It's important to say that the fund went bankrupt. Or that it will go bankrupt if nothing is done to rescue it. And this is not just any fund, but the National Science and Technology Development Fund (FNDCT), perhaps the main source of financing for S&T in a country that is rapidly moving away from scientific and technological frontiers and that has structural problems that impede its development – including low productivity – which cannot be resolved without innovation. Created in 1969, the FNDCT had – and still has – ambitious and relevant objectives: financing strategic scientific and technological development projects, strengthening the national industry and the country's research capacity in important areas, from nuclear energy to life sciences.
In the 70s, backed by a loan from the Inter-American Development Bank, the FNDCT was responsible for the “golden years” of scientific and technological development in the country, largely associated with the substantive activism of Finep, the expansion of postgraduate programs led by Capes, the creation of important research institutions, such as Embrapa and CPqD, and the launch of strategic projects in the areas of energy, transport and telecommunications, which required national scientific and technological training. Suffered in us 80s with uncontrolled inflation, but benefited from democratization, with the creation of the Ministry of Science and Technology (MCT) and the prestige of scientists who had distinguished themselves in the fight against the dictatorship and began to occupy important positions in the so-called New Republic. It staggered through the Collor Plan, but was almost knocked out by the rigorous fiscal adjustment in the first years of the Real Plan. It was saved before the last gong sounded with the creation of S&T sector funds in the period 1988-2002, which should – it was thought at the time – provide the FNDCT with growing and relatively stable resources to face the challenges posed by the need to promote O catch up technology and monitor scientific development in the context of globalization.
The analysis of the FNDCT's recent performance confirms both its importance and insufficiency for financing CT&I, and reveals several problems that led it to the pre-bankruptcy situation it finds itself in today.
On the one hand, the optimistic expectations created around sectoral funds did not materialize. Although fund collection has grown at an accelerated pace, as projections indicated, the resources, which should have had special treatment as they were contributions for specific purposes, were placed in the common basket of taxes in general and as such have always been heavily contingent upon the National treasure. In fact, between 2001 and 2016 the FNDCT budget was around R$37 billion (in current values), but only 46% was actually paid off. This means that 54% of the resources collected to finance the National ST&I System – SNI were diverted to other purposes, representing a significant loss for a country that needs to inject innovation into its veins to develop (Buainain, Corder and Bonacelli, 2017).
On the other hand, the sectoral funds were designed to provide additional resources to the SNI, but ended up replacing, in part, the Treasury's current resources. To give you an idea, in 1995 the General Budget of the Union (OGU) allocated 3,23% of total resources to the then MCT; in 2000 it was only 2,4%, of which less than 1% corresponded to the collection of Sector Funds deposited in the FNDCT. But in 2003, with most of the funds in operation, the FNDCT's share of the resources allocated by the OGU to the MCT rose to 90%, which confirms that the funds' resources only replaced those that the OGU already allocated to the MCT. Since then, FNDCT's participation in the budget allocated to MCTI has always been greater than 60%, having reached a peak of 93% in 2011, when the ministry received only 2,5% of the total from the OGU.
Even so, in a staggering way, the FNDCT remained a strategic source of financing for the SNI until 2016, when it received an almost mortal blow: CT-Petro, responsible for almost 50% of the resources, was transferred to the Fund. Social. This loss placed the FNDCT in a situation of potential default, something that had not been experienced since 1999, with insufficient revenue to maintain the commitments previously assumed by Finep and CNPq with the country's scientific and technological community. The 2016 deficit was partially covered with additional resources to those collected, which were not maintained in 2017.
But the death blow is in the proposed Budgetary Law for 2018, which allocates a measly R$700 million to the FNDCT, less than Finep estimates that the Fund itself will raise only through the payment of interest by companies that in the past financed their innovation projects. with resources from the FNDCT. In other words, the government not only diverts the use of collected resources for other purposes, but also retains part of the revenue generated by the fund itself with the well-executed investments it made in the past. The message for public managers is clear and inconsistent with the discourse of austerity and efficiency in the public sector: spend poorly, but spend quickly, because there is no prize for spending well and generating additional resources for use in the future.
Today, large national projects in the area of Science and Technology are at risk. Several renowned research institutes do not have the budget to reach the end of the year and many of the efforts undertaken by the government itself and the scientific community, which consumed hundreds of millions of reais in a legitimate and beneficial way for the country, are at risk of being destroyed. lose due to the myopia that seems to dominate the country's fiscal management and the insensitivity of the National Congress that prefers to allocate billions to electoral campaigns.
It's important to say that the moment is opportune to rethink the SNI financing scheme itself. The FNDCT and sectoral funds, in their current format, are exhausted. They are not financial funds as such, as they depend entirely on current transfers from the Union, without any clear link to the revenue collected. Resources are neither stable nor predictable, as they are always subordinated to the immediate dictates of fiscal policy. Sectoral funds have lost any meaning as an instrument to support specific sectors, and in the current context, sectoral segmentation and fragmentation of resources are no longer meaningful and do not have decisive impacts on the country's development. The FNDCT and FS are subject to unstable governance, with guidelines that change or may change with each new minister on duty; there is no effective incentive to improve and innovate in the allocation of resources, monitored by the Court of Auditors whose rules and control mechanisms do not seem effective in avoiding deviations from the proportions that have been evidenced by the actions of the MP and PF, but which are very effective in complicating matters and even make many policies to promote S&T and innovation impossible. At the same time that it is necessary to save the FNDCT from immediate bankruptcy, reviewing the budget proposal, it is necessary to radically reform it to rescue it from the mediocrity and ineffectiveness that mark many Brazilian public policies.
(*) Buainain, AM, Corder, S., Bonavelli, MB (2017). State capabilities and limits of financing innovation in Brazil. Rio de Janeiro, INCT/PPED, (in press).
