[stop-imf] IMF backpeddles in Brazil (fwd)

[Robert Weissman]

IMF Retracts Criticism of Brazil Feb 12 2000 RIO DE JANEIRO, Brazil (AP)
-- The International Monetary Fund has retracted criticism of Brazil's
anti-poverty plan following an outburst of nationalist indignation and
calls for IMF representative Lorenzo Perez to be kicked out of the
country. Perez released a statement late Friday saying the government's
explanation of the plan had convinced him that it would not endanger
Brazil's ability to reduce its debt. Reducing the debt and a chronic
budget deficit are parts of Brazil's 1998 agreement with the IMF for a
$41.5 billion bailout loan. On Thursday, Perez had openly questioned the
wisdom of the proposed 10-year anti-poverty program, which would cost $2.3
billion a year. Most of the money would come from the privatization of
government property, which Brazil now uses to defray a huge domestic debt
of about $294 billion. ``Brazil already spends a significant amount of
money on social programs,'' Perez said in the first statement. ``This
money has to be used more effectively.'' The statement managed to unite
the political right and left in outrage. Senate President Antonio Carlos
Magalhaes of the rightist Liberal Front Party said it was ``undue
meddling'' in the nation's affairs. Rep. Jose Dirceu of the leftist
Workers Party urged the government to send Perez home. In the 1980s, when
Brazil went broke and was bailed out by the IMF, many Brazilians blamed
the Washington-based fund for the recession that ensued. IMF-bashing
rallies were common. Anti-IMF sentiment erupted again in 1991, when IMF
economist Jose Fajgenbaum observed that structural reforms in the economy
would require changing the constitution. Then-President Fernando Collor de
Mello said Fajgenbaum should ``go reform his own house.''