By Brazil Stock Guide – Banker André Esteves defended Brazil’s National Development Bank, known as BNDES, during the Esfera Forum in Guarujá, arguing that the state-backed lender should not be seen as a Brazilian anomaly, but as one of the country’s institutional advantages.
“BNDES is not a Brazilian jabuticaba,” Esteves said, using a local expression often used to describe something that exists only in Brazil. “It is the opposite. It is a Brazilian quality.”
The founder of BTG Pactual (BPAC11) said the bank is going through a period of “discipline, assertiveness and functionality” under the leadership of Aloizio Mercadante. In his view, Brazil has in BNDES an important instrument for long-term financing, provided it is used properly.
Esteves compared BNDES with development-finance institutions in other countries and cited the U.S. International Development Finance Corporation, or DFC, as an example of an agency that has been expanding its budget, mandate and responsibilities.
“We just cannot misuse it,” Esteves said. “It is a spectacular instrument, and it is being well used.”
The banker also praised TCU Consenso, a mechanism created within Brazil’s federal audit court to mediate disputes among the public sector, companies and oversight bodies. According to Esteves, the model has helped unlock relevant infrastructure investments by reducing legal and regulatory deadlocks.
Esteves said he is not overly worried about Brazil’s economy. The country, he argued, has already faced far more severe situations, including hyperinflation, banking crises, high unemployment, difficulty rolling over public debt and low regulatory predictability. Today, he said, Brazil has strong foreign-exchange reserves, a manageable current-account deficit and more mature institutions.
His main concern was institutional, not macroeconomic. Esteves said Brazil is facing a dispute between what he called the “institutional Brazil” and the “non-institutional Brazil,” pointing to informality in the fuel sector, failures in financial-system controls and the Banco Master case as examples of risks the country cannot afford to normalize.
“This war is here,” Esteves said. “The economy is easy to fix. This war between institutional Brazil and non-institutional Brazil is the one we cannot lose.”
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