Archive for October 16th, 2009

Brazil’s Bndes loan to Venezuela: Too much ado about nothing

October 16, 2009

empty promises

A few months ago I got all worked up about the terms of a loan negotiated between the Chavez Government and Lula’s Government. Essentially, Brazil’s development bank Bndes was going to lend Hugo US$ 4.3 billion, which was going to be guaranteed by oil fields and was going to be  used mostly to pay back projects by Brazilian companies in Venezuela which were owed a lot of money.

I found the whole thing offensive, because the microphone was left on and Chavez told Lula that Brazilian companies would not be nationalized (In contrast with Argentinian ones, for example). Even worse the guarantee was in the form of oil fields, precisely where Chavez has been more vocal about supposedly protecting Venezuela’s sovereignty.

But I forgot that this is a Government incapable of completing or delivering on a project. Thus, while Chavez did talk to Lula about this and in his own imaginary word he came out and announced the details of what had been discussed, this has ended up like most Chavez projects of the last eleven years:

Nothing has happened…

You see, Brazil’s Bndes is a professionally run private Government company. It has a credit rating, has to generate revenue. Thus, if you want money, you have to justify it. And maybe they could lend Venezuela the US$ 4.3 billion, but someone on this side would have to ask for it and justify it. Lula may back it, but if Chavez and his Government don’t do the work, just forget it. Because in the end Bndes issues bonds to raise funds for its projects and it does it in international markets, fulfilling all requirements and insuring that that its credit rating is not affected.

But according to my sources, there was simply no follow up after Chavez’ visit. Bndes would have considered a request. More so, if the money was going to go to pay Venezuela’s debt with Brazilian companies and if arranging the loan would have had a nice guarantee like an oil field Petrobras could be interested in some day.

But after Chavez left, nobody ever came back with a proposal. Not even a letter. There was absolutely no follow up. It was like hundreds of Chavez’ projects just fluff, hot air. Like resigning if there were street kids in 2003 (There are more now!). Or his recent promise to kill himself if there were poor in Venezuela in 10 years. It was just another bombastic announcement. There was not follow through or consideration for follow through. It was just…Chavez being Chavez.

So, erase my rant from May 27th., it was just another unfulfilled promised by the revolution. It was just more hot air. More of the promises that Hugo lives for and never delivers.

It was much ado about nothing…

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