paulo at psambo@bloomberg.net.

To contact the editors responsible for this story: Daniel Cancel at dcancel@bloomberg.net, Raymond Colitt, Julia Leite

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