Lula sacks controversial BNDES president

Brazil's President Luiz Inácio Lula da Silva has fired Carlos Lessa, the controversial head of the country's powerful national development bank BNDES, after his recent critique of the central bank's monetary policy, the federal government news agency reported. Lessa became BNDES president in January 2003 and had been at odds for some time with the country's more free market-friendly central bank chief Henrique Meirelles who held a top job at US banking giant FleetBoston before being appointed central bank president by Lula. Lessa had always been a strong supporter of state-led industrial policy and he was keen to use BNDES in a more aggressive way to foster economic development in Brazil. Last week that rivalry reached its climax when Lessa criticized Meirelles in very strong language for his tight monetary policy when interviewed by Brazilian daily Folha de S. Paulo. Brazilian news service Agencia Estado quoted government sources as saying planning minister Guido Mantega would replace Lessa at BNDES. In related news, BNDES came out this week with record loan figures for the first 10 months, with disbursements jumping 45% to 31.8bn reais (US$11.5bn) on the year-ago period. Those figures also include so-called extraordinary resources from the national treasury channeled through BNDES. BNDES is Latin America's largest development bank and plays a crucial role as provider of long-term financing for companies and projects in Brazil.