performance is clearly bearing fruit: a broad-based
economic recovery is underway that should strengthen during
2004, employment is on the rise, exports have expanded at
double-digit rates, and vulnerabilities have been reduced.
This leaves Brazil well-positioned to benefit from the global
It was with great pleasure that I again visited Brazil. I had
a very productive meeting with President Luiz Inácio
Lula da Silva and I would like to extend my thanks to his Excellency
for his warm welcome. Another highlight of my trip was my visit
to communities in Minas Gerais that are benefiting from the
Zero Hunger program and the Milk for Life project, as well as
to the Jaíba irrigation project.
It has been a little
over a year since I last visited Brazil. The changes in this
short period of time are immense. The government has adhered
to prudent macroeconomic policies and tackled long-standing
structural problems by passing reforms of the pension and tax
system and making progress on a new bankruptcy law.
This strong performance
is clearly bearing fruit: a broad-based economic recovery is
underway that should strengthen during 2004, employment is on
the rise, exports have expanded at double-digit rates, and vulnerabilities
have been reduced. These developments leave Brazil well-positioned
to benefit from the global upturn.
My discussions with
the President, who was accompanied by Finance Minister Antonio
Palocci and Central Bank Governor Henrique Meirelles, focused
on the need to instill a framework for sustained medium term
growth and improved equity in Brazil and, more generally, in
the Latin American region. In this context, we discussed how
best the IMF and the other international institutions can contribute
to moving forward economic and social reforms toward this goal.
We agreed that consistently
building the social and physical infrastructure needs to be
given priority in such a framework, especially against a background
of falling and volatile infrastructure investment in many countries
in the region.
The IMF is working
to develop new statistical and policy guidelines that would
create more flexibility for increasing sound public investments
within an overall framework of fiscal and debt sustainability.
I hope to discuss
this issue further in the coming months with Minister Palocci
and other Ministers in the region after an initial discussion
with the Fund’s Executive Board. Of course, we will be coordinating
our efforts closely with our colleagues in the World Bank and
the Inter-American Development Bank (IDB).
I also listened carefully
to President Lula’s views on how the IMF can enhance its crisis-prevention
role in Latin America and other emerging market countries. I
assured President Lula that crisis-prevention lies at the heart
of the Fund’s agenda and that the Executive Board will soon
discuss possible modalities to increase further our role in
crisis-prevention and in helping countries cope with unexpected
During my visit,
I was anxious to see first-hand how the government is tackling
its mandate to improve living standards for the most vulnerable
citizens. My visit to Minas Gerais, in the company of Social
Affairs Minister Patrus Ananias, gave me an opportunity to see
how the authorities are putting their social commitment into
practice, and it has left a very deep impression on me.
The flagship Zero
Hunger program has generated interest throughout the world because
of its multidimensional approach that addresses the varied causes
and manifestations of hunger in both urban and rural communities.
Zero Hunger and the Milk for Life project are concrete examples
of social safety net programs whose experience will also be
beneficial to other countries combating poverty and hunger.
I was privileged
to meet with Archbishop Geraldo Magela de Castro in Montes Claros
who explained the enormous contribution that the Milk for Life
project is making to the poor families in the area. I also visited
the Jaíba irrigation project that is transforming the
livelihood of scores of hundreds of poor families dependent
We, at the IMF, have
a long-standing commitment to support Brazil’s efforts to achieve
growth rates that are commensurate with its great economic potential
and to improve living standards, particularly for the poor.
Horst Köhler is the International Monetary Fund’s Managing
Director. For general inquiries send email to email@example.com