Short points on the Brazilian BNDES Adhemar S. Mineiro REBRIP June 4th., Prague, Eurodad-GlopolisInternational Conference
The BNDES • Acronym for BancoNacional de DesenvolvimentoEconômico e Social (National Economic and Social Development Bank) since 1986 (formerly BNDE); • Created in 1952 as a public financial tool for development; • Disbursements of around US$ 80 billion in 2012; • Important think-tank of industrial and development strategies in the country, very attached to ECLAC’s visions in the past; • Main funding (since the new Brazilian constitution, from 1988): FAT (Fundo de AmparoaoTrabalhador – Worker Protection Fund, main responsible for the unemployment insurance, and formed by a percentage discount on the workers wages).
Main objectives • Stimulating the industrial development in the country; • Stimulating the expansion and modernization of the infrastructure in the country; • Recently: support to exports, technological innovation & modernization of public administration.
The BNDES System today • The so-called BNDES System includes BNDES (thebank) and its three integral subsidiaries: FINAME, BNDESPAR and BNDES Limited; • BNDES Limitedisthe BNDES office in London. Accordingtothebank, “the purpose of the subsidiary is to increase the Bank’s visibility in the international financial community and effectively support Brazilian companies undergoing the internationalization process or those searching for opportunities in the international market”, and also to be “the bridge between international investors and the great investment opportunities offered by Brazil; • FINAME has the role of providing resources “for financing purchase and sales operations and exports of Brazilian machinery and equipment, as well as imports of goods of the same nature produced overseas”; • BNDESPAR is a “business corporation, which has been established as an integral subsidiary of the BNDES. It carries out capitalization operations of undertakings controlled by private groups, while abiding by the BNDES’ plans and policies”.
BNDES as a public financial tool • In the past (1950’s to 1970’s): financial tool for the development plans (main: “Plano de Metas” – an important industrial development plan in Brazil, from 1956 to 1960, in the JK government, and the “2nd. National Development Plan”, from 1974 to 1983, during the military dictatorship); • From 1983 to 1989, financing infrastructure together with BID & BIRD (debt crisis period); • From 1990 to 2002, financing and helping to organize the privatization processes in Brazil; • From 2003 on: financing Brazilian international trade, internationalization of Brazilian enterprises, the “picking winners” policy inside the country and, during the sharp period of the 2008 crisis, providing credit for Brazilian companies, together with other public banks, like CaixaEconomica and Banco do Brasil.
Main critics • BNDES is not ready for a public debate on development strategy, although it is the most important public tool for planning an industrial and development strategy; • Necessity of a social & environmental approach to development vis a vis a “business as usual” approach; • Lack of transparence and social dialogue with CSO’s and social movements; • The “picking winner” policy contributes to increasing the economic and political power of big corporations inside the country; • Financing the expansion of Brazilian companies (mainly mining, agribusiness and energy companies) abroad has huge social, environmental & political impacts on other countries.
The BNDES dilemma today • Importance of having a public financial tool if we want to think about a new development strategy; • Importance and consistence of the critics towards the real operation of BNDES today and its impacts inside and outside Brazil; • Can BNDES still be the public financial tool we need for social and economic change? Can we have a successful shift of BNDES’ operations and policies?