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Dilma Rousseff at NDB's helm: Inside her resurgence as the head of the BRICS Bank

Examining the role Brazil's first female president will play on a global scale

Dilma Rousseff Dilma Rousseff | Reuters

George S. Patton used to say that success is how you bounce when you hit bottom. Brazilian president Luiz Inácio Lula da Silva sees Brazil bouncing back from the last four years at the international bottom under his predecessor Jair Bolsonaro. 

On the international stage, his selection of former president Dilma Rousseff to head the Shanghai-based BRICS New Development Bank is a bold step toward taking an important role within the bloc after its virtual abandonment by Bolsonaro. 

The selection is a remarkable bounce for Rousseff, who left office impeached in 2016. When she tried to run for the senate from her home state of Minas Gerais, she was defeated, receiving a humbling 15% of the vote. Now, her appointment means she rises to a high-profile international position of global relevance as head of an institution that champions the growing economic influence of the BRICS countries and aims to produce a significant change in the global financial landscape, carving into US and European dominance and building an alternative to American hegemony.

Under Lula’s vision of the bloc, the country’s membership is the participation of all Latin America in BRICS, positioning Brazil as a regional economic and influential power. This is strategically advantageous for the entire region as it provides a gateway to strategic partnerships and access to the "One Belt, One Road" (OBOR) initiative — The New Silk Road.

OBOR is a key part of China's vision for a new paradigm of a closely interconnected and interdependent global economy that is already reengineering Eurasia as a direct link between China and Europe and seeks to connect the rest of Asia, Europe, and Africa. 

The 75-year-old Rousseff will take on a new role focusing on boosting economic cooperation among developing markets from the BRICS institution that bills itself as "The Premier Bank for Emerging Economies."

The reinvigorated mission injects Brazil as a player in the global geopolitical reshuffling of its markets and financial structure and a potentially weighty role in incorporating developing countries into participatory global financial governance. At the same time, the move would strengthen ties with China, an important trade partner to Brazil and BRICS.

That is because Rousseff is an economist who, as the president of Brazil, made it her job to know and understand the intricacies of Chinese politics, making several trips to China and developing a relationship that recognised it as a key strategic partner for Brazil’s economic development. She signed several agreements with Xi Jinping that led to increased Chinese investment and bilateral trade.

In announcing the selection, Lula’s government requested that the current head of the NDB Marcos Troyjo, a Bolsonaro-appointed diplomat, economist, international economics and trade researcher, resign his position that has a mandate until 2025, indicating he may be following Bolsonarist ideas and that he has not been seen Shanghai in months. Indeed, Troyjo is currently in Brazil.

Snickering comments from the right began immediately to deride the decision and the prospect of a former president impeached for "fiscal irresponsibility" being named as head of the BRICS bank and questioning her qualifications.

But, beyond the ridicule she suffered after her impeachment, some consider her a serious and competent person. Her impeachment has been criticised by some as being politically motivated rather than based on genuine legal grounds; they argue that the charges against her, which centred on the use of government loans to cover budget shortfalls, were common practice by all other presidents and not serious enough to warrant impeachment. Exhibit 1: No other president was impeached for them.

The reaction may be just political wrangling, however. As president of NDB, Rousseff would not be acting as a banker but rather in a more political role, developing and maintaining partnerships between member countries and ensuring that the bank’s mission and goals are met, developing and implementing strategies to achieve the BRIC goals, which require presenting her case to various international forums and events. 

She does not have Lula’s considerable political skills, says historian Jose Theodoro Mascarenhas Menck. But it cannot be denied she is an experienced politician.

Born in 1947 to a middle-class family in Belo Horizonte, the capital of Minas Gerais state, Dilma, as many refer to her even today, became interested in politics early on. In the 1960s and 1970s, she became involved in left-wing political activism during Brazil’s brutal military dictatorship. She was a guerilla fighter challenging the right-wing hold on power; she was arrested and imprisoned for several years.

After her release she became involved in the Worker’s Party, Partido dos Trabalhadores (PT), which was founded in 1980 by a group of labour unions, left-wing intellectuals, and Christian activists that included Lula, the current president.

