When defending the public bank, the president stated that his predecessor raised suspicions against the institution when he only knew how to “lie”
The president Luiz Inácio Lula da Silva (PT) returned, this Tuesday (Dec 5, 2023), to criticize his predecessor, the former president Jair Bolsonaroin defending the BNDES (National Bank for Economic and Social Development), currently headed by Aloizio Mercadante (PT).
Referring to Bolsonaro only as “a citizen who governed our country”, Lula stated that his opponent spent 4 years “raising suspicion” against the public bank.
“He said he opened the BNDES black box. In fact, she opened the black box and found his face. It was the face of a lie, of someone who never tells the truth. From someone who thinks they can lie all the time”, said Lula during his live weekly “Conversation with the President”, broadcast from Berlin, Germany. The president returns to Brazil at the end of this Tuesday and will disembark in Rio.
Mercadante, who also participated in the broadcast, said afterwards that, under his management, the bank is “an aquarium” with full transparency. “It is the most transparent public institution. This is the answer we give“, he said. Lula then replied that it is “an aquarium with money to lend”.
Shortly before, Mercadante took stock of the institution’s activities throughout the year. “The bank was losing size and relevance. We are reversing this“, he said.
Loan to Cuba
In September 2023, Cuban authorities asked the Brazilian government for greater flexibility in paying debts accumulated with BNDES (National Bank for Economic and Social Development) projects, after saying that Havana cannot afford the amount at this time. In total, the delay amounts to US$538 million (R$2.6 billion).
The request was made on the eve of Lula’s trip to the Caribbean country, where the head of the Brazilian Executive met with President Miguel Díaz-Canel. In negotiations with members of the Brazilian government, the Cubans asked for some type of flexibility from the Brazilian government, such as a “haircut” comparable to that received in the treatment of the Paris Club debt in 2015, given the scarcity of dollars, use of alternative currencies or Cuban commodity receivables.
The “haircut” concerned a discount of US$2.6 billion on Cuba’s debt with the Paris Club in 2015, which amounts to US$11.1 billion, including interest.
Delays in payment for projects sponsored by Brazil in Cuban territory began in 2016, but intensified in 2018, when payments stopped being made since June.
In addition to the debt, Cuba will still need to pay US$520 million by 2038. This puts the total transfer to Brazil at US$1.1 billion.
In 2010, the last year of Lula’s second term, the Cuban government presented receivables from the country’s state-owned tobacco industry, famous for its cigars, as a guarantee for a US$176 million loan from BNDES.
It was part of the financing for the construction of Porto Mariel by Odebrecht. The federal government’s Camex (Chamber of Foreign Trade), at the time, approved the proposal at a meeting on May 26, 2010 (read excerpt from the minutes).
The document made it clear that the conditions offered to the Cubans were exceptional. In the case of receivables, for example, what is usually accepted are external flows. Credit in dollars would fulfill this role to pay for imports of Cuban cigars, to be charged in other countries.
What the Brazilian government accepted at the time were internal flows deposited in a Cuban bank. It is a much more difficult guarantee to enforce in the event of default than it would be if the money were outside Cuba.
Other privileges of the BNDES loan for Cubans were:
- period of 25 years to pay, with 12 years being normal in these cases;
- interest rate equalization period of 25 years, when the bank’s practice is 10 years;
- 100% coverage for political risk, above the usual ceiling of 95%.
Minutes from the previous Camex meeting (April 5, 2010) show that the privileges granted to Cuba were a decision of Lula’s previous government (read excerpt). It is recorded that the then minister Miguel Jorge (Development), president of Camex, had participated in Lula’s official visit to Havana in February of that year.
Jorge reported to the other members of Camex the meeting held during the official visit. According to him, the Brazilian delegation discussed with the Cubans an additional loan of US$230 million for the construction of Port Mariel.
According to the text, the Brazilian delegation informed the Cubans of the approval of credit for the project “at its full value”, subject to a feasibility study and the presentation of guarantees.
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