Rio,8/7/2003(Agencia Brasil-ABR) – The president of the Andean Development Corporation (Corporação Andina de Fomento) (CAF), Enrique Garcia, and the president of the Brazilian Development Bank (BNDES), Carlos Lessa, met yesterday and both declared that they favor a change in the International Monetary Fund's definition of expenditures which is part of its loan policy. Garcia and Lessa said they did not consider public investments expenditures.

According to Garcia, the IMF's criteria for fiscal deficits was not consistent. The organization applies different standards in Europe and Latin America. As a result, government projects in Latin America face difficult hurdles with bottlenecks in infrastructure especially troublesome, he said.

Lessa declared that most public administrators were in favor of changing the definition. He added that the Brazilian accountability law (Lei de Responsabilidade Fiscal) (LRF) had the same effect by lumping both good and bad public administrators together and not permitting either to spend money.

"As a result we have 2,000 muncipalities with payment default problems. Their debt level is higher than that permitted by the LRF. Their hands are tied. They cannot contract more debt without facing a daunting amount of red tape," said Lessa. (AB)