Category: Brazil

BNDES鈥� multidimensional retreat from the Brazilian economy

kyunghoonkim0208Leave a comment

BNDES_Building

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 »

When does state-permeated capitalism work?

Andreas N枚lkeLeave a comment

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In recent years, state capitalism has become an important buzzword in the development economics discussion (again). In view of the very different ways in which this term is used, Ilias Alami and Adam Dixon recently highlighted the dangers of using the term too loosely in an article in . In view of its recent popularity, state capitalism could suffer a similar fate to the terms “neoliberalism” or “financialisation” by becoming a very loose rallying cry without any significant analytical value. To overcome this problematic situation, Alami and Dixon propose that future research should (1) develop a theory of the capitalist state, (2) circumscribe the time horizons of state capitalism, and (3) locate state capitalism more precisely in territorial and geographical terms.

Although I am not sure whether the genius can be put back into the bottle by developing a unified theory of the state (too many different theoretical traditions are involved by now), I am very sympathetic to the latter two demands. Our recently published book “State-permeated Capitalism in Large Emerging Economies” () is a modest contribution to the latter goals. It deals with the economic development of Brazil, India, China and South Africa between 2000 and 2015. Departing from a 鈥�鈥� perspective, we have developed an ideal type of state-permeated capitalism – as opposed to liberal, coordinated and dependent capitalism – and examined to what extent large emerging markets are approaching this ideal type. Read More »

Facing a liquidity tsunami? Profit, risk, and discipline in emerging markets

Ilias ALAMI1 Comment

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In April 2012, at the White House on her first visit to the United States since her election in 2010, Brazilian president Brazil Dilma Rousseff scolded advanced capitalist economies for unleashing a 鈥�tsunami de liquidez鈥�, a 鈥榣iquidity tsunami鈥�, onto the developing world. The expression liquidity tsunami suggests that the sheer scale and volume of financial capital flows to developing and emerging markets had become an issue. It indicates that these quantities were overwhelming and could trigger devastating damages.听

This in itself is puzzling. Have we not been told by development economists and practitioners that financial capital flowing into the poorer areas of the world economy is something good and desirable? That one of the main causes of underdevelopment is actually the lack of capital and domestic savings in developing countries, and that this should be compensated with foreign capital inflows? Following this line of reasoning, vast swathes of financial capital flowing into emerging markets surely should be seen as a boon.

And there was some truth to that. The capital flow bonanza from the mid-2000s to late 2013 (coupled with the primary commodity super-cycle) did deliver some benefits to emerging markets. It helped governments fund themselves at better conditions. It provided the material basis for significant redistribution via a number of social policies. It contributed to economic growth performances much higher than over the previous decade. It also made a minority of people much richer in a very short period of time. In sum, the capital flow boom temporarily helped deliver some economic and social gains, and this was instrumental in consolidating social contracts between governments and their populations.Read More »

Brazil鈥檚 Election in the Shadow of the Impeachment

Carolina AlvesLeave a comment

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Earlier this month the final deadline arrived for political parties in Brazil to register their candidates for the presidential election in October 2018. The official launch of candidates allows us to discuss more concretely the political forces and players that will be shaping the election. It means that coalitions, alliances, and vice-president choices have taken place. So we asked, what can be said about the first candidates leading the polls? What are the main political forces underlying this election?

The Brazilian political landscape has been extremely polarised since the impeachment of president Dilma Rousseff in 2016. If the left-right dichotomy has recently been considered blurry or outdated, in Brazil one can argue that, due to the impeachment, this dichotomy has a new face, with the coup winners on one extreme and the coup losers on the other.

The nuances between right and left on the political spectrum have largely been overshadowed due to this dichotomy, with one side leading a for a clean and corruption-free country and the other side highlighting the . The political mayhem reached its peak with Lula’s trial and conviction in April, which has led to a great deal of uncertainty over this period (see recent Lula鈥檚 from prison in the NYT).

President Termer may have been able to 鈥渒eep the markets calm in鈥� throughout such political instability, but Brazil鈥檚 economic recovery has been , hardships for many families have increased (see IBGE indicators for increases in , , and ) and the country has just set a new record for homicides at in 2017, with violence against women also increasing. There is a lot at stake in this election.Read More »