The International Monetary Fund (IMF) authorized a Brazilian pilot project that will allow the government to detach US$ 3 billion from its calculation of the primary surplus (the difference between the revenues and expenditures of federal and state governments and state enterprises, excluding debt payments).
The resources will be used for public investments, chiefly on infrastructure projects. This step constitutes a positive response to a Brazilian government grievance since the first half of last year.
The measures authorized by the IMF are expected to detach the equivalent of US$ 1 annually for selected investments between 2005 and 2007.
According to an official note issued by the Fund, the Brazilian pilot project in no way implies a change in the way expenses are treated in calculating the primary surplus.
The Minister of Finance, Antônio Palocci, cheered the arrangement made by the Fund. The measure is unrelated to the existing agreement between Brazil and the IMF that ends in March.
“I think it is very important for Brazil, because it represents an interpretation that Brazil put together with other countries and which now has a significant backing from the Fund,” the Minister commented.
The Federal Budget approved in December already includes eight infrastructure projects that will compete for the initial funds covered by the pilot project.
These projects include highway restoration, irrigation programs, improving federal receipts, integration of meteorological data, and even the creation of the Amazon Biotechnology Center.
Translation: David Silberstein