Sustainable development and development banks in the Brazilian Amazon

Abstract

The thesis examines the processes of development in the Brazilian Amazon, particularly the role of development banks (DBs) in those processes. It carries out that task by analyzing the performance of two multilateral development banks (MDBs), namely the World Bank Group and the Inter-American Development Bank, as well as two Brazil’s development banks, the National Development Bank (BNDES) and the Bank of Amazon (BASA). The aim of this study is to analyze the DBs’ actions and policies, particularly in the field of sustainable development, in the last three decades (1981-2010), and to draw out what the DBs (and we) can learn from the weaknesses and adverse consequences of those actions and policies for the region. The role of DBs in promoting sustainable development in the region is of considerable importance to all of humanity, in a world facing significant loss of biodiversity and climate change. Nevertheless, based on historical and theoretical analysis, as well as empirical studies such as field research and interviews, the thesis argues that many parts of the Brazilian Amazon have followed a “boom-bust” cycle, underpinned by a predatory model of “development” that has caused environmental degradation, social exclusion and violence in those areas. The central argument is that the DBs see environmental impacts as “a factor to be considered” in their operations in the Brazilian Amazon, but they have not adopted sustainable development as their overarching objective for the region. The thesis also sets forth two subsidiary arguments. The first argument is that the DBs in the Brazilian Amazon have tended to act in the interests of their shareholders rather than responding to the needs of recipients (local people). The second argument - closely linked to the previous one - is that the sustainable development strategies and projects should be formulated by the borrowers, not the lenders. The thesis examines the measures needed to achieve the overriding policy goal. The study recommends the adoption of new mechanisms for promoting sustainable development in the region, highlighting the crucial role of DBs in those mechanisms. It concludes that these mechanisms require new multi-actor arrangements, namely “hybrid-institutions” that comprise international bodies, state, local community and private sector.