After defaults in Mozambique, Venezuela, and Cuba the Brazilian government froze credit lines for new exports, a measure that will affect mostly small and medium-sized businesses. The Brazilian Treasury Department will spend US$ 6 million to reimburse BNDES (National Bank For Economic and Social Development) for Cuba's default
Following Venezuela and Mozambique, the Cuban government defaulted on its payments to BNDES, in a credit line insured by the Treasury in the case of nonpayment.
The amount is from an installment due in July, which Cuba paid partially. The Cubans paid US$ 4 million from the US$ 10 million that were due.
During the Lula and Rousseff administrations, the above mentioned countries hired large Brazilian contractors for infrastructure works.
One example is the modernization of the Mariel Port in Cuba, performed by Odebrecht. These countries also purchased buses, industrial goods and foodstuffs using the credit line.
When defaults happened, the Brazilian Treasury had to pick up the tab.
The Brazilian government will spend almost US$ 400 million to cover foreign countries' defaults in 2019, and that will cause a shortage of money for new credit lines for Brazilian companies.