State policies protect countries from advancing authoritarianism, say speakers at G20 event

Brazilian government agents and international authorities defended state presence in developing countries’ economies as a means of protecting democracy. Access to financing was also highlighted as a challenge.

Defending State presence in economic and social policies marked the opening of G20 side-event States of the Future. The former president of Chile and former United Nations High Commissioner for Human Rights, Michelle Bachelet, highlighted that State presence is especially important in a scenario in which authoritarian governments are gaining strength. 

The speakers also stressed the importance of developing countries having access to financing so as to ensure industrial reconfiguration. 

“Democracy is failing by not producing the expected results. There is a loss of trust in democratic institutions. The number of people who want an authoritarian government over a democratic government is increasing more and more,” said Bachelet, adding that the uprising of the far right is extremely worrying.

Among the solutions highlighted by Bachelet is the creation of an international financing system. “We need to work on more effective global financial architecture that can respond to current needs,” said the former president of Chile. 

In the same sense, the former president of Brasil and president of the New Development Bank Dilma Rousseff argued that the challenge of financing is at the crux of the response to current challenges such as the climate and sustainable development crises. 

“Global financing conditions, as well as reduced, are prohibitive due to the high interest and exchange rate risks in central economies,” said Rousseff. 

In the opinion of the ex-president, the burden of public debt in developing countries hinders growth. Over the past decade, interest payments in these nations have increased more rapidly than public spending on health, education, and investment.

The president of the New Development Bank advocated that all countries have their own development banks working in partnership with national and multilateral development banks. 

In Brasil, the National Bank for Economic and Social Development [Banco Nacional de Desenvolvimento Econômico e Social/BNDES] has been working to reduce the cost of debt. According to BNDES president Aloizio Mercadante, the State must define policies to face the climate emergency and rebuild economies. To this end, he defended the reduction of the trade dispute among countries. 

“We also need new instruments. We have the Amazon Fund, which is crucial. We broke a disbursement record this year. Today I am going to close new partnerships for the Amazon Fund,” highlighted Mercadante. “We need to do more, and faster. There is a global resource deficit to face the climate calamity, ranging from USD 4 trillion to USD 7 trillion,” he added.

Mercadante also stated that 73% of industrial policy measures over the period of international trade reconfiguration came from China, the United States, and the European Union, accounting for two-thirds of the sector worldwide. “The measures are increasing trade protectionism, subsidies, government procurement policy, and all kinds of barriers,” he said. 

Government policy

To the Minister of Management and Innovation in Public Services, Esther Dweck, “the State is fashionable again.” “We know that it never really left the scene, much less in countries that most favored the agenda of weakening it. The fact, however, is that the parameters of the debate about its role have changed when compared to the turn of the last century,” said the minister. 

Like Bachelet, Dweck believes that, in certain sectors, the anti-State rhetoric still thrives — and it is often connected to attacks on democracy. The retraction of policies explains part of the current crises in the economic, political, environmental, health, and geopolitical spheres. 

“We have two important challenges ahead. The first is to dispute the direction of this debate, so that it results in real strengthening of state capabilities, mainly in developing countries, and so that it is sustained over time, transcending the responses to the crisis at this moment,” stated the minister. 

The second challenge “is to reimagine the design of state capabilities necessary to facing new contemporary and emerging challenges,” she added. 

Minister of Racial Equality Anielle Franco added that the State of the near future must be, above all, inclusive.  “No one should be going hungry anymore, and skin color should not be a determining factor in deciding whether a person will live or not, whether they will have decent housing, access to education, environmental and climate security or not,” said Franco. 

States of The Future is carried out by the ministries of Management and Innovation in Public Services [Ministério da Gestão e da Inovação em Serviços Públicos/MGI]; Foreign Affairs [Ministério das Relações Exteriores/MRE]; Development, Industry, Trade,  and Services [Ministério de Desenvolvimento, Indústria, Comércio e Serviços/MDIC]; by BNDES; and by the United Nations Development Program (UNDP). The organization is run by Maranta and the Organization of Ibero-American States for Education, Science and Culture (OEI) in Brasil. The Open Society Foundations and República.org support States of the Future.

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