Growing in the ranks, in the 1990s, she was appointed as the Chief of Staff for the state government of Rio Grande do Sul. There she was charged with implementing social and economic reforms. In 2003, she became Brazil’s Minister of Energy in Lula's first administration. She is credited with playing a key role in implementing new energy policies, modernising Brazil’s energy sector, diversifying the country’s energy mix and expanding access to electricity. 

From 2005 to 2010, she served as the Chief of Staff of the Presidency of Brazil, a time in which she is credited with successfully implementing several major social programs for reducing poverty and inequality.

In 2010, she ran for president of Brazil with Lula’s support as his handpicked candidate. She won the election, becoming the country's first female president in 36 governments. 

During her presidency, which lasted from 2011 to 2016, she worked on the country's economic and social challenges and implemented reforms in areas such as education, health, and infrastructure, for which she obtained general support.

Despite economic challenges and tumultuous political wrangling during her presidency, Rousseff was seen as a competent and effective leader. She was re-elected in 2014, but her second term was cut short when she was impeached in 2016 on charges of violating budget laws. Nicknamed A Guerreira, “The Warrior”, because of her guerilla past, strong advocacy for her beliefs and feistiness during her impeachment, She was removed from office in August 2016.

During her presidency, the cooperation between the five major developing economies ramped up and she hosted the 2014 Fortaleza Summit in which the New Development Bank was established to create an alternative to the World Bank, the International Monetary Fund and Bretton Woods institutions that perpetuate the use of the dollar as a global settlement currency, and promoting infrastructure development, providing financial support to member countries. The NDB's headquarters are in Shanghai, with regional branches in Sao Paulo, Moscow, New Delhi, and Johannesburg.

In 2015, she was instrumental in the establishment of the BRICS Contingent Reserve Arrangement (CRA) as a financial safety net for the member nations, allowing them to support one another in times of economic difficulty.

As president, Rousseff began cooperation between Brazil and China in areas such as science and technology, agriculture, and energy.

Yet Rousseff’s fluent relationship with China is crucial at the NDB because China is by far the biggest kid of the bloc. With a $17.7 trillion GDP, its economy dwarfs all others whose GDPs total $7 trillion together.

Serving a population of 3 billion, BRICS’ accumulated GDP is roughly $10.5 trillion less than the powerful G7, which serves less than one billion people, including the EU.

Brazil, with a population of 220 million, is by far the largest economy in Latin America as measured by GDP, followed by Mexico. The picture changes when looking at per-capita GDP, with Chile, Argentina and Uruguay ahead of Brazil and Mexico immediately behind. 

This highlights both the opportunities and challenges Rousseff will face in integrating the subcontinent into closer cooperation with BRICS and among each other. 

Financing transportation and energy infrastructure projects with a sustainable future, NDB has established relationships with the Asian Infrastructure Investment Bank, AIIB; the Corporación Andina de Fomento (Andean Development Corporation) CAF; the European Bank for Reconstruction and Development, ERBD, the Eurasian Development Bank, EDB; the European Investment Bank, EDB, the International Investment Bank, IIB; and the World Bank Group WBG, among others.

Brazil and Argentina began this month with the creation of a common currency, presently only in the form of an accounting mechanism to facilitate cross-border financing of exports between the two countries. The aim, however, is to grow it to encompass all of South America and eventually form a physical currency used everywhere. Integrating it into the NDB system could be one of Rousseff’s challenges ahead as the use of the Yuan to supplant the dollar has not taken hold widely.

On a global scale, NDB has admitted Bangladesh and the United Arab Emirates and is considered as candidates in Egypt and Uruguay.

India is the second largest BRICS economy with a GDP of $3.2 trillion and a per capita. As one of the fastest-growing economies, it can benefit from NDB's new and alternative sources of financing for its development projects.

Collectively BRICS economies make up a significant portion of the global economy, accounting for over 25% of the world's GDP and a substantial portion of the world's population. The vision of a new multipolar world order with more participatory governance to address global challenges like global warming, hunger, poverty and conflicts may be in the hands of "The Warrior" former Brazilian president. In mid-March, when Lula travels to Beijing, Rousseff will be accompanying him.


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