Brasília - Minister of Cities, Olívio Dutra, has presented the International Monetary Fund a proposal for a differential calculation of the primary account which would exclude spending on housing and sanitation from the category "government expenditures." According to Dutra, by excluding such spending the country will do two things: continue to met primary account surplus targets and, within a period of 20 years, meet the [UN] Millennium Goals target of providing all Brazilians with housing and basic sanitation.

"We are explaining to the IMF that we do not want these expenditures to be considered part of our public debt in order to enable us to maintain our fiscal restraint policies. The change will permit us to invest much more than we do now, much more than was invested [during the Cardoso administration] between 1995 and 2002," declared Dutra.

Chalés Collyns called the proposal "ambitious," but explained that the objective of the IMF mission he heads is just to check data on the economy and not to deal with changes in calculating the primary account surplus. "We are not dealing with this matter," said Collyns, explaining that another IMF mission, headed by Tereza Ter-Minassian, is taking care of it.

Collyns did add that it was possible that the IMF would accept the proposal. There was the case of basic sanitation last year where an exception was made because of the high return on investment both in a fiscal and social sense. "It is possible, but the rules must be clear," he said.

Agência Brasil
Reporter: Edla Lula
Translator: Allen Bennett
07/29/2004