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BRAZIL: Development Bank Funds Destructive Projects, Say Activists

Mario Osava

RIO DE JANEIRO, Nov 26 2009 (IPS) - Public money in Brazil is being used by the state development bank to finance deforestation projects and others that trample rights, concentrate wealth, and encourage “imperialist” expansion of large national companies, according to activists at a three-day meeting in this southeastern city.

The National Bank for Economic and Social Development (BNDES) promotes “a deadly kind of progress,” complained indigenous leader Toninho Guaraní, describing what he regards as the abuses of the pulp and paper industry, which has fomented monoculture of eucalyptus trees in the eastern state of Espirito Santo.

In South America, Brazil behaves “exactly the same way as U.S. imperialism,” the head of the Bolivian Forum on Environment and Development (FOBOMADE), Manuel Lima Bismark, told IPS.

For instance, Brazilian firms “are plundering Bolivian natural resources” like oil and lithium, without having been granted a contract through proper tender procedures, in violation of the constitution and national laws, he said.

And they are building two dams for hydroelectric power stations on the headwaters of the Madeira river, the main tributary of the Amazon marking the border between Brazil and Bolivia, without regard for the environmental consequences, although the dams will flood land in both countries.

The “increasingly aggressive internationalisation” of mining, steel, pulp and paper, energy and agribusiness companies is only possible with the support of the state development bank, which in addition to providing subsidised loans, frequently contributes capital as a partner in the enterprise, said participants at the First South American Meeting of Peoples Affected by BNDES Financed Projects.

The bank prioritises the financing of Brazilian and foreign multinationals within these sectors, effecting “a massive transfer of public resources to large economic groups,” and promoting “an economic model characterised by monopoly, expansionism, income concentration and environmental destruction.”

Therefore, the bank should be held co-responsible for the environmental crimes, slave labour, forced displacement of local communities and other consequences, they said.

The BNDES is the undisputed leader of development financing in Brazil and neighbouring countries; its loans this year are expected to total 90 billion dollars.

The forum held Monday to Wednesday in Rio, organised by Plataforma BNDES, a network of 35 social movements and organisations, approved a document setting out this analysis and calling for greater transparency in the bank’s operations, participative assessment of its projects, the adoption of social and environmental criteria and more emphasis on small businesses, employment creation and clean energy.

Participants marched through the city centre to deliver the document to BNDES president Luciano Coutinho, who received a delegation, thanking them for their “suggestions,” but without committing himself to serious dialogue.

In fact, Plataforma BNDES is demanding a radical change in the bank’s priorities to make it truly “public,” rather than the instrument of a handful of powerful business interests. As well as putting 76 percent of its resources into loans for large companies, it has financed acquisitions that ultimately enlarged agroindustrial, ranching and pulp and paper consortia.

The BNDES, which unfortunately is helping to drain the resources of Brazil and South America, must be “democratised,” said Cândido Grzybowski, head of the Brazilian Institute of Social and Economic Analyses (IBASE). The people at large “must participate in its credit decisions,” he said.

So far, the bank has financed a “colonial occupation model,” like mining in the Amazon region, which destroys the natural environment in order to export iron ore, without promoting local social and environmental development, he said.

“Taking on the BNDES uncovers what lies at the heart of the system, which concentrates wealth and runs counter to life,” and it calls into question an economy with “large companies that can’t survive without state aid,” said João Lopes Pinto, also from IBASE, which helped organise the meeting.

Plataforma BNDES is proposing an agenda for the transformation of society and the state, property rights, credit and employment, and not just reparations for damages as has been customary so far, Lopes Pinto said. He argued for reorientation of the bank towards support for “family agriculture, small businesses based on a solidarity economy, and a different kind of development.”

Brazilian multinational corporations are caught up in several conflicts in neighbouring countries. Odebrecht, a construction firm, was expelled from Ecuador last year after accusations that its work on a hydroelectric dam was sub-standard.

The BNDES had provided 243 million dollars to finance the dam, and was left dangling when the Ecuadorean government contested repayment of the debt.

But Ecuadorean companies also abuse their power, and it is harder to take action against them than foreign firms, either because of nationalism or laws that protect them, said David Reyes, of Acción Ecológica Ecuador. In his view, it is essential to fight “destructive” development that strips forests, pollutes or wastes water, and prevents “well-being and healthy living.”

“When I was a child I wanted to see a great dam, but nowadays I hate them,” said Juma Xipaia, an indigenous Brazilian student of the Xipaia ethnic group, from Altamira. Her home will suffer from the building of the controversial Belo Monte hydroelectric power plant on the Xingu river in the Amazon.

“The project should not go ahead, because it would be a tragedy, and it is not economically viable,” because in the dry season the water flow is too low, said Antonia Melo, an activist with the Xingu Alive Movement who is also from Altamira.

The dismal prospect for Juma’s village is that the Iriri river, which flows into the Xingu, will be forced to rise and carve out a new course because of the dam. The few fish still in the river will disappear, the small-scale agriculture practised during the dry season will decrease, and river transport to the main market in Altamira will be hampered, she said.

Josiney Mendes, of the Arara ethnic group, said the area will be faced with perpetual drought, making it impossible for the 93 members of her village, most of whom make their living fishing, to continue their way of life. The same will happen to other local communities and the riverside dwellers on the Volta Grande, a huge curve on the Xingu where most of its water is to be diverted.

One after another, activists from the Movement of People Affected by Dams (MAB), landless farmers, environmentalists and researchers spoke up in criticism of the projects and companies that the BNDES supports with its loans.

Big infrastructure projects linked to regional integration tend to strengthen the transnational corporations that exploit most of Latin America’s natural and strategic resources, and their aim is penetration and territorial control, in order to extract its riches and send them abroad, said Ana Esther Ceceña, a professor at the National Autonomous University of Mexico.

Twenty thousand kilometres of roads in the Amazon transport corridor, added to routes in the Southern Cone of South America, allow “fast-growing Brazilian companies and their partners abroad” to plunder strategic resources and spread violence, which is not unrelated to the “militaristic offensive” on the continent, reflected by more military bases and war exercises in the region, the researcher maintained.

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