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An Investment Bank for Portuguese Speaking Countries Community

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Introduction: The Investment Bank for Portuguese Speaking Countries Community

João Lourenço, President of the Republic of Angola, presented in the inauguration speech of his mandate as acting president of the Speaking Countries Community (CPLP), at the XIII Conference of Heads of State and Government, held in Luanda in July 2021, the “challenge of start thinking about the pertinence and feasibility, even if remote, of creating a CPLP Investment Bank[1]”.

The President of the Portuguese Republic, Marcelo Rebelo de Sousa, in turn, admitted that the Angolan head of State’s proposal for the creation of an investment bank in the Community of Portuguese Language Countries (CPLP) could advance, if there were significant investments of several parties. And he added that this could become a reality if “significant investments from Brazil, from African economies emerging from the CPLP, from Portugal, but also with the contribution of European funds are combined[2]”.

Although the details of this idea are not known, only knowing that it corresponds to the implementation of an Economic Pillar of the Community of Portuguese Language Countries (CPLP), it is interesting to see how such a proposal could become a reality, which is more important, since doubts have arisen from reputable Angolan experts about its feasibility[3].

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Our conclusion is that it is possible to envisage the creation of an investment bank and development of CPLP with mixed capital and a reasonably independent and efficient structure, with diverse and plural sources of financing.

Vision, goals and strategic axes of the investment bank of lusophony

What we will call the Banco de Investimento de Fomento da Lusofonia (BIFEL) would be an investment and development bank that would materialize the CPLP Economic Pillar. The CPLP Economic Pillar, as understood from the several statements of the Angolan government, corresponds to a need to transform the collaboration potential of member countries into real wealth and would translate into the creation of common financing mechanisms and large free market areas and freedom of movement.

BIFEL would, therefore, be an instrument for financing the development of the PALOPS and the integration of the corresponding markets.

It would have three basic goals:

i) the financing of large works and infrastructures that bring the PALOPs closer together and make them more competitive in economic terms;

ii) the development of the corresponding economies and common access markets;

iii) the survey of the quality of life of the neediest populations (levelling up).

Thus, there would be a triple concern with economic integration, development and what is currently called levelling up regions and populations[4]. Economic and social aspects would have to be combined.

These goals would have to be operationalized in the creation of three major strategic axes that would, in practice, be transformed into three consigned credit lines.

• The first axis would be dedicated to infrastructure for common benefit: digital structures and networks, ports, airports, means of communication, roads, energies, especially renewable energies, etc.

• The second axis would be aimed at economic growth projects, the formerly called economic development. Here we would have factories, companies, and growth-promoting economic activities.

• Finally, a third axis dedicated to the aforementioned levelling up, with characteristics of economic and social development, would include support for building hospitals, schools, training human resources in education and health, environmental and climate protection.

BIFEL Share Capital

BIFEL would be a mixed financial institution, with share capital from several sources. One could point to an initial share capital of one billion, seven hundred and fifty thousand euros [1, 750 billion euros] (the reference point is that the development bank recreated in Portugal has 255 million euros as social capital and is fully public). In this case, the share capital would be much larger (1.75 billion euros) and the ownership not fully public.

A mixed ownership system for BIFEL is envisioned.

• First, 1000 million euros would be earmarked for the subscription of CPLP Member States: Angola, Cape Verde, Guinea-Bissau, Equatorial Guinea, Mozambique, Portugal, São Tomé and Príncipe and East Timor. Each State would participate in capital according to an equitable formula that considered its absolute GDP and GDP per capita, which allowed considering the real wealth of each one, its competitiveness and productivity, and the well-being of its populations.

• Afterwards, 500 million euros would be allocated to observer countries associated with the CPLP: Mauritius, Senegal, Georgia, Japan, Namibia, Turkey, Slovakia, Hungary, Czech Republic, Uruguay, Andorra, Argentina, Chile, France, Italy, Luxembourg, United Kingdom , Serbia as well as the European Union. Each of these countries and the European Union would make the proposals for capital subscription up to the amount it considered within the threshold of 500 million euros.

