At a time when you might have expected to hear the youth of Brazil chanting about the nation’s football team, they called out “vem pra rua” — “come to the street” — an invitation to protest against corruption, police aggression and poor public services. At the peak of the Confederations Cup competition in June, a dry run for the Fifa World Cup to be held in Brazil next year, millions were asking how the country could afford to spend more than R30 billion (Rs.83,985 crore) on sporting events while healthcare, education and infrastructure are neglected. For much of the population, the protests captured their frustration with the slow pace of the progress that had been promised by the country’s economic boom. But as the government looked to appease protesters by committing to reform and investment in healthcare and education, the financial markets predicted some unlikely beneficiaries. For example, the share price of Kroton Educacional SA, Brazil’s largest for-profit higher education provider, rose by more than 7 percent in the last week of June to double that recorded 12 months earlier. At the height of the protests, Dilma Rousseff, Brazil’s president, reignited plans to invest 75 percent of future offshore oil royalties in education — estimated to amount to R112 billion (Rs.313,653 crore) from oil already being extracted — as well as a 50 percent share of a fund created in 2010 to receive resources from a large “pre-salt” oilfield. Kroton’s chief executive, Rodrigo Galindo, hinted to the financial press that the government’s response to the social unrest might bring dividends. The government will try to invest as much as it can in the public sector, says Simon Schwartzman, social scientist and president of the Institute of Labour and Society in Rio de Janeiro. “In general, there isn’t public support for private education except money for research institutions,” he says. But companies in the private education sector — and their investors — are nonetheless optimistic that the knock-on effects of the government’s approach to education will fuel their business. In early September, Reuters reported that shares of Brazil’s four listed education firms are outperforming the market, up a combined 18 percent this year compared with a benchmark slump of 15 percent. Although a few private institutions, particularly in business and law, are among the best in the country, most of Brazil’s top universities are public, free and well-funded. But they currently educate just 25 percent of students — mostly wealthier graduates from private schools trained to pass the country’s tough university entrance exams. Most students attend for-profit private institutions, which offer cheaper-to-teach vocational courses, evening classes that fit around work and distance learning. Noises from the government so far suggest that schemes allowing poorer students to access private education may increase. These include the Student Financing Fund (FIES) — which covers 50 to 100 percent of tuition fees according to students’ gross monthly household income — and ProUni (“University for All”), a scheme through which private institutions provide free places to…
