President of BNDES cites the Washington Consensus, which preaches development and neoliberalism: “It’s not a consensus even in Washington anymore”
The president of BNDES (National Bank for Economic and Social Development), Aloizio Mercadante, defended this Thursday (April 25, 2024) State financing for industrial development. According to him, the Washington Consensus, in the United States, “there is no consensus even in Washington anymore”.
The Washington Consensus is a set of economic recommendations formulated in 1989 to contain the crisis and promote the development of Latin American countries. Written based on a text by economist John Williamson, from the International Institute for Economy, it has neoliberal ideas –such as the opening of markets, privatization programs and the reduction of the State’s role as an inducer of economic development, including industrial development.
According to Mercadante, geopolitical issues and the covid-19 pandemic caused the theory to be partially abandoned. “This idea of a minimum state, deregulation, privatization, as if this would solve all development problems, these values are being replaced by a very intense resumption of industrial policy, of development promotion policy”, he declared.
He cited an IMF (International Monetary Fund) study of 2,000 industrial policy measures that use subsidies. Two thirds of them are concentrated in China, the EU (European Union) and the United States. According to the survey, the probability that more subsidies will be taken in the coming months is 73%. “It’s a paradigm shift”, assessed Mercadante.
“It is evident that we do not have the same fiscal capacity, we cannot compete with the resources that we are seeing. We have some and we have to use it very intelligently”, he said, adding that the moment also brings “a window of opportunity for Brazil”, which has the potential to lead the energy transition in the world.
Finally, Mercadante once again defended the increase in the amount allocated to the government’s neo-industrialization plan, which has R$250 billion from BNDES to finance the sector until 2026. The amount corresponds to 80% of the R$300 billion package.
According to the president of BNDES, R$96.9 billion was used until March. “The 1st quarter of the year saw a 68% increase in consultations and a 92% increase in approvals. We exceeded R$100 billion of the R$250 billion we promised.”
Mercadante spoke at the opening of the forum “Financing for neoindustrialization: mobilizing credit for innovation”, held by ABDE (Brazilian Development Association) and BNDES, in Rio.
