Home BRICS Brazilian Contribution to BRICS Bank in 2019 Is in Check

Brazilian Contribution to BRICS Bank in 2019 Is in Check



After finding it difficult to pay this year’s $ 300 million contribution to the New Development Bank (the Brics bank) in the midst of budget needs, the government failed to include payment in discussions on next year’s Budget . As the transfer should be done by January 3, this puts in doubt the country’s investment in the institution.

Technicians from the economic team told Valor on Thursday night (30/08) that the contribution was not included in the budget proposal, but that there could still be a last-minute change. Wanted, the Ministry of Planning said that it would not comment on the Budget – the official announcement of which is scheduled for Friday afternoon (31/08).

Before the announcement, the ministers of the economic area will have in the Planalto a final meeting on the budget proposal.

As the Valor published a week ago, the government began discussing the postponement of the installment for next year to allocate these resources to areas of the Executive with demand for funds. According to the Executive’s aides, it was necessary to relocate resources to organs such as the Mint because the state provides services that could directly harm the population, such as issuing passports.

Finance Ministry last week evaluated that postponing the injection in the bank of BRICs would not cause problems for the Brazilian participation in the institution precisely because the deadline for payment is January 3 of next year – which would open the way to pay off the account in 2019.

Under this plan, the budget allocation foreseen in 2018 for the BRIC bank would be canceled, and the payment would be foreseen in the 2019 Budget. With the inclusion in next year’s piece, the technicians’ assessment is that the country’s commitment it would be thus assured – which, now, is in question.

To date, according to the bank’s financial statements, none of the members of the Brics have failed to make their contributions according to the agreed rules. Each of the five members of the bloc – Brazil, Russia, India, China and South Africa – should allocate US $ 2 billion to the institution in seven installments in total.

According to the Ministry of Finance, Brazil has already paid US $ 700 million to the bank and now has to pay another US $ 1.3 billion in four installments. Two of $ 300 million each, which have to be deposited on January 3, 2019 and January 3, 2020, and another two of $ 350 million that need to be paid January 3, 2021 and January 3, 2022 .

The bank’s 2017 financial statements confirm that Brazil has already paid three installments to the institution, which totals US $ 700 million, and that is the same amount that was injected by India, China and South Africa. Only Russia advanced another portion until the end of last year – reaching US $ 1 billion in contributions.

Bank was created jointly by members of the BRICS group for investments in infrastructure projects and sustainable development projects. Government officials had already admitted last week that the proposed postponement could have international repercussions, especially in the scenario of electoral uncertainties involving the succession of President Michel Temer.

When requested, the Itamaraty informed that it was not aware of any study of the economic area in this sense and that it would not therefore issue a comment on the subject.

BRIC bank payment is not the only cut being discussed in 2018. There is an amount of $ 111 million in Education resources. The justification is that most of this item depended on the generation of revenues from the National Fund for Education Development (FNDE), which is being frustrated. The government also plans to cut budgetary resources from areas such as Health, Cities and National Integration.