Brazil Starts Talks on Converting Its US$ 202 Billion Foreign Debt

In July Brazil will begin negotiations with creditor nations to convert part of its foreign debt into investments in education. Brazilian Minister of Education, Tarso Genro, says the talks will probably extend into next year.

Brazil will be following in the footsteps of Argentina which was able to spend some 68 million euros (US$ 100 million) in foreign debt payable to Spain on education. The deal was negotiated with the Spanish government.


Genro says “There is no doubt we can exchange debt for investments in education. It all depends on the negotiations.”


He points out that there are various conversion mechanisms that bilateral talks can achieve, which will make it possible to exchange part of Brazil’s US$ 202 billion foreign debt for investment in education.


Bilateral talks with Spain begin on July 11, when Genro will present two projects. One is for the creation of bilingual classes in regions along Brazil’s borders with Spanish-speaking nations.


The other is for the construction of 800 schools in rural areas at a cost of some US$ 25 million that would ideally be deducted from Brazil’s foreign debt with Spain.


Brazil’s total debt with the Club of Paris, consisting of 13 countries, of which Spain is one, is US$ 3.5 billion.


The deputy executive secretary at the Ministry of Education, Jairo Jorge, says that following the talks with Spain, Brazil will seek similar negotiations with other Club of Paris members, such as Canada, Switzerland, Sweden, France and Germany.


ABr – www.radiobras.gov.br

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