Brasilia - Changes in fiscal criteria and a more widespread use of preventive loans were discussed during a meeting between president Luiz Inacio Lula da Silva and the managing director of the International Monetary Fund, Horst Kohler.

Kohler said that the IMF is looking into a formula that will permit countries to spend money on infrastructure within a framework of fiscal responsibility. The change is a longstanding demand by many Latin American governments that have felt hindered by IMF strictures which insist on considering all outlays expenditures, while they believe some should be considered investments.

Minister of Finance, Antonio Palocci, declared that it is in everyone's interest to strengthen the quantity and quality of infrastructure investments, especially in a region on the verge of a new period of growth.

Another subject discussed during the Kohler visit was so-called preventive measures as part of future IMF agreements."An important evolution is taking place in the relationship between the IMF and borrowers. This makes loans safer and more timely, removing the need for long programs," said Palocci.

Kohler said that the time for arguing about what went wrong in Latin America is past. "The minister of Finance and the head of the Central Bank in Brazil know how to move ahead. We have turned a page. What we need more than ever is to find ways to prevent crises, to get the IMF in tune with the needs of Latin America and ensure that IMF assistance will be proactive," he declared.

Kohler said he was impressed by the Zero Hunger program and its range. He also praised Brazilian economic policy. "Those policies are beginning to bear fruit. We now have clear signs that the country is growing again on a broad, solid base," concluded Kohler. (AB)