Panel SA: It would be important to have BNDES more active, says chief economist at Fiesp

Fiesp’s chief economist, Igor Rocha, believes that it is time for BNDES to grow in credit to small and medium-sized companies.

“At the moment when there is an interest rate reaching 13%, and an extremely depressed demand, the credit conditions are very delicate. It would, indeed, be important to have a more active BNDES”, he says.

According to the economist, who took over the position at the entity this year, Fiesp has already positioned itself on interest rates and will not comment on Copom minutes.

Mr., who arrived at Fiesp a few months ago, how do you think the way for the industry to regain prominence? I arrived three months ago. In fact, the industrial issue has a much more favorable environment for debate. Internationally, the industry agenda is central to the recovery of economies, above all, connected to sustainability. And Brazil cannot be left out of this agenda. The industry has suffered, for decades, with the process of de-industrialization.

It has to resume the discussion on new, modern bases, connecting with the issue of sustainability for the transition of the medium and high technology sectors, both from the point of view of production and foreign trade. And there are key issues, such as infrastructure, education, increased productivity, decarbonization.

Considering the impacts of the pandemic and war, is there anything the government could do, offer more benefits to drive growth? It ends up being very difficult to think about it that way. Anything we do right now, based on what can be done now, are short-term palliative measures. I think that the fundamental thing, if we think about recovering the industrial sector, is to reflect on structural issues, which need to be based on, and that is the great highlight, in planning, in the recovery of the planning of the Brazilian economy. Brazil stopped planning.

Planning has been heavily demonized by misinterpretations. Families plan, companies plan. Brazilian state also needs to plan. And in this planning, the development of the industrial sector is central, connected, obviously, to the issue of infrastructure, which is a fundamental, although not sufficient, condition for growth. But without a doubt, it is fundamental to the productive sectors and to agribusiness as well.

And the credit? Has the BNDES been efficient in releasing financing?The BNDES has historically a fantastic technical staff, so much so that it has acted very positively in the preparation of infrastructure projects, which has been important for the country. But it has, on the other hand, left much to do with credit for companies, especially small and medium-sized ones. Although it is worth noting, Pronampe and the entire framework that the government made during the crisis with the guarantee funds. It was very important to support these companies.

But when the interest rate is getting there, let’s round it up to 13%, and demand is extremely depressed, credit conditions are very delicate. It would indeed be important to have a more active BNDES, not only from the point of view of providing credit or funding. But for this credit to actually reach the end for those companies that need it, because we have this difficulty of credit reaching small and medium-sized companies.

And how is the Fiesp indicator dissemination agenda and positioning going? Shortly after the new management, by Josué Gomes da Silva, took over Fiesp this year, you published a tough statement about interest rate hikes in February, but then it stopped. What is the orientation?It was an intention to show: Fiesp’s position is this. Fiesp will not comment on Copom’s minutes, in the sense that Fiesp will be concerned with structural rather than conjunctural issues.

Today, we need to discuss in Brazil how to recover investment. What we have seen in recent years in Brazil, and I’m not talking about institutions A, B or C, but in Brazil, there were economic analysts making comments like: “look, the public debt got worse, look, it got better, interest went up so much, went down so much”. And there? What does this actually imply from a growth point of view? Fiesp is now very focused on this structural reflection.

That’s why we are in this very fruitful debate with Febraban [Federação Brasileira de Bancos, que abriu um grupo de trabalho com a Fiesp sobre os juros] to see measures that can be taken, actions, so that we have, structurally, a lower interest rate in the Brazilian economy. And that benefits companies’ access to credit and, consequently, has a positive result for the growth of the economy.

Are Fiesp’s proposals for this year’s election candidates ready?It is in the elaboration stage. We are discussing. There will be the institutional process that happens in all elections. Fiesp is a relevant actor in the dialogue. This proposal document will be prepared via our superior councils.

And what will be the highlights?There is certainly tax reform, which should be central. A comprehensive and isonomic reform. It is not about any benefit, but about being equal for all sectors of the economy. The document should also include the importance of public investment, which, in fact, has reached complicated levels in recent years.

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PhD from the University of Cambridge and a member of the Sidney Sussex College and the Cambridge Society for Social and Economic Development, in the United Kingdom. He has a master’s degree in economics from Unicamp, and a degree in economics from PUC-SP. He was the director of economics at Abdib and is now the chief economist at Fiesp.