Impressed by Lula’s Work

     Impressed by Lula's Work

    Brazil’s strong
    performance is clearly bearing fruit: a broad-based
    economic recovery is underway that should strengthen during
    2004, employment is on the rise, exports have expanded at
    double-digit rates, and vulnerabilities have been reduced.
    This leaves Brazil well-positioned to benefit from the global
    by: Horst

    It was with great pleasure that I again visited Brazil. I had
    a very productive meeting with President Luiz Inácio
    Lula da Silva and I would like to extend my thanks to his Excellency
    for his warm welcome. Another highlight of my trip was my visit
    to communities in Minas Gerais that are benefiting from the
    Zero Hunger program and the Milk for Life project, as well as
    to the Jaíba irrigation project.

    It has been a little
    over a year since I last visited Brazil. The changes in this
    short period of time are immense. The government has adhered
    to prudent macroeconomic policies and tackled long-standing
    structural problems by passing reforms of the pension and tax
    system and making progress on a new bankruptcy law.

    This strong performance
    is clearly bearing fruit: a broad-based economic recovery is
    underway that should strengthen during 2004, employment is on
    the rise, exports have expanded at double-digit rates, and vulnerabilities
    have been reduced. These developments leave Brazil well-positioned
    to benefit from the global upturn.

    My discussions with
    the President, who was accompanied by Finance Minister Antonio
    Palocci and Central Bank Governor Henrique Meirelles, focused
    on the need to instill a framework for sustained medium term
    growth and improved equity in Brazil and, more generally, in
    the Latin American region. In this context, we discussed how
    best the IMF and the other international institutions can contribute
    to moving forward economic and social reforms toward this goal.

    We agreed that consistently
    building the social and physical infrastructure needs to be
    given priority in such a framework, especially against a background
    of falling and volatile infrastructure investment in many countries
    in the region.

    The IMF is working
    to develop new statistical and policy guidelines that would
    create more flexibility for increasing sound public investments
    within an overall framework of fiscal and debt sustainability.

    I hope to discuss
    this issue further in the coming months with Minister Palocci
    and other Ministers in the region after an initial discussion
    with the Fund’s Executive Board. Of course, we will be coordinating
    our efforts closely with our colleagues in the World Bank and
    the Inter-American Development Bank (IDB).

    I also listened carefully
    to President Lula’s views on how the IMF can enhance its crisis-prevention
    role in Latin America and other emerging market countries. I
    assured President Lula that crisis-prevention lies at the heart
    of the Fund’s agenda and that the Executive Board will soon
    discuss possible modalities to increase further our role in
    crisis-prevention and in helping countries cope with unexpected

    During my visit,
    I was anxious to see first-hand how the government is tackling
    its mandate to improve living standards for the most vulnerable
    citizens. My visit to Minas Gerais, in the company of Social
    Affairs Minister Patrus Ananias, gave me an opportunity to see
    how the authorities are putting their social commitment into
    practice, and it has left a very deep impression on me.

    The flagship Zero
    Hunger program has generated interest throughout the world because
    of its multidimensional approach that addresses the varied causes
    and manifestations of hunger in both urban and rural communities.

    Initiatives like
    Zero Hunger and the Milk for Life project are concrete examples
    of social safety net programs whose experience will also be
    beneficial to other countries combating poverty and hunger.

    I was privileged
    to meet with Archbishop Geraldo Magela de Castro in Montes Claros
    who explained the enormous contribution that the Milk for Life
    project is making to the poor families in the area. I also visited
    the Jaíba irrigation project that is transforming the
    livelihood of scores of hundreds of poor families dependent
    on agriculture.

    We, at the IMF, have
    a long-standing commitment to support Brazil’s efforts to achieve
    growth rates that are commensurate with its great economic potential
    and to improve living standards, particularly for the poor.

    Horst Köhler is the International Monetary Fund’s Managing
    Director. For general inquiries send email to

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