Brasília, August 14, 2003 (Agência Brasil - ABr) - The president of the National Economic and Social Development Bank (BNDES), Carlos Lessa, affirmed this Wednesday (13) that the bank will invest in foreign companies, especially to finance the physical integration of South America. He underlined that the BNDES's relationship with South America has existed for a long time, principally in the exportation of agricultural machinery and equipment, and that this is part of the routine of a bank that operates in the area of export financing.
At a public hearing before the Foreign Relations Commission of the Chamber of Deputies, Lessa emphasized the need on the part of South American governments to invest in infrastructure, and, as an example, he mentioned the BNDES's investment in the construction of a bridge over the Orinoco River, in Venezuela. "Brazil is the country with the largest number of frontiers, and interaction with the neighboring countries needs to be strengthened. The Caribbean is an excellent window for exporting soybeans from Roraima," Lessa offered as another example.
With respect to investments by the BNDES in foreign companies and the reservation of funds for Embraer, a national company, Lessa said that the aircraft manufacturer receives funds and that its products are exported to companies in other countries. "We have huge operations with airline companies in the US. When the BNDES establishes a line of credit for Venezuela, it's the same thing as opening a line of support for Embraer. The construction of the bridge over the Orinoco River is being financed by the Norberto Odebrecht company, and the machines and equipment that are being utilized were bought in Brazil. At the moment, the BNDES only makes loans to countries that buy Brazilian products, because there is no way I can loan money to a third country that buys from a fourth country. What the BNDES does is to finance sales made by Brazilian companies to other countries," the president of the BNDES clarified.
Lessa declared that it is the intention of the Brazilian government to intensify relations with Argentina, Venezuela, and Bolivia, but that this should also redound to Brazil's benefit. "Brazil is concerned with a new agenda enabling it to pursue a more advantageous trade diplomacy for itself. One of the concerns is that the country has a contract with Bolivia to acquire Bolivian natural gas, but the contract creates difficulties for Brazil in fixing energy rates," he said According to Lessa, Brazil is determined to intensify trade with Argentina, and Brazilian firms have already expressed interest in exporting to and importing from that country.
LESSA CALLS FOR GREATER FLEXIBILITY IN THE AGREEMENT WITH THE IMF
Today, the president of the BNDES, Carlos Lessa, once again called for greater flexibility in the agreement with the International Monetary Fund (IMF). According to him, the agreement should be renegotiated in September. Lessa argues that the country will resume growth, if public investments are calculated according to their depreciation component and financial cost rather than their overall amount. He makes a comparison with what happens in European countries.
"In order to obtain a primary surplus, it is necessary to cut investments. In Europe, investments are accepted not at their overall value, but according to depreciation together with shortened interest rates. Brazilian municipalities are only allowed to invest R$ 200 million per year, and there are 2 thousand municipalities that are in compliance with the law of fiscal responsibility, their debts have been paid, but they can't make investments. Another instance is provided by state enterprises, which are profitable, but can't invest either, because, by the IMF's definition, this would increase public expenditures," Lessa points out.
According to the BNDES, the bank will end the year with a budget of R$ 34 billion. Demand from the industrial sector has been less than what the bank projected, while demand has grown in the sector of small and medium-sized firms. The BNDES's budget in 2004 will be $ 47 billion. Of this total, 25-30% should be invested in infrastructure. When he announced this figure, the president of the bank, Carlos Lessa, recalled that the areas that the BNDES considers infrastructure are broader than those contained in the 2004-2007 Pluriannual Plan (PPA), because they include petroleum, natural gas, and telecommunications.
According to Lessa, in coming years the BNDES will invest R$ 15-20 billion annually in the infrastructure sector. As regards the merger of Varig and Tam, the president of the BNDES affirmed that he will not study the proposal until the bank receives a formal solicitation. (DAS)
