Green economy and Russia will be challenges for Rousseff at Banco do Brics

when the president Luiz Inacio Lula da Silva arriving in Shanghai, on the final leg of the trip to China, you will be met by an old acquaintance. At that time, the former president Dilma Rousseff will be in charge of the New Development Bank (NDB), the official name of the Brics Bank, a bloc formed by Brazil, Russia, India, China and South Africa.

With US$32 billion in projects approved since 2015, the bank currently invests US$4 billion in Brazil, mainly in highways and ports.

Scheduled to take place between March 29 and 31, the meeting with Lula in Shanghai, where the NDB headquarters are located, should be marked by the official inauguration of dilma at the bank that she helped found in 2014.

According to experts consulted by the Brazil Agencythe institution’s new commander has the opportunity to expand the bank’s international insertion, but will have two major challenges: boosting projects related to the environment and circumventing the geopolitical impact of western retaliations against Russia, one of the founding partners.

Regarding the green economy, the main challenge of dilmawhich faced conflicts with the government’s environmental area in both Lula’s terms, will not be adapting to the new environmental requirements of infrastructure projects.

At the 27th United Nations Climate Conference (COP-27), in Egypt, the NDB made a commitment to increase financing for environmentally sustainable projects, but the success of this mission depends on the willingness of China and Russia to inject money into this type of enterprise.

“At this point, it will depend more on who puts the money and finances the projects, mainly Russia and China, which do not have this environmentalist profile, deciding to put values ​​in more environmental projects. The adaptation of Dilma the green economy profile is the least of the problems”, says Carla Beni, economist and professor of MBAs at Fundação Getulio Vargas (FGV) in São Paulo. She, however, recalls that China can use the bank to soften the image of a large emitter of carbon and finance these projects.

Articulation

A doctor in international relations at the University of Lisbon and a member of the Portuguese Political Science Association, economist Igor Lucena agrees. For him, the articulation between the member countries of the BRICS bank it will be important for partners to present green sustainability projects in the medium and long term.

“We know that these projects are not simple, they take time to become successful, like the green hydrogen in Ceará, but they are important projects and that can be for the president Dilma a legacy and a mark of his management within the bank. So, this will have to be done in partnership with the member countries and, perhaps, make it a requirement for new countries that want to join the bank, the possibility and the need to invest capital in this green project”, he suggests.

Russia

Another challenge that Dilma will face at the helm of the NDB will be the resistance of Western countries towards Russia. According to Lucena, sanctions due to the war in Ukraine are preventing the bank from issuing bonds in the European and North American financial markets. The institution’s new president will have to find options for raising funds outside the Brics.

“There will be a greater need for the president Dilma articulate with countries not linked to sanctions against Russia so that the bank can issue bonds, debt in states and regions that are capable of absorbing these papers and providing financing capillarity to the bank. Perhaps this is the greatest challenge for the former president Dilma within the Brics: Russia’s international situation and how it impacts within the bank itself”, says Lucena.

Carla Beni acknowledges the difficulties brought about by the war in Ukraine and the rise in international interest rates, but says that Dilma has one element in its favor: the restoration of Brazil’s image abroad after Lula’s inauguration. “Management of dilma it can improve the bank’s image and relevance and this strengthens the position, because the government has announced and is making it very clear that it wants to strengthen Brazil’s alliance with the world. President Lula opened the government by saying that Brazil has returned to the negotiating table”, he explains.

Experience

Another important element pointed out by the two specialists is in the CV of the new commander of the NDB. The presidents of Russia, Vladimir Putin, and China, Xi Jinping, were in charge of the countries when dilma was President of the Republic. This, according to them, gives political savvy to the dilma.

“A former president [de um país], whoever he is, is relevant because he has access to other heads of state. For the bank itself, the indication of the dilma had a positive signal. It has a detail that people don’t pay much attention to. The former president of Brazil was one of the founders of Banco do Brics in 2014, so she has an internal representation in there and a transit that is very well seen from the perspective of the bank”, recalls Beni.

“dilma There are two fundamental points that can mark your management. First, there is a much greater willingness on the part of China to move forward with the NDB, but also to bring new partners into the bank. In other words, the possibility of new resources entering the bank and this also leverages the capacity of Brazilian companies, which is a positive factor”, highlights Lucena.