Reports dispute Tebet that loan to Argentina did not have Brazilian money

Official financial statement reports indicate that Brazil has already injected resources into the Development Bank of Latin America, known as CAF, equivalent to around R$2.6 billion over the last ten years. The institution recently lent US$1 billion to Argentina, in an operation that Planning Minister Simone Tebet said did not have the country’s money.

The news that CAF made the operation to Argentina as a “bridge loan” to access resources from the International Monetary Fund (IMF) emerged on Wednesday (4) following an investigation by the newspaper The state of Sao Paulo. According to the report, President Luiz Inácio Lula da Silva (PT) would have pressured the minister to forward the operation at the bank – she is Brazil’s governor at the institution – and influence the vote of the other 18 member countries.

This is because Argentina, according to Estadão, had already reached the credit limit at CAF, but needed the operation to access a US$7.5 billion loan from the IMF to help the struggling local economy. Lula supports the current Argentine Economy Minister, Sergio Massa, to succeed his friend Alberto Fernández in the October 22nd election.

Hours later, Simone Tebet denied that she had received any order from Lula to facilitate the release of the loan or influence the vote in other countries, the same position adopted by the Communication Secretariat of the Presidency of the Republic (Secom) later.

On the same day, Simone Tebet had to give explanations to deputies and senators of the Mixed Budget Committee (CMO) of the National Congress about the operation, in which she said that “there is no Brazilian federal money there, we are not taking money from Brazil to put there ”.

However, CAF reports consulted by People’s Gazette point out that Brazil has already contributed its own resources over the last ten years – a period in which balance sheets are available for public consultation.

See below the contributions made by Brazil to the institution from 2013 to June 2023, the date of the last available report. The values ​​are presented in dollars and reais following the official exchange rate for each period:

Sources: CAF official reports of the years of 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022 and partial 2023It is dollar quotes year by year.

Reports indicate that only the year 2019 had no contributions from Brazil, the first during the administration of former president Jair Bolsonaro (PL). Over the next two years, the government allocated only around US$15 million to the bank. CAF capitalization, however, jumped in 2022, the last year of Bolsonaro’s administration, of US$43.9 million.

On the other hand, in just the first six months of 2023, the Lula government has already sent more than half of the amount for 2022 (US$31.3 million).

The Ministry of Planning was approached by People’s Gazette to explain the contributions made by the country to CAF and Simone Tebet’s statement. The space is open for response.

Operation is normal and has already been paid off, says minister

Still during the explanation to congressmen, Simone Tebet said that the loan to Argentina had a deadline of just 10 days and that it had already been paid off “in a timely manner, I don’t know if it was a week, 10 days”. According to the minister, 20 of the 21 countries voted in favor of the loan.

Simone Tebet stated that this type of operation is normal and that it was also justified by Argentina’s participation in Brazilian foreign trade – it is the country’s third largest partner and that it “needed a breather”.

Despite the minister trying to justify the importance of the operation to the neighboring country, political scientist Christopher Mendonça, doctor in political science from the Federal University of Minas Gerais (UFMG), sees that Simone Tebet “tried, in a practical way, to use a discursive resource to defending that CAF resources are not included in the general Union Budget, which is not a valid argument”.

“The annual financial contributions allocated to this banking institution could, without any impediment, be used to implement public policies in Brazil”, he adds.

In addition to aid to Argentina, CAF lends resources to other countries in the region that are signatories to the bank. According to the institution’s latest report, calculated until June 2023 (see in full), Brazil has already taken out US$3.4 billion in loans (R$16.8 billion in the June quote), which were used in mobility projects urban, energy efficiency, telecommunications, environment, among others, explains the institution’s website (see here).

Also according to the bank, a US$650 million operation was approved last month for projects by the National Bank for Economic and Social Development (BNDES) and for the construction of a bridge between Salvador and the island of Itaparica (BA).

I caress Argentina

Since the beginning of the new government, Lula has sought to strengthen trade relations with Argentina, with which Brazil has done business that, this year alone, has already totaled US$20.5 billion, with a surplus of US$4.4 billion for the country. country.

Argentine president, Alberto Fernández, was in Brasília at least twice to ask for Lula’s help in finding a solution to the serious financial crisis faced. Argentina is seeing the price of the peso melt against the dollar and accumulated inflation that already exceeds 120%.

Aid to Argentina has already included an attempt by Finance Minister Fernando Haddad to influence IMF decisions. In mid-May this year, he met with United States Treasury Secretary Janet Yellen to appeal for help to the neighboring country.

The Brazilian government views the Argentine presidential election, which will be held in the first round on October 22, with concern. Libertarian candidate Javier Milei is rising in the polls and could threaten the government candidate, Sergio Massa, with whom Lula is close.

Milei has already stated that he intends to adopt a series of controversial measures, such as dollarizing the country’s economy, abolishing the Central Bank, reducing the size of the state and, Brazil’s biggest concern, leaving Mercosur.