Brazil has developed a strategy of investments for infrastructure

The Minister of Economy, Joaquim Levy, said Brazil has built a strategy to attract infrastructure investments and that the National Bank of Social and Economic Development (BNDES) will work together with the capital markets in order to improve the form of private contributions in the country.
According to him, the country has clear rules for the performance of investments and a 20-year experience of work with regulation agencies, which assures smaller costs for the private sector. “I think that, in Brazil, the efforts for the construction of infrastructure is part of the regulation agencies”, said the minister during a debate in the George Washington University on the investments in the sector.

He admitted that many issues are solved in the Judiciary Power, but stressed that it is always possible to improve the work of regulation agencies and that they represent much smaller costs to investors.

Levy highlighted that, in Brazil, agencies do not formulate policies, but just take care of their execution. That assures, according to him, a greater “autonomy for solving issues”.

Then, the minister talked about BNDES’s role. “We have a great development bank that will now work together with the capital market”, he said, referring to the infrastructure investments projects. Levy explained that, in case a project is delayed for a period of, two years, for example, the bank is able to provide the guarantees that it is possible to continue the payments necessary for the maintenance of the works within this period of time.
The event joined by the minister is part of a spring meeting of the International Monetary Fund (FMI) and World Bank.

The minister also noticed that an important step in order to increase investments in infrastructure is to separate the areas of social infrastructure, where there are no returns to the market, from the segments where the provision of public services have a compensation for the private sector.

According to him, areas such popular habitation and, in some cases, low-income areas sanitation are segments afforded in Brazil through public resources. “But there are many things in a big economy such as Brazil, when it comes to population and natural resources, where the private sector can be joined and can be compensated”, he said.

According to him, that is the experience of the country, especially in the last twenty years or further. Levy also highlighted the impact of social investments on the whole society. “What is the return of investments in habitation? You are able to change people’s lives; people who used to live in a house without structure and that now live in a good apartment. You have schools. The impact in society is surely huge”, he said.

Levy also highlighted the importance of creating partnerships with states for the most important investments. In a country as great as Brazil, this sort of dialogue is relevant, he observed.

“It is necessary to hear the States. What will structure the economy of the States? What will change their economy? Sometimes a railway, a port, sometimes only a connection between the airport and an industrial area”, said Levy during the lecture on infrastructure investments in Washington. “Speaking to the states, you’re able to grant their support. That’s what we’re trying to do in Brazil. There is a new cycle of investments. Some projects are already there, but you need to reaffirm which is the priority”.