Key Points:

  • In March 2012, the Centre for Development and Enterprise (CDE) hosted Professor Armando Castelar Pinheiro, a Brazilian economist and former head of the economic department at BNDES, Brazil’s large, state-owned development bank.
  • In a seminar in Pretoria with senior government officials, Professor Castelar Pinheiro explained that BNDES has increasingly taken on the role of a large bank, financing large companies at cheap interest rates.
  • This has created fewer opportunities for private banks to develop and has entrenched a massive subsidy, generated from tax payers’ contributions, which is channelled towards large corporations.
  • This subsidised credit has, furthermore, not succeeded in raising the Brazilian investment rate.
  • The ANC discussion document on economic transformation – released on 5 March 2012 – declares ‘as a matter of urgency, the state should regulate a substantial part of retirement and life assurance funds (public and private) in order for these funds to be invested in State Owned Enterprises and Development Finance Institutions, as well as additional investment programmes.
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