Mercadante defends resumption of industrialization with social welfare

The president of the National Bank for Economic and Social Development (BNDES), Aloízio Mercadante, defended, this Monday (5), the resumption of industrialization in Brazil with social well-being, so that the country can achieve the goal of ecological development sustainable. Mercadante participated in the Financing for the Great Impulse for Sustainability seminar. On the occasion, the Economic Commission for Latin America and the Caribbean (ECLAC) launched the study Financing the Big Push: Paths to Unlock the Social and Ecological Transition in Brazil.

According to Mercadante, in the 1980s Brazil had a stronger industry than China and Korea. “We lost a historic time”. For him, this is due to the lack of perspective from the ruling elite and business sectors that have lost the notion of a national development project – structuring, transforming projects, bearers of the future, of a stable market relationship and social well-being.

“We need a neo-industrialization that is transformative, that is digital, sustainable, that drives the decarbonization of the economy and creates a new historical perspective,” he said. According to Mercadante, the same challenge is imposed on national agriculture, in the sense of decarbonization. “An agriculture that preserves strategic natural resources, that gives Brazil a gigantic competitiveness in this sector”. He added that the BNDES also needs to look at the service sector, which currently generates the most jobs in the country.

On climate change, Mercadante said that if the financial system does not change, the planet has no chance of reversing the current situation, which is “devastating”. And there needs to be a change in attitude and a new financing policy, he defended.

According to Mercadante, the study launched at the BNDES headquarters is a great contribution to unlocking the social and ecological transition in Brazil. He guaranteed that the BNDES will once again be the bank for the reindustrialization of Brazil, for infrastructure, industry, decarbonizing agriculture and the service sector, in partnership with international organizations.

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In a video participation in the seminar, the Secretary of Economic Policy of the Ministry of Finance, Guilherme Mello, highlighted that ecological transformation is on the portfolio’s agenda. He informed that an undersecretary was created to discuss sustainable development, led by Professor Cristina Reis. In addition, teams from the Secretariat for Economic Policy and Minister Fernando Haddad are working with other bodies to build financing instruments and a framework to discuss an ambitious plan for the ecological transformation of Brazil.

“It is a change of attitude”, said Mello, recalling that, a few years ago, Brazil was a protagonist in the issue of combating deforestation, decarbonization and protection of its biomes, in particular, the Amazon.

He pointed out, however, that, in the last government, the Brazilian leadership in the environmental issue, “was being eroded by a series of measures and a vision of the theme of sustainability as an obstacle to development”. Now, the theme of ecological transformation is being seen as a great opportunity for development, innovation and reconstruction of the national productive base. “This is different from looking at the environmental issue as a cost to be paid and rather as a “great opportunity”.

Guilherme Mello informed that the ecological transformation plan that is being outlined will have six major axes: sustainable finance; technological densification; bioeconomy; energy transition; circular economy and new infrastructure. The six articulated axes form the basis of what is being called an ecological transformation plan. “Everyone talks to each other.”

According to the secretary, the volume of resources needed for Brazil to promote the ecological transformation in the correct time frame, which is imposed by climate change, is large and significant, and the public budget alone would not be enough. “It needs to be able to attract foreign investment, seek financing from multilateral institutions, private financing and also from the system of banks, cooperatives and development institutions, which have the capacity to leverage credit and finance investments in a very robust way.”

sustainable bonds

Some themes will contribute to the construction of the ecological transformation plan. The first is for Brazil to promote its first issue of sustainable public bonds, which dialogue with social and environmental sustainability, at the international level. After many years out of the bond issue market, Brazil returned to issue bonds in the first half of the year, which helps with the pricing curve system for these bonds.

The Treasury is working to issue sustainable bonds in the second half. Several partner countries of Brazil in South America already have expertise in issuing sustainable bonds that help attract capital and finance investments in ecological transformation. The best example is Chile, said the secretary. “And Brazil certainly has enormous potential to capture and attract investors to the environmental agenda that we are building. And bond issuance is one way to do that.”

Another theme that should appear in the debates in the coming months is the regulation of the carbon credits market, which is fundamental, according to Guilherme Mello. A robust proposal is being built so that such a market is constituted in Brazil and can, in the future, gain an international dimension, leading the country to become a creditor in the ecological transformation, insofar as it reduces deforestation and preserves its biomes. The secretary also pointed out that it is necessary to be sure that investors’ resources are being allocated to sustainable actions and that there will be no misuse of resources invested in Brazil for ecological transformation.

Another important discussion is about the sustainable nature of the investment program that will be announced by the President of the Republic in the coming months. According to Mello, in the past, the Growth Acceleration Program (PAC) was important to strengthen the country’s infrastructure, but what is wanted today is that investments, both social and infrastructure, in addition to the set of public policies, have clear sustainability criteria.

In the scope of social policies, the secretary highlighted that there is no possibility of preserving biomes, building new productive structures without thinking about the ability to generate employment and income from sustainable activities. According to Mello, it is the combination of environmentally sustainable and socially inclusive activities that will allow both the fight against deforestation, “which is the main source of emissions in Brazil”, and the construction of a green productive structure, which dialogues with new technologies. , with neo-industrialization, with the energy transition, new sources of energy and fuels, which will be based on bioeconomy, social and productive inclusion.

Guilherme Mello also addressed the issue of sustainability from the point of view of social policies. And he guaranteed that there is no way to preserve the biomes without also thinking about their ability to generate income and employment.