• A third group of share capital worth 250 million euros would be open to private investors from any country in the world.

Naturally, BIFEL would produce dividends from its borrowing activities in order to compensate its shareholders and would only finance projects in countries subscribing to share capital.

Organic structure of BIFEL

The bank’s structure would be based on three type bodies.

The direction would be ensured by a Board of Directors with a five-year term composed of 7 members, 4 appointed by the Member States, 2 by the Associate Observers and 1 by the Private Investors, the Chairman of the Board being appointed under the prerogative of the Member States, while acting as Vice -Presidents, there would be an element designated by the associated observers and another by the private investors.

The supervision would be incumbent upon a Supervisory Board composed of 5 members, 3 of which were chosen by the Courts of Auditors of the Member States on a rotating basis for three-year terms. Another member would be appointed by the Courts of Auditors of the associated observer countries in the same rotating scheme and finally the fifth member would belong to an international auditor of global reputation, resulting from the co-option of the remaining four members. Finally, there would be a General Assembly where each representative would act according to their share capital.

This structure would allow, on the one hand, the representation of States and shareholders, but would also BIFEL effectively independent corporate body with fiduciary duties and economic efficiency in relation to its shareholders and taxpayers of each State, given the diversity of its organic structure.

The head office would be established in CPLP’s most important financial market, according to the volume of business, with two operational sub-headquarters in the subsequent relevant financial centers.

Conclusion

This could be the outline of a financial  institution dedicated to the PALOPs, combining the advantages of public and private ownership at the same time, deriving from various sources of financing, allowing for a better integration of Portuguese-speaking markets, making each country grow and improve the living conditions of Portuguese-speaking populations, in the end, the ultimate goal of this initiative.

[1] https://www.jornaldeangola.ao/ao/noticias/angola-propoe-criacao-de-banco-de-investimento/

[2] https://www.jornaldenegocios.pt/economia/detalhe/banco-de-investimentos-da-cplp-pode-ter-virtualidades-diz-marcelo

[3] https://visao.sapo.pt/atualidade/mundo/2021-07-20-cplp-economista-angolano-diz-que-banco-de-investimentos-nao-tem-pernas-para-andar/

[4] About the concept as it is being developed in the UK, see: https://www.centreforcities.org/levelling-up/

Angola wants new direction for CPLP

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The Community of Portuguese Language Countries (CPLP), whose rotating presidency will be assumed by Angola until 2023, has so far been a mix of an imperial farewell, like its British counterpart Commonwealth, and a club of sympathies and photographic opportunities, not showing being a structure capable of leveraging the political or economic progress of its members.

The current intention of Angola and of the presidency that is starting now seems to be to change this apparent lethargy and to endow the CPLP with instruments, or at least concrete and practical goals, that promote the interest and prosperity of the countries that belong to it.

In this sense, there is a clear commitment to making the CPLP an economic organization that promotes economic and financial collaboration among its several members, possibly creating in the future an integrated market or at least a tax-free free trade area between members.

This strand (free trade area) will likely be added with some structuring funds that allow the richest CPLP countries to support development or create strategic partnerships with the poorest countries in the community. It must not be forgotten that within the CPLP there are oil powers such as Brazil, Angola, Equatorial Guinea and even Timor-Leste, there is a member of the European Union, such as Portugal, there is enormous potential population and natural resources. So, it is normal that economic integration and strategic financial cooperation between the CPLP countries are promoted and reinforced.

Thus, Angola will certainly bet on emphasizing the economic dimension of the CPLP, pointing out goals linked to a free market with reinforcement of economic cohesion and strategic partnership among its members.

A second point is linked to the free mobility of people. Once the Covid-19 crisis is overcome, it makes perfect sense beginning to deepen in practice a project for the free movement of people residing in the CPLP. Obviously, this project has to be combined with the free movement that already exists in Portugal in relation to the European Union, as well as greater economic integration, and also dispelling fears of intercontinental demographic pressures. However, it will be the most practical and tangible example that the CPLP is an organization with a future and that it says something to the population.

