Brazil’s Lula Has Been Calling the Powerful

 Brazil's Lula Has Been 
  Calling the Powerful

Brazilian President
Lula has asked Bush and other First-World
leaders to support changes in the IMF classification of government
outlays in productive sectors. Lula wants such expenditures to
be seen as investments. This way, countries would be able to
spend more while remaining within fiscal limits set by the fund.
by: Nádia
Faggiani

President Luiz Inácio Lula da Silva continues to make telephone calls
to leaders of developed nations. During the conversations, Lula asks them
to support changes in International Monetary Fund policy regarding fiscal
restraint in developing nations. The idea is to allow governments in poor
nations to spend on infrastructure so they can grow.

So far, Lula has spoken
the leaders of the United States, England, Germany, Spain and France. The
next scheduled conversation will be with Silvio Berlusconi of Italy.

According to presidential
aide, Marco Aurelio Garcia, the objective of the changes in IMF policy is
not just to help Argentina. "Other countries are going through difficulties.
Peru and Ecuador are being harshly punished. They are paying what they cannot
pay. We want a change in the accounting procedures on infrastructure expenditures.
They should be seen as investments, not as spending, when fiscal responsibility
is calculated. It is in the interest of Brazil to help not only Argentina,
but all of South America where there are many difficulties," said Garcia.

In his telephone conversations,
Lula has called for the creation of an emergency fund to protect Latin American
countries in cases of turbulence on international markets.

According to Garcia, the
Brazilian government has not decided what its position will be if Argentina
defaults on a US$ 3.1 billion debt payment which is due this week. Argentina
insists it will only pay if the IMF revises the terms of its loan agreement.

In one of the calls, Lula
spoke with George W. Bush of the United States for 15 minutes. The Brazilian
President asked Bush to support changes in International Monetary Fund classification
of government outlays in productive sectors. Lula wants such outlays to be
seen as investments and not expenditures; that way the government would be
able to spend more while remaining within fiscal limits set by the fund.

Lula also held telephone
conversations with French President Jacques Chirac and German Chancellor Gerhard
Schröder. During these calls, the Brazilian President once again called
for greater flexibility in the rules imposed by the International Monetary
Fund (IMF) on Brazil and other Latin American countries.

During the conversations,
which lasted around 25 minutes each, Lula requested that the French and German
representatives in the IMF support two Brazilian proposals: 1.) that, in its
calculations, the Fund not count as expenses the productive investments made
by public enterprises in Latin America; and 2.) that the IMF create a type
of insurance to protect Latin American countries from eventual crises that
arise outside the region.

According to presidential
spokesman. André Singer, the current accounting system adopted by the
IMF for expenses in Latin America stifles initiatives in various sectors,
especially in the area of infrastructure. According to Singer, President Lula
considers economic growth the principal factor of peace in the region nowadays—which
also led him to ask Chirac and Schröder for their support.

Earlier this month, Minister
of Finance, Antonio Palocci, spoke to the visiting managing director of the
IMF, Horst Kohler, about the same issue.

Nobel Economics Prize
winner, Joseph Stiglitz, from the United States, suggested the name of Armínio
Fraga, ex-president of the Central Bank, to assume the post of managing director
of the International Monetary Fund (IMF), with the resignation of Horst Köller,
who left to become candidate for President of Germany.


Nádia Faggiani works for Agência Brasil (AB), the official
press agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br

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