Brazil’s development bank : Nest egg or serpent’s egg?
Ahead of presidential elections, BNDES comes under scrutiny
EIKE BATISTA, Brazil’s richest man, calls BNDES, the country’s state-owned development bank, “the best bank in the world”. But a former BNDES chairman, Luiz Carlos Mendonca de Barros, says it is a serpent’s egg—a reference to a film about the origins of the Nazi party. And a former central-bank chief, Gustavo Loyola, dubs the bank “Jurassic” and reckons its links with the treasury recall one of the worst periods of military rule. The violence of the rhetoric reflects growing controversy over BNDES and over state interference in the economy.
BNDES’s rate of new lending now far exceeds that of the World Bank. Its gross disbursements reached 137 billion reais ($69 billion, see chart) in 2009, double the amount in 2007. Its political connections are impressive, too. The finance minister is a former head of the bank and the bank’s current head is favourite to succeed him if Dilma Rousseff, the candidate of the ruling Workers’ Party, becomes president. ...
