Last year the World Bank lent billions of dollars to Brazil, claiming that they would support social safety-nets during the financial crisis. In fact Brazilian NGOs are now complaining that the loans only went to prop-up the currency. The “social conditions” attached to the loans stipulated that the Brazilian government should maintain its core spending in the social sectors “as far as possible”. However, spending was maintained at 1998 levels and not raised in line with the 1999 budget proposals, while in some cases core programmes were cut. Approval of a similar loan from the Interamerican Development Bank has been stalled in Congress. Rede Brasil is calling for improved Congressional oversight of loans from multilateral organisations. Large Bank loans to support IMF programmes have left the Bank with little margin for increasing its lending in the future. Whether or not to provide more capital to the Bank will be discussed at the Annual Meetings in late September. However, it appears unlikely that the Bank will receive more resources now that IMF finance is more secure. Myles Wickstead, the UK‘s Alternative Director at the Bank, claims that now the IMF has received its quota increase and the New Arrangements to Borrow it will have sufficient money to deal with future crises without bringing in multilateral development bank money.
See Rede Brasil website: www.brnet.com.br/pages/rbrasil
