The Ministry of Economy managed to pay off half of the debts accumulated by the Brazilian government with international organizations, thanks to a reallocation of resources made at the end of the 2021 lights.
The payments, which total R$ 3.64 billion, took place days before Brazil assumed a seat as a non-permanent member of the UN Security Council, on Saturday (1) — the inauguration was this Tuesday (4). The UN was one of the bodies in which Brazil was at risk of losing the right to vote due to debts.
The lack of payment has already embarrassed the country and damaged its image abroad. Before the transfer, the accumulated debt was around R$7.8 billion, according to sources in the economic area.
On Tuesday, the Ministry of Foreign Affairs sent an official letter to the Economy to thank the “prompt disbursement” of the resources. “Payments made in the last week of 2021 avoided loss of vote in several international organizations, of which the United Nations Organization is a more notorious example, in whose Security Council Brazil has just returned to occupy a seat”, says the signed document. by the deputy general secretary, Paulino Franco de Carvalho Neto, and obtained by leaf.
“The country will also maintain its full participation in the World Trade Organization, the International Labor Organization and the Organization for the Prohibition of Chemical Weapons, among others.”
The money was released through an ordinance of the Special Secretariat for Treasury and Budget of the Ministry of Economy, published in an extra edition of the Diário Oficial da União on December 21st.
To the UN alone, the government paid R$ 394.8 million. Another R$ 2.7 billion went to the payment of quotas in institutions such as the NDB (New Development Bank, known as the Brics bank), chaired by a Brazilian, former secretary of Foreign Trade and International Affairs Marcos Troyjo.
There were also transfers to the International Criminal Court, Mercosur and the Organization of American States. The scope for reallocation of expenditures was pointed out by the Ministry of Economy in an extemporaneous report evaluating the Budget’s revenue and expenditure, published without fanfare on 20 December. The document indicated the possibility of raising discretionary expenses by R$ 4.4 billion.
Technicians explained to leaf that fiscal space came about because the government was authorized by Congress to pay retroactive expenses of emergency aid paid to single-parent-headed families with extraordinary credit resources. This type of value is outside the spending ceiling — a rule that limits the advance of expenses to inflation.
Thus, R$3.74 billion left over from Bolsa FamÃlia — a benefit that was no longer paid to some families in much of 2021, to be replaced by emergency aid, more financially advantageous — could be allocated to other expenses, including contributions to international organizations. In some situations, the transfer of an allocation to another requires authorization from Congress. However, in September 2021, lawmakers endorsed a change in the Annual Budget Law that gave greater flexibility to the Executive Branch.
According to the text, the Ministry of Economy could make, on its own, the expansion of discretionary expenditure allocations (which include costing and investments), as long as they were carried out after the last scheduled Budget report, published on November 22nd. Another condition was that the ordinances opening new credits were issued by December 31, 2021.
The approval of this provision was considered a victory by the Ministry, after the Congress had, at the end of 2020, diverted a good part of the resources destined to the settlement of debts with international organizations to boost works in congressional strongholds.
At the time, the articulation was commanded by the Ministry of Regional Development, headed by Rogério Marinho (PL), who was opposed to the head of Economy, Paulo Guedes. The relocation put Brazil in an embarrassing situation, as the country almost lost its right to vote at the UN and defaulted on the NDB.
The strategy adopted this year gave the government greater freedom to reduce the billionaire liabilities with these institutions. The subject had already been the target of alerts by the TCU (Court of Accounts of the Union), as the government would assume expenses without them being foreseen in the Budget, violating the Constitution.
Despite the relief, the situation of debts with international organizations is still worrying, as not all liabilities have been regularized. In the letter sent to the Economy, Itamaraty warns, for example, that the variation in the rate of foreign currencies made it impossible to fully pay debts with the IAEA (International Atomic Energy Agency) and with the FAO (United Nations Food and Agriculture Organization ). Despite paying off part of the pending issues, there are still remaining debts with institutions like the NDB. In these bodies, therefore, Brazil is still under threat of losing the right to vote.
In addition, Congress promoted significant cuts in the appropriations foreseen for this segment in the 2022 Budget. According to technicians, the amount left by congressmen is not even sufficient to honor the contributions foreseen for the year — indicating the risk of a new increase in debt.
One measure to try to mitigate the weight of these contributions was the reduction of Brazil’s participation in the UN budget, which will go from the current 2.948% to 2.013% from 2022 to 2024, according to the MRE’s letter.
When contacted, the Ministry of Economy stated, through the Secretariat for International Affairs, that it could not detail the data. “In view of the end of the budget execution referring to payments to international organizations having taken place on December 31, 2021, the requested data has not yet been processed”, says the note. According to the folder, the country is still awaiting confirmation of receipt of transfers by international organizations. The expectation is to release the information from January 10th.
Itamaraty did not respond until this report was published.
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