Author: kyunghoonkim0208

BNDES鈥� multidimensional retreat from the Brazilian economy

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Brazil is in a crisis again. The COVID-19 pandemic has spread across the country and听听has led to a massive health crisis. Investment outflows have been听听and the Brazilian real has听 dramatically. The Brazilian economy is set to again after three years of weak positive growth.

Brazil鈥檚 development bank Banco Nacional de Desenvolvimento Econ么mico e Social (BNDES) has announced some听听to deal with the financial instability caused by the COVID-19 pandemic. However, these measures are being听听for being insufficient. Rather than being a temporary policy mistake that can be corrected easily, BNDES鈥� passive response is linked to the bank鈥檚 structural retreat from the economy over the past five years.

During the 2000s, BNDES听was acclaimed as a catalyst of the country鈥檚 economic growth. Globally, developing countries such as saw the rise of BNDES as something favourable and sought to mobilise their own national development banks.

By acting as of major domestic companies, BNDES played a key role in Brazil鈥檚 state-activist growth model of which the observers have labelled 鈥�,鈥� 鈥�,鈥� or 鈥�.鈥� Furthermore, BNDES actively supported national champions鈥� strategy by financing export and investment activities. During and after the global financial crisis, BNDES鈥� role extended and was used by the government to carry out . Read More »

Lean on me: Development financial struggles and national development banks

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National development banks are in fashion and here to stay. A number of countries benefited from the global economic boom during the 2000s as exports and commodity revenues surged. These countries鈥� governments stored some of the current and fiscal account surpluses and used the capital to expand state financial institutions. Two prominent types of institutions have grown rapidly, namely (SWFs) and (NDBs), which often have financial return and development stimulation as their core mandates, respectively. Much attention has been afforded to how these organisations鈥� activities have turned into a . For example, the Norwegian SWF鈥檚 investment spans across , including shares in more than 9,000 companies, and China鈥檚 NDBs have emerged as the developing world鈥檚 project backer.

More recently, NDBs have been identified as important agents in funding domestic development projects in a wide range of . The perceived role of NDBs is from a reactive counter-cyclical role towards a proactive patient capitalist role. Popularity in NDBs may appear to be obvious due to the rising interest in pursuing state-designed and over the past decade. While many observations have focused on the growing inclination towards state activism as catalyst to NDBs鈥� expansion around the world, this piece examines three structural challenges incentivising developing countries to mobilise NDBs.听Read More »