MercoPress. South Atlantic News Agency

Head of Brazil's powerful Development bank resigns following clash with Bolsonaro

Joaquim Levy (left), a University of Chicago-educated economist and former finance minister said he has sent a note of resignation to Economy Minister Paulo Guedes.

The head of Brazilian state development bank BNDES has submitted a letter of resignation amid public tensions with president Jair Bolsonaro, reflecting the serious divisions that continue to plague the administration’s upper echelons.

In a statement Joaquim Levy, a University of Chicago-educated economist and former finance minister who was appointed by Bolsonaro shortly after he began his term in January, said he has sent a note of resignation to Economy Minister Paulo Guedes.

“I am grateful for ... the loyalty, dedication and determination of BNDES executives. And I am especially thankful for the countless BNDES workers that have worked with energy and serious to transform the bank,” the note read.

BNDES has historically been a significant source of financing for major infrastructure projects in Brazil, and the head of the bank is a high-profile position in a country where public companies still play a major role in a variety of industries.

The relationship between Levy and Bolsonaro had been strained for months over a variety of factors, including the slow pace of asset divestitures by the bank.

Recently, Levy locked horns with other parts of Bolsonaro’s administration over the nation’s so-called Amazon Fund.

Bolsonaro’s government had previously said it would seek to change the management structure of the US$ 1.28 billion fund that was set up a decade ago to counter deforestation in the Amazon and counts on the support of Germany and Norway.

Environment Minister Ricardo Salles, a climate change skeptic, last month criticized the fund’s management with allegations of irregularities in unspecified awards to non-governmental organizations and suspended all operations pending review.

But in June, Levy told reporters that the governance of the fund was transparent and the processing of new awards had not been halted.

On Saturday, Bolsonaro publicly threatened to fire Levy after the appointment of an official with historical ties to the opposition Workers Party - Bolsonaro’s ideological foe - to a position in the bank’s capital markets division.

The incident triggered the resignation but it was not immediately clear who would take Levy’s place.