Do not doubt that at a time when peoples yearn for the improvement of living conditions, any organization only has a future if it embraces these aspirations, which are reflected in the goals we have stated:

 i) free market in CPLP,

ii) cooperation for economic cohesion and

iii) population mobility.

These will be the pillars that will allow the CPLP development beyond its post-imperial imagination and that seem to guide the Angolan policy for its CPLP presidency, as is clear from our reading of the notes released by Angola regarding the XIII Conference that Luanda will host under the motto “Building and Strengthening a Common and Sustainable Future”, having significantly scheduled for 15 July, a Round Table on Economic and Business Cooperation, in a hybrid format (face-to-face and virtual meeting).

Angola seems to bet on a CPLP that goes beyond post-imperial nostalgia and that stands as an engine of economic growth and improvement in the quality of life of populations belonging to the Community.

Angola quer novo rumo para a CPLP

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A Comunidade dos Países de Língua Portuguesa (CPLP), cuja presidência rotativa será assumida por Angola até 2023, tem sido até agora um misto de despedida imperial, tal como a sua congénere britânica Commonwealth, e de clube de simpatias a oportunidades fotográficas, não demonstrando ser uma estrutura capaz de alavancar o progresso político ou económico dos seus membros.

Ora, a intenção de Angola e da presidência que agora começa parece ser mudar essa aparente letargia e dotar a CPLP de instrumentos, ou pelo menos objetivos concretos e práticos, que promovam o interesse e prosperidade dos países que lhe pertencem.

Nesse sentido, há uma clara aposta em tornar a CPLP uma organização económica que promova a colaboração económica e financeira entre os seus vários membros, possivelmente, criando no futuro um mercado integrado ou pelo menos uma zona de comércio livre sem taxas entre os membros.

Essa vertente (zona de comércio livre) será provavelmente adicionada com alguns fundos estruturantes que permitam aos países mais ricos da CPLP apoiar o desenvolvimento ou criar parcerias estratégicas com os países mais pobres da comunidade. É preciso não esquecer que dentro da CPLP há potências petrolíferas como o Brasil, Angola, a Guiné Equatorial e mesmo Timor-Leste, há um membro da União Europeia, como Portugal, e há um potencial populacional e de recursos naturais enorme. Por isso, é normal que seja promovida e reforçada a vertente de integração económica e cooperação financeira estratégica entre os vários países da CPLP.

Assim, Angola apostará, certamente, na enfatização da vertente económica da CPLP, apontando objetivos ligados a um mercado livre com reforço da coesão económica e parceria estratégica entre os seus membros.

Um segundo ponto liga-se à livre mobilidade de pessoas. Ultrapassada a Covid- 19 tem todo o sentido começar a aprofundar na prática um projeto de livre circulação das pessoas residentes na CPLP. Obviamente que este projeto tem de ser compaginado com a livre circulação que já existe em Portugal em relação à União Europeia, aliás tal como a maior integração económica, e também afastar medos de pressões demográficas intercontinentais. No entanto, será o exemplo mais prático e palpável que a CPLP é uma organização com futuro e que diz algo às populações.

Não tenhamos dúvidas que um tempo em que os povos anseiam pela melhoria das condições de vida, qualquer organização só tem futuro se abraçar esses desideratos, que se traduzem nos objetivos que enunciámos:

 i) mercado livre na CPLP,

ii) cooperação para a coesão económica e

iii) mobilidade da população.

Serão estes os esteios que permitirão o desenvolvimento da CPLP para além da sua imaginação põs-imperial e que parecem nortear a política angolana para a sua presidência da CPLP, tal como resulta da leitura que fazemos das notas divulgadas  por Angola a propósito da XIII Conferência que Luanda vai albergar sob o lema “Construir e fortalecer um Futuro Comum e Sustentável”, tendo significativamente agendado para 15 de Julho, uma Mesa Redonda sobre a Cooperação Económica e Empresarial, em formato híbrido (presencial e virtual).

Angola parece apostar numa CPLP que ultrapasse o saudosismo pós-imperial e que se erga como motor de crescimento económico e melhoria da qualidade de vida das populações pertencentes à Comunidade.