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Putting “development” in the Brazilian Development Bank

Brazilian development policy underwent a major transformation in the last decade, having the Brazilian Development Bank (BNDES, by its acronym in Portuguese) as the great symbol of this process. In 2004 disbursements by the bank were in the order of USD 40 billion, while in 2010 they totaled over USD 168 billion. This growth by the bank occurred with a clear intention of the Brazilian government. The two main sources of bank financing are the Workers’ Support Fund and the National Treasury, but while the former has a fixed value (40 per cent of the fund), the amount deposited by the Treasury varies from Brazilian Real 43 billion in 2008 to a staggering 376 billion in 2012. However if the rise and importance of the bank in the last decade is unquestionable, the development model chosen raises many doubts. In 2012 about 58 per cent of bank disbursements (equivalent to Brazilian Real 90 billion) were for big companies, while areas such as education and public transport received, respectively, Real 516 million and Real 1.5 million.

The Brazilian Institute of Social and Economic Analyses (IBASE) has worked directly in recent years to build a model of more equitable and democratic development for Brazilian society. So it has worked to build both directly with the Bank, as with other civil society organizations, an open dialogue to discuss the development model today prevailing in Brazil. Thus IBASE works to focus on control, monitoring, transparency and definition of human rights, social and environmental safeguards in BNDES.

The huge investments made by the bank, besides generating a large gap between those in need of resources and large business corporations , also have a strong disposition to finance megaprojects, which are responsible for major social and environmental impacts. These investments, often accompanied by severe damage to the environment as well as the violation of rights of local populations, are conducted both in Brazil and in several Latin American countries and Africa. The BNDES investments in infrastructure in these continents were close to zero in 2002, but a decade later reach about USD 800 million in Latin America and USD 600 million in Africa.

If the model implemented by the bank and its social and environmental impacts are already questionable on national soil, what about other countries? It is in this view that during this year IBASE has worked with greater strength in understanding the external role of BNDES and its impacts on affected regions, through seminars and the realization of studies together with other affected countries.

Iderley Colombini is a researcher at IBASE. To learn more visit www.ibase.br

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