Brazil Creating Export Credit Agency, the Brazilian Eximbank

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Eximbank Brazil's Ministry of Development, Industry and Foreign Trade and the Brazilian Development Bank (BNDES) are articulating the creation of a credit agency for exports, the Brazilian Eximbank.

According to the president at the BNDES, Luciano Coutinho, the bank should finance exports, but the creation of a subsidiary or a new institution within the Brazilian financial system would offer more complete services in this area.

"An export credit agency, which almost all nations have, provides a series of other services and modalities. For example, guarantees, offer of insurance and financing of exports under certain conditions," explained Coutinho.

To him, the financing of exports, when combined with other factors, "is more powerful." The establishment of the Eximbank had already been announced by the minister of Development, Industry and Foreign Trade, Miguel Jorge, according to whom president Luiz Inácio Lula da Silva approved the idea.

Coutinho did not, however, forecast when the credit agency will come off the paper. "I prefer to work first and announce later. We are still at a process of modeling this idea."

Luciano Coutinho pointed out that legislative modifications will be necessary for the BNDES to promote this kind of operation, in case the Eximbank is established as one of its subsidiaries.

The BNDES president participated in a public audience, May 27, at the Commission of Economic Affairs of the Senate (CAE), to discuss the economic crisis. To him, the country "resisted brilliantly to the stress test" imposed by the global economic conjecture in recent months.

With regard to the Brazilian market, Coutinho estimates that the country may return to growth of 4% in 2010. "What depends on the domestic market and on autonomous decisions will do very well. This provides support for the Brazilian economy to grow at least 4%, but it could grow 6% or 7%," he explained.

However, export companies that depend on the foreign market may still live a difficult period over the next two or three years, said Coutinho.

"All that depends on the global market, on global trade, which should take longer to recover. We must therefore be realistic and see that over the next two or three years the Brazilian growth will depend more on the domestic market and on what we are capable of investing," he concluded.

ABr

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