[PEN-L:30381] lula and the imf

["Ian Murray" <seamus2001@xxxxxxxxx>]

http://news.bbc.co.uk/2/hi/business/2268356.stm
Thursday, 19 September, 2002, 11:39 GMT 12:39 UK
Brazil and Argentina damn IMF

Senior political figures in Argentina and Brazil have criticised the
International Monetary Fund's policies for their countries.
An Argentine cabinet minister has said citizens are "sick and tired" of IMF
officials criticising government policies aimed at pulling the nation out of a
four-year recession.

"There are opinions from the IMF that even the most patient and flexible people
are becoming sick and tired of," the usually low-profile interior minister,
Jorge Matzkin said.

The sentiment was echoed by Brazil's leading presidential candidate Luiz Inacio
"Lula" da Silva, who said loans from the IMF would not end the economic crises
in Brazil and Argentina.

"I don't believe that taking loans from the IMF will offer any economic
salvation for Brazil, or for Argentina," the Workers' Party candidate told
Argentine cable news channel Todo Noticias.

"I believe that Argentina's recovery, and that of Brazil, will come from the
productive capacity of industry and agriculture and tourism ... not from
borrowed money."

Argentine policy

IMF deputy managing director Anne Krueger on Tuesday said Argentina lacked
economic policies, such as those implemented by Brazil, to foster economic
growth.

Argentina is negotiating with the IMF for new loans after the lender, in which
the US is the largest shareholder, stopped credit lines last December.

Ms Krueger said a deal could come soon but did not rule out a debt default on
foreign loans in the meantime.

Negotiations have been complicated by court rulings over economic policy.

The Supreme Court could rule on Thursday on whether the switch of dollar
deposits into devalued pesos was unconstitutional.

Brazilian opposition

Meanwhile, Mr Lula da Silva, the favourite to win Brazil's 6 October
presidential election, has said he would try to avoid taking further money from
the IMF.

"I'm going to work to make sure that Brazil does not need to take IMF money," he
said.

In August, the IMF agreed to lend Brazil $30bn to help South America's largest
economy service its international debts.

The IMF will allow $6bn to be used before the elections.

It has threatened to withhold the remainder if the new president does not comply
with economic policies set out under the loan.

Mr Lula da Silva has been a persistent critic of US foreign policy and the IMF.

The latest Brazilian opinion poll showed that 42% of voters supported him, while
his closest rival, government-backed candidate Jose Serra, trails with 17%.