The warning of a former BNDES president to Lula da Silva

Brazilian economist Maria Silvia Bastos Marques, former president of the National Bank for Economic and Social Development (BNDES), said that Brazil has already “paid a high price to finance works in neighboring countries”, due to the lack of criteria that involve guarantees and forms of payment.

The economist’s position came after President Lula announced the financing of a gas pipeline in Argentina.

The work will be funded with money from tax payers in Brazil, through the BNDES.

“If we are going to do it, let it be done in a different way”, said Maria Silvia, in an interview with the newspaper Valor Econômico, published on Tuesday 24th.

Maria Silvia has doubts about the possible use of the Export Guarantee Fund (FGE).

The former BNDES recalls that, when she was no longer in charge of the bank, the FGE had no resources and needed contributions from the Union to cover defaults that countries like Venezuela and Cuba gave to Brazilian banks.

“The BNDES was reimbursed with taxpayer money, because it made a loan and had no guarantee, and the main justification for the loan being made was to have a guarantee, so it is a vicious circle”, observed Maria Silvia.

In the 2023 Budget, the FGE will have almost BR$5 billion available.

To try to solve the problem of lack of liquidity in the real currency for Argentine importers, the Lula government announced a credit line for financing foreign trade, which would be guaranteed by the FGE.

In addition to a certain guarantee, it is important to define what will be the source of funds for the BNDES, to carry out these operations with foreign countries again, pondered Maria Silvia.

“The big issue in Brazil today is the fiscal issue, it is around what all the uncertainty revolves, the concern of economic agents, the volatility of interest rates,” she said.

“We are talking about a new management that wants to prioritize the inclusion of the poor in the Budget, but the Budget is finite”, recalled the former BNDES.

“What are our priorities? Lending to neighboring countries or raising the national average income, increasing our productivity, including people in the labor market?”

With information from Revista Oeste