[stop-imf] Brazil Workers' Party May Give Backing to IMF Plan.

[Robert Weissman]

Depending on how you look at it, this item seems a disturbing sign of
ongoing moderation by the Brazilian Workers' Party, or a testament to
the power of international capital to check progressive movements
seeking power, or both.

--
Robert Weissman

World Bank Press Review (excerpt)
July 8, 2002

Brazil Workers' Party May Give Backing to IMF Plan.  Brazil's left-wing
Workers' Party (PT), which is still leading opinion polls ahead of
October's presidential elections, says it may back an accord with the
IMF
in order to reassure investors, reports the Financial Times.  In recent
informal meetings with the Brazilian government, the Fund has indicated
it
would be willing to back a plan to seek pledges of sound economic
policies
beyond the current administration.

Noting that the current $15.6 billion loan agreement with IMF expires in

December of this year, the story says an agreement backed by the leading

candidate is seen within the government's economic team as a way of
getting Luiz In?cio Lula da Silva, the front-running candidate of the
PT,
to formalize recent pledges of sound policies and to secure
stabilization
efforts of recent years.

A Los Angeles Times editorial (7/6 A12) writes Brazil's stock prices are

foundering, and last week J.P. Morgan's bond market index had Brazil as
a
riskier investment than even impoverished, overcrowded Nigeria.

That doesn't make much sense. Brazil is Latin America's largest country
and produces enough steel, autos, chemicals, machinery, shoes and other
products to generate a gross domestic product of about $500 billion. Yet

investors seem to believe that among the main emerging economies, only
Argentina, which defaulted on its debt in December, is a more hazardous
place to put money. International investors have both economic and
political concerns about Brazil.

First, the nation has enormous debt-55 percent of its GDP. However,
leading international economists believe that Brazilian authorities'
astute handling of the economy after a 1999 devaluation crisis shows
they
have the brains to finance the nation's debt without creating the chaos
that plagues Argentina.

Meanwhile, Da Silva says in an interview with La Vanguardia (Spain) that

Brazil will not accept policies imposed by the IMF as Argentina has.
The
Argentine and Brazilian governments' neo-liberal policies accentuate
their
external dependency and compromise the countries' present and future, he

says.  The governments have surrendered to demands of the IMF and the
World Bank and have been timid with the WTO, Da Silva says, adding that
if
he were elected, his team would renegotiate energy contracts.