President-elect Luiz Inácio Lula da Silva (PT) slammed the hammer down defining that the current Ministry of Economy will be split into three portfolios, one of which is Finance, the other the Ministry of Planning and the third the Ministry of Industry and Commerce and Services.
The confirmation was disclosed during an interview this Wednesday (7) by the coordinator of technical groups of the transition cabinet, former minister Aloizio Mercadante, alongside members of the Industry, Commerce and Services WG.
Mercadante also stated that the president-elect also defined that the BNDES (National Bank for Economic and Social Development) and the export promotion agency, Apex, will fall under the jurisdiction of the Ministry of Industry, Commerce and Services, which will be recreated.
The members of this technical group also stated that they are going to look for ways to increase the so-called funding —the resources for BNDES loans—, without the help of public resources. They also defended a reform of the TLP (Long-Term Rate), seen as inefficient, to make investments in Brazil viable.
Members of the technical group for Industry, Commerce and Services of the transition cabinet granted an interview to journalists, this Wednesday afternoon (7).
Mercadante added that the future government has already defined the recreation of the three ministries, but added that there is still discussion regarding their scope. A redefinition of what would be the Ministry of Planning, Budget and Management would be under study.
There may be a transfer of responsibilities for long-term planning to the MDIC, leaving the Ministry of Planning with only the most momentary budget issues, such as people management and annual budget issues.
This model would create an extremely strengthened Ministry of Industry, Commerce and Services, which is already being coveted by several important players in the transitional cabinet. The name of the elected vice-president Geraldo Alckmin (PSB) was even considered at the beginning of the transition work.
Another quoted is the former governor of Rio Grande do Sul Germano Rigotto (MDB), who is part of the technical group for the area. Rigotto was coordinator of the government plan for the emedebist Simone Tebet in the presidential elections, a candidate who later supported Lula in the second round.
The technical group also reported that it was a request and recommendation from its members to the future government that Apex and BNDES integrate this ministry, which ceased to exist during the administration of Jair Bolsonaro (PL). Afterwards, however, Mercadante stated that Lula had already decided on the issue.
“The president made it very clear and those who tried to argue in another direction did not go beyond the preliminary with him. The Apex and the BNDES will be in the new Ministry of Development. and expanding the market for Brazilian products in the past. And he thinks that an offensive foreign trade policy is needed and that it is not confused with the essential role of the Itamaraty in Diplomacy. But it needs to be focused and bold and deal with the promotion of Brazilian products” , stated Mercadante.
Control of Apex has been the subject of dispute in recent years, between the Ministry of Foreign Affairs and the economic area. Diplomats argue that export promotion work is complementary to diplomatic activities, which is why they defend unity. On the other hand, there is the argument that the promotion of exports is more related to industrialization policies, which is why the agency must be linked to the economic area.
Regarding the BNDES, Mercadante defended that it needs to play a strong role again in the Brazilian reindustrialization process. The former minister and one of the strong men in the transitional cabinet criticized that the bank currently lends more resources to agriculture, around 25% of loans, than to industry, around 19%.
“These are two very clear determinations by President Lula”, concluded the former minister regarding the position.
TLP REFORM AND BNDES FUTURE
The technical group also defended the reform of the TLP, to leverage investments in Brazil. The rate is established for BNDES operations. One of the evaluated proposals is the creation of a “menu” of fees, depending on the term of the loans.
“What is under study is that, first, as it is, it is inefficient. As it is established, it has no effectiveness from the point of view of financing investment in Brazil. Therefore, it has to be reformed,” said the economist Mauro Borges Lemos, former minister and one of the coordinators of the technical group.
“The TLP is rigid. Not only is it very high, as it is, it is not flexible. So an idea we are working on is a menu of TLPs, depending on the investment terms. Of course, an interest rate of a five-year investment is completely different from an interest rate for a 30-year investment. The payback time has to be entirely related to the interest rate that the borrower will pay”, he added.
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