2023-06-02 04:19:37
Special Envoy to Shanghai and Beijing
On one of the upper floors of the New Development Bank building in Pudong, Shanghai, the voice of Dilma Rousseff: “I have to give you good news,” the head of the BRICS bank told the Minister of Economy, Sergio Massa, who had begun to articulate a talk. With an attentive ear, Máximo Kirchner also paid attention, who accompanied the minister at the rally. The novelty is that with the patronage of Brazil, the board of directors of the credit organization accepted that in August, in the meeting that will take place in South Africa, the incorporation of Argentina as a member of the bank will be discussed. At the same time, the incorporation of three other countries, including Zimbabwe, Saudi Arabia and Egypt, will also be discussed.
“It’s a very good result”, Massa told his own following leaving the meeting, which took place in the financial nerve center of China. The news was celebrated because Massa had been suffering internal and external shrapnel over Brazil’s alleged refusal to collaborate with Argentina in terms of financing. Although this incorporation, which is almost a fact, will not result in disbursements of money, for the minister it is an asset that he wants to show off: he leaves the economic labyrinth with a political move that allows him to no longer discuss whether or not they give him money, but rather carve in the elaboration of financing schemes.
One of the clashes that Massa had on the subject of Brazil was with the president himself, Alberto Fernández, who slipped through different media that Lula Da Silva did not have in mind going out to support Argentina. In light of the facts, it is worth clarifying, there were actions by Brazil that were particularly unusual in an interlocutor wanting to help. One of those gestures, the unfulfilled promise of the Brazilian Economy Minister, Fernando Haddad, to come to Argentina to close the financing agreement for Brazilian imports with funding from investment banks and the BNDES.
In this scenario, although Massa differs – and it was raised in the conversation with Dilma itself – that the BRICS is not Brazil’s policy, he does believe that the push of the neighboring country was essential to sponsor Argentina. Officials close to the minister told Page I12 that Massa did not know the news beforehand, and that he sent him a WhatsApp message to notify President Alberto Fernández, that he was on his way to Bolivia to inaugurate a gas pipeline.
Timing and technical aspects
The internal regulations of the BND require the member countries of the BRICS bank to make a capital contribution which, in this case, must be 25 percent of the total of 1 billion dollars each. In principle, Argentina will meet this goal with sovereign bonds that will come from the Anses Guarantee Fund, the Central Bank (BCRA) and the national Treasury. During the forty hour that the meeting lasted, Dilma also recalled that he had a Zoom meeting with Massa on May 25, and that he did the same with Cristina Kirchner, detailed information that the Brazilian told Máximo Kirchner.
The BRICS bank leader showed that she is willing to play hardball and expressed her support to Massa. It falls out of maturity, beyond temporary speculation, that Argentina and the three proposed countries will have their confirmation of entry into the entity at the summit in August.
The yuan and the IMF continue
This Friday, already arrived in Beijing, Massa will meet with the head of the Chinese Central Bank to close the expansion of liquid money available in the yuan swap agreed between the countries. The head of the BCRA, Miguel Pesce, will also be at that meeting. The idea is that the current 5,000 billion liquid dollars that there are today in the package of 18 billion total, be expanded by three billion. In this way, the minister would get 8000 billion freely available, while awaiting the resolution on the agreement with the Monetary Fund.
In parallel, in the environment of the Minister of Economy they are already preparing a trip to Washington that will be just following Massa’s arrival in Buenos Aires following his tour of China. The minister will go to sign the agreement with the organization, which has two premises on which the vice-minister Gabriel Rubinstein and the head of the Treasury Cabinet, Leonardo Madcur, have been working: it will follow the authorization to intervene in the exchange market and, in parallel, it will demand to take care of the expense but the action of public works will be enabled. What will be debated are the amounts adaptable for such purposes of the famous “front load”, the advance of more than 10 billion dollars that the organization led by Kistalina Georgieva will make.
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