Brazil: Lula admits Cuba and Venezuela’s default but blames Bolsonaro

On Monday (6), speaking during the inauguration ceremony of Aloizio Mercadante as president of the National Bank for Economic and Social Development (BNDES), President Lula da Silva (PT) admitted the default given by Cuba and Venezuela but blamed former President Jair Bolsonaro for the debt.

Lula called the socialist regimes “friends of Brazil” and defended sending money via BNDES through the financing of billion-dollar construction projects.

Lula tried to minimize the financing, saying that the Bank “doesn’t keep lending money to other countries,” according to Lula, it finances “engineering services of Brazilian companies” in 15 Latin American and Caribbean countries, all members or partners of the São Paulo Forum.

“The countries that didn’t pay, be it Cuba or Venezuela did so because the president (Bolsonaro) decided to cut off international relations with these countries and, in order not to collect, to keep accusing them, stopped collecting. I am sure that in our government they will pay because they are all friends of Brazil, and they will certainly pay the debt they have with BNDES,” said Lula, blaming Bolsonaro for the default.

Lula also pointed out that all the financing was granted with guarantees.

In January 2021, the former president of BNDES, Gustavo Montezano, released documents showing that during Lula’s second administration, in 2010, BNDES even accepted Cuban cigars as collateral for a billion-dollar loan for the construction of the port of Mariel in Cuba.

According to data on the BNDES website, Venezuela and Cuba still owe US$529 million to Brazil for loans contracted during the PT governments.

The amount corresponds to 25% of the total loan to the two countries.

Although the amount was covered by the Export Guarantee Fund (FGE), funded by the Treasury, avoiding losses to the BNDES, the PT’s two “friendly nations” gave Brazil a default and are considered debtors of the Bank.

With information from Brasil Sem Medo