In July, at a meeting in Spain, Brazil plans to present a proposal to convert part of the country’s foreign debt into investments in education.
The Brazilian Ministers of Finance and Foreign Relations will discuss options for this conversion with representatives of financial institutions, as well as the establishment of a benchmark to guide other negotiations.
The deputy executive secretary of the Ministry of Education, Jairo Jorge, judges that “the international atmosphere is favorable to this idea, because the world is aware of the importance of education to a country’s sustainable growth.”
The idea consists in applying on education funds that would be used to pay debts to other countries and multilateral organs (such as the World Bank, the Inter-American Development Bank, and the International Monetary Fund), which hold nearly 20% of Brazil’s foreign debt.
Brazil’s foreign debt currently amounts to around US$ 200.4 billion (545 billion reais).
Proposals already exist for debt conversion on behalf of heavily indebted countries, such as Nicaragua, Ecuador, and Bolivia, but they don’t cover countries like Brazil.
According to Jorge, Spain’s initiative in pardoning 60 million euros of Argentina’s foreign debt demonstrated that countries that don’t belong to the group of heavily indebted countries are also in need of this kind of support.
The secretary says that there will be no stumbling blocks to negotiations with multilateral financial institutions.
“These organs already hold the view that education is not an expense but, rather, an investment.”
According to World Bank data, Latin America’s foreign debt was US$ 728 billion in 2002, 63% more than in 1990.
For the representative of the United Nations Education, Science, and Culture Organization (UNESCO) in Brazil, Jorge Werthen, indebted countries face difficulties in investing on social policies.
He says that the proposal to negotiate part of the debt does not jeopardize the country’s relationship with other creditors.
“Brazil has an excellent international image, and the world is convinced that it is necessary to make investments in education, science, and technology. The returns are very great.”
Translation: David Silberstein
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