PT wants public banks in infrastructure consortia and as guarantors of loans

The plan for the eventual new government of ex-president Luiz Inácio Lula da Silva (PT) should foresee the use of public banks to try to resume economic growth.

One of the proposals being discussed by members of the PT campaign is that BNDES (National Bank for Economic and Social Development), Banco do Brasil and Caixa can create a fund with resources to guarantee loans from private companies.

This fund, therefore, would act as a guarantor for Brazilian companies to be able to raise money from national and foreign financial institutions.

“These banks should not act only with the offer of credit. There are other mechanisms such as the constitution of a guarantee fund to provide more security for private companies to take out credit,” said deputy Alexandre Padilha (PT-SP), Lula’s former minister. . Padilha has been selected by the campaign to communicate with financial market agents.

In the discussions for the Lula-Alckmin government plan, the PT has designed models to stimulate the country’s growth, mainly through the reduction of inequalities (strengthening of social programs) and the expansion of public and private investments.

as showed the Sheetthe PT project includes a program of works along the lines of the former PAC (Growth Acceleration Program), to increase public spending on infrastructure and logistics.

However, the ex-president’s campaign team makes it clear that the concessions will continue in Lula’s eventual new term.

Padilha also stated that, in this area, there is an intention to make public banks able to participate in consortia in infrastructure bids and concessions.

It is common for companies and institutions to form consortia to participate in a concession auction, for example, for works in basic sanitation. Lula’s allies defend that public banks increase their participation in these groups to encourage investments.

In terms of granting credit, PT’s plan is to focus on micro and small companies and expand sustainability projects.

Therefore, the model of national champions, the PT management policy to facilitate credit for large companies, should not be resumed.

“Former President Lula wants to stimulate credit for micro and small companies, which are the ones that have the most difficulty in accessing these resources. Another priority is technological innovation,” said Padilha.

During the Lula and ex-president Dilma Rousseff (PT) administrations, the BNDES received contributions from the Treasury and, with reinforced cash, offered low-cost credit to companies.

The policy of national champions consisted of selecting Brazilian companies to become giants in the sector and be able to compete in the international market. This initiative came to be criticized under accusations of privileging political allies.

After the inauguration of Jair Bolsonaro (PL), BNDES hired an audit to investigate operations between 2005 and 2018 with some of these companies, such as JBS, Bertin and Eldorado. The report found no evidence of corruption in eight investigated operations.

In the current management, the financial institution has reduced the volume of credit compared to PT administrations. In addition, it has given less focus to industry and prioritized the agribusiness sector — Bolsonaro’s electoral base.

At PT, future plans for the BNDES are discussed, among others, in a specific group at Fundação Perseu Abramo.

The group has two former ministers of the extinct Ministry of Development, Industry and Foreign Trade, Fernando Pimentel and Mauro Borges, and debates the role of public banks and the industrialization of the country.

Pimentel is emphatic in his criticism of the role of BNDES today, under Bolsonaro’s command. “It is necessary to resume public financing. No industrial policy will work if you have a macroeconomic orientation that favors the financial market,” he said.

Under Bolsonaro, public banks are in the crosshairs of privatization

A pre-candidate for reelection, Bolsonaro has presented proposals for his new government plan in speeches and statements in recent months. There is still no coordination for the economic area in his electoral campaign.

The project cited by the president and minister Paulo Guedes (Economy) has been along the lines of accelerating privatization. Guedes has already mentioned the intention to sell, in the coming years, public banks, such as Banco do Brasil and Caixa Tem, Caixa’s digital arm.

Banco do Brasil and Caixa have been going through an asset sale process since 2016, still under the government of former president Michel Temer (MDB).

During the Bolsonaro administration, these two financial institutions threatened to leave Febraban (Brazilian Federation of Banks) because of friction that involved the publication of a letter in defense of democracy. But then they backed off.

The controversy involved a manifesto that defended institutional harmony in the country and displeased the government, which saw in the text criticism of Bolsonaro amid attacks on members of the STF (Supreme Federal Court).

Other campaigns also differ on public banks.

Economist Nelson Marconi, main economic adviser to Ciro Gomes (PDT), defends that the BNDES return to financing exports, which, according to him, has not happened in recent years.

“It’s a very serious problem because, in order to develop, you need to export. Other countries do it, aren’t we going to do it?”, questioned Marconi.

Ciro is third in the voting intention polls. In a meeting with businessmen, he has defended expanding the BNDES’ capital. In 2018, he presented the proposal to capitalize the development bank with resources from international reserves.

“Today, the bank has become a project office. We understand that this activity to help in the formation of projects is important, but it has to resume financing activity”, said the economic “guru” of the PDT pre-candidate.

Responsible for the economic program of the pre-candidate Simone Tebet (MDB), economist Elena Landau criticized the management of BNDES in PT governments. “More than BRL 300 billion were spent on subsidies for the business elite, which is equivalent to more than ten years of Bolsa Família, and that didn’t generate anything.”

For her, the bank has to resume its prominent position in privatizations and has the capacity to act as an arm for the PPI (investment partnership program).

“BNDES has the capacity to have its own funding. It is a solid bank and has currently worked well in the financing of projects, such as sanitation”, said the economist.

In the case of Caixa and Banco do Brasil, Landau argues that these institutions have already defined functions, such as a focus on housing and agriculture, respectively. “It is not possible to mismanage this function and grant loans in the wrong way.”