Re: Brazil and the IMF

[Trond Andresen <trond.andresen@xxxxxxxxxxx>]

At 10:05 11/1/2002 -0600, you wrote:
> PKT friends --
>
> I have just published an essay on Brazil, the IMF, and larger monetary
> issues through the Levy Institute;  it is available at
> http://www.levy.org/docs/pn/02-2.html for those who may have an interest.

I just read James Galbraith's essay. Among other things he writes:

> .....
> It follows that the only route available to Brazilian policymakers acting on
> their own to restore growth and expand public goods and services in the
> short run must involve a reduction of debt payments. The easiest way to
> achieve this is straightforwardly to cut back on payments while imposing
> strict controls over capital flight.
> .......

Malaysia's "temporary" capital contols, instituted on 1 Sepember 1998, have
been very successful, and are in operation to this day because of that. The
U.S. and global finacial circles will scream and holler if Brazil does a
similar a thing. But what can they *do* if Brazil does so, and isn't the
worst alternarive
anyway today's situation, where president Lula da Silva must yield to
threats of capital flight any time he tries to do something to qualitatively
remedy the dire sosial and economic situation in Brazil?

Trond Andresen
Norway