Government sends project for BNDES to lend to other countries again

The National Bank for Economic and Social Development (BNDES) may once again finance works and other services provided by Brazilian companies abroad if a bill sent this Monday (27) by the Executive is approved by the National Congress.

The opposition sees the proposal as a “mockery” towards the treasury and the population. BNDES loans to so-called “friendly” countries, to finance works carried out by Brazilian contractors, were a hallmark of previous PT administrations. Not everyone was paid.

According to the government, the intention of the bill is to allow more competitiveness and market for national businesspeople, as is done in more than 90 countries, including the United States, Sweden, Canada and China. Planalto says that the measure applies to civil construction and also other areas, such as software engineering, audiovisual and machinery and equipment.

“The idea is to integrate Brazil with the best international practices, with transparency, security in the process and clear rules”, stated, in a note, José Luis Gordon, director of Productive Development, Innovation and Foreign Trade at BNDES.

According to him, public financing for companies that trade with foreign countries reaches 20% in some developed countries, but does not exceed 0.3% in Brazil.

This type of credit has been suspended since 2016, when large construction companies in the country benefiting from financing were investigated for corruption in Operation Lava Jato.

Among the controversial works financed under previous PT governments are the Caracas metro, in Venezuela, and the Port of Mariel, in Cuba. Together with Mozambique, the three countries owe US$463 million to the development bank, or close to R$2.27 billion.

The text of the bill says that “the granting of new credit operations between BNDES and legal entities governed by external public law in default with the Federative Republic of Brazil is prohibited in financing the export of services.”

The prohibition on loans for defaulters already exists in BNDES’ internal rules, but the idea is to reduce resistance to the project, specifying the restriction in law.

The leader of the opposition in the Chamber of Deputies, Carlos Jordy (PL-RJ), says he does not believe that the proposal will prosper. “I don’t believe it has the strength to be approved in Congress. That would be a mockery of the public treasury and the Brazilian people,” said the deputy to People’s Gazette.

“Even though defaulting countries could not benefit from the project, there is the possibility that they could formally renegotiate the debt and thus could receive investments from BNDES,” he added.

Jordy recalls that there is already a proposal to amend the Constitution (PEC) in the opposite direction, giving parliamentarians the power to veto BNDES operations abroad.

“The project goes completely against common sense and what the population is asking for, which is transparency and limiting the transfer of resources to other countries. We will work for the approval of PEC 3/2023, by deputy Mendonça Filho, to guarantee this”, he stated.