One of the characteristics that BRIC´s seem to have in common is National Development Plans under different labels. The China Economic Reform Implementation Project aims to assist the Government to implement its reform and development agenda by significantly increasing the adoption and use of sound reform and development strategies, policies and implementation plans through a series of technical assistance subprojects tailored to address specific challenges through institutional capacity building at the national and sub-national levels. The project was expected to have 50-100 sub-projects over the whole implementation period of five years. The first set of sub-projects are grouped around five primary themes: reforming civil services and public finance; improving service delivery and social protection, improving management of land and natural resources; building public and market institutions, and improving regional and sector development strategy. Other selected areas sub-projects address inequality and social exclusion, financing sustained and efficient growth, and integrating China into the world economy. On a regional level, the World Bank has been particularly active in Chongqing, a booming 32 million people megalopolis at the confluence of two major rivers in southwest China. Ninety per cent of the river water in Chongqing city is now safe for drinking after treatment. China appears to be a model of simultaneously integrated planning and execution on all the main fronts. Clearly, there are at least two types of project involved. Those bringing a long-term intangible payback such as improvements in social infrastructure and production enhancement projects which give an immediate tangible payback such as hydroelectric dams. Mitterand type “Grand Geste” projects are not common although the Bird`s Nest Olympic stadium whiffs of this.

Brazil has worked with National Development since the days of the military government when the technocrats provided the methodology but few have had enough follow through. In the 1970´s, Brazil funded most of its projects with public money backed up by multilateral agencies and private foreign bank project financing but the tendency of the government to put money into the public pay roll hampered its ability to fund the investments needed for infrastructure. The many state-owned companies, such as Eletrobras and other `bras´s were particularly active, however. Then, there were some "Grand Geste" type projects that really went wrong such as the Angra nuclear power plant. In recent years the PPP (Public Private Partnerships) has emerged at all levels of government and most recently, in 2007 the PAC (Growth Acceleration Program) was launched. The effect was instantaneous as the markets envisaged Brazil becoming a huge construction site. Housing and basic sanitation are the latest focus and when this was recently announced shares in construction companies jumped despite the depressed state of the real estate market. The problem is that the PAC has become a political platform especially since historically the inauguration of completed projects coincides with election campaigns. In fact, the PAC has become almost surrealistic because of the contrast of the announced success with the reported level of actual progress. It is reported that of 11.000 projects, only 3% have actually been completed since 2007. The richest state, São Paulo, has only completed 39 out of 1050 and 725 are still in blue print stage including some "Grand Geste" ones that have been talked about for many years such as the TGV between São Paulo and Rio de Janeiro. As may be expected, the North/North-East has the lowest number of completed projects. Private sector partners complain that they are obliged to put up massive financial and performance guarantees and even reflect project liabilities on their balance sheets that prevent them from obtaining finance for other projects. From the psychological viewpoint, the closer the government is to the end of its term, the riskier new PPP´s become since the incoming government may have different priorities and end up shelving them. 

In other words, China and Brazil seem to be at opposite ends of the implementation spectrum and the causes are very enlightening. Firstly, the autocratic Chinese government contrasts with the relatively new democracy of Brazil. China can forge ahead regardless of what people think. It has even been known to remove entire populations from their hometown to another for the sake of a project. Brazil is obliged to face extensive delays while it gets permission from its environmental board for the construction of new hydroelectric dams. At this very moment, one of the most important hydroelectric projects in the country is under threat because the fiercely independent head of the environmental agency has said publicly that it will not approve the project and, like Margaret Thatcher once famously said of herself, he is known to be “Not for turning”. Under the military regime of the 1970´s, Brazil was also able to push through any measure required for implementation of a project it considered important, so the country has already been down that road. As already mentioned in an earlier article, in the early 1970´s a highly respected planning minister declared that environmental considerations would never interfere with Brazil’s economic development. This seems to be the case in China, albeit not as explicitly. 

Secondly, Brazil has first-hand experience with the consequences of overspending by state and local governments, which resulted in a Fiscal Responsibility law holding elected officials personally responsible for excesses over budgets. This was one of the main reasons for the emergence of PPPs. Unfortunately, the various levels of government have not yet learnt how to deal with the private sector and place too many financial and other demands on it. Many promising projects end up with an unattractive projected internal rate of return because of tariff and other restrictions. China seems to have unlimited resources for projects, very little debt and does not need the private sector, which is negligible except for foreign investors who have to accept wide-ranging restrictions. China has never known the debt crisis faced by Latin America in the 1980`s. China´s deep pockets allowed them to activate 50,000 workers to finish the Bird’s Nest in time for the Olympics. Contrast this with the many Brazilian projects that simply pause for a period until new money can be found to complete them. 

Thirdly, it is common knowledge that in Brazil many officials take backhanders with impunity. This inflates the costs of the project thereby reducing the total amount of funding available for development. In China, similar cases result in severe retribution by the authorities thereby making officials think twice before dipping into public money. 

Fourthly, China has shown skill in obtaining and using money from the World Bank and other agencies. China not only borrows development funds but also implements World Bank advice very closely. Brazil has obtained large amounts of support from the World Bank and the InterAmerican Development Bank, of which it is the largest borrower, but the World Bank and others require a financial counterpart from the sponsor for each project. Obviously, no lender is going to fund 100% of any project to a BRIC but Brazil has had problems in coming up with its share of the funding for budgetary reasons in the case of the federal government and financial reason in the case of states and municipalities. There is a large amount of undrawn multilateral loan commitments, which may expire, unused because of lack of counterpart funding, especially in poorer Northeastern state sponsored projects. 

Fifthly, there is the question of whether or not PPP´s or even privatizations are really the solution to PAC implementation and if the DNA of officials from the public sector can avoid the “bully on the block” behavior, which prevents it from interacting with the private sector partner, which has a need for financial returns. China does not have this problem because public money is bankrolling the entire development effort. In fact, Brazil is now trying to persuade China to use its funding and implementation expertise in Brazilian projects and in a recent visit to China the Brazilian government expressed disappointment over the low priority China seems to be giving to Brazilian trade and investment, having shortened the visit to China to just two instead the expected five days.

Conclusion

Perhaps Brazil no longer has the same overwhelming motivation as China for project implementation. The Brazilian working classes have seen a substantial increase in their real wage, especially where every family member is working, so they are light years ahead of China’s per capita GDP. This is not to say that Brazil is in a comfort zone. Furthermore, the Chinese government has an unspoken social pact with the population that in exchange for unquestioningly accepting an autocracy, the government will provide development and advances in personal prosperity. Even at the height of the Brazilian military regime, the government never raised any immediate expectations except for the hope that the next generation may benefit from the development plans.