A Closer Look At The Evolution Of Brazil’s Overseas Investments

From the World Resources Institute web site:

http://insights.wri.org/news/2012/12/closer-look-evolution-brazils-overseas-investments

From 2001 to 2011, Brazil's per capita GDP more than tripled. Photo credit: Flickr/Rodrigo Soldon

Excerpt:

Brazil’s Economic Boom

The development finance landscape is changing rapidly. While this type of finance has historically flowed from developed to developing nations, over the last decade, major emerging economies such as China and Brazil have fueled a growing trend of South-South development flows, increasingly channeling their overseas investments to other developing nations. For example, BNDES dominates investment flows in Andean and Southern Cone countries. It’s also making significant strategic investments in other Latin American and sub-Saharan African nations.

WRI’s Emerging Actors Work

WRI’s research on Brazil’s outward foreign direct investment (OFDI) flows is part of our Emerging Actors in Development Finance work stream under the International Financial Flows and the Environment objective. WRI’s Emerging Actors team also engages in similar work in China.

As we note in the slide deck, BNDES has extended its international development finance role through a variety of initiatives. A few include: the—creation of an investment arm; an export-import branch; a subsidiary in London that helps with internationalization of Brazilian companies; and management of new financial instruments such as theAmazon Fund and Brazil’s Climate Fund.

These Investments Have Social and Environmental Implications

While spurring economic growth, BNDES faces multiple challenges in ensuring that its investments are environmentally sound and socially just. For example, BNDES makes significant investments in Latin American and sub-Saharan African nations, some of which may have weak governance systems to control the impacts of investments from overseas.

Adequately addressing these challenges requires a set of guidelines to ensure that investments are made in a socially just and environmentally beneficial manner. BNDES is increasingly interested in being recognized as a responsible global investor, already putting in place initiatives like its socio-environmental policies. But it’s important that BNDES—and Brazil as a country—achieve greater commitments and safeguards.