Challenges and Opportunities for Maximizing the Utilization of the New Development Bank in Brazil
https://doi.org/10.24833/2071-8160-2024-1-94-86-112
Abstract
Initiating its operations in 2016, the New Development Bank (NDB) disbursed close to US$ 14.6 billion by the conclusion of 2021. However, Brazil received only US$ 1.86 billion (12.8%) of this sum, marking it as the recipient of the least funding from the Bank thus far. As the NDB approaches its seventh year of operation, it becomes imperative to assess its lending trajectory to Brazil, scrutinizing both the disincentives and the potential for augmenting loans to the country. With this objective in mind, this article endeavors to delve into the obstacles and opportunities for enhancing the NDB’s utilization in Brazil. Our hypothesis suggests that despite the recent surge in operations, there remains room for advancement, particularly in light of the political developments unfolding in Brazil in 2023.
Methodologically, the study hinges on analyzing NDB financial data, conducting interviews with pertinent stakeholders in Brazil, and scrutinizing and contrasting the financing institutional frameworks of the NDB and the Brazilian Development Bank (BNDES). Our findings indicate that: i) access to the BNDES partially offsets the necessity for Brazilian firms to seek loans from the NDB; ii) a rigid institutional framework within the NDB and the Brazilian government impedes project approval and proposition; iii) all loans to Brazil thus far have been denominated in US dollars, diminishing their attractiveness; iv) there has been a lack of encouragement from the Brazilian national government, attributed to the reorientation of Brazilian foreign policy following the 2016 impeachment. Consequently, achieving a more prominent role and usage of the NDB necessitates not only an institutional reassessment of certain approval processes within the Brazilian government but also a more active, assertive, and collaborative stance from the Bank itself.
Keywords
New Development Bank (NDB),
BRICS,
multilateral banks,
development financing,
international monetary system,
Brazil
Supporting agencies: We wish to acknowledge the National Institute for Humanities and Social Sciences (NIHSS), South Africa for the supporting this research. Grant Ref: BRI22/1215.
About the Authors
Bruno De Conti
University of Campinas, Brazil; Durban University of Technology, South Africa
Brazil
Brazil
Bruno De Conti – PhD in Economics, Associate Professor, Institute of Economics; Associate Professor, Department of Public Administration and Economics
353 Pitágoras Street, Campinas, Brazil, 13083-857
Cyro Faccin
University of Campinas
Brazil
Brazil
Cyro Faccin – Master’s student in Economic Development, Institute of Economics
353 Pitágoras Street, Campinas, Brazil, 13083-857
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For citations:
De Conti B., Faccin C. Challenges and Opportunities for Maximizing the Utilization of the New Development Bank in Brazil. MGIMO Review of International Relations. 2024;17(1):86-112. https://doi.org/10.24833/2071-8160-2024-1-94-86-112
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