Brazil’s low-key IMF presence prompts questions

Brazil kept a low profile at this year’s IMF/World Bank meetings, with one expert suggesting that the “messy” US situation may have discouraged Brazilian ministers from taking part.

The Brazilian delegation is currently led by the president of its central bank, Alexandre Tombini. Luciano Coutinho, president of the Brazilian development bank, is also present, but finance minister Guido Mantega is being represented by his international affairs secretary Carlos Cozendey.

The presence of the budget and planning minister Miriam Belchior at a side event was also announced, but it was later denied.

“This is one the most serious moments in recent history because of what happens in the US, but at the same time, it is probably the least consequential meetings of the two institutions, because the principal shareholder of the meetings is in such a mess. The system is deadlocked,” said Paulo Sotero, director of the Brazil Institute of the Woodrow Wilson International Center for Scholars, in Washington. “Some may say, in view of what’s going on in Washington, why bother?”

Mantega cancelled his visit to Washington just a few days ahead of the meeting. People close to him said he would rather “take care of domestic matters,” such as the delayed concession programme in infrastructure, and a review of a profit tax for multinational companies based in Brazil.

An aide to Belchior told Emerging Markets she was busy completing an assessment of the government’s flagship infrastructure programme.

Brazil played an active role at the IMF in the past and has been a staunch protagonist of the global governance reform, but that is now stalled, partly due to the reluctance of the US Congress to examine it. Leaders of the Latin American country also played a key role in boosting the G20 five years ago. The country was also active in turning the BRICS into an institutional reality in recent years. Plans for creating a BRICS bank are still underway, but Brazil’s ambition to be a protagonist in international economic affairs may have subsided due to the present circumstances. “This is a more inward looking government. It is kind of natural given the lack of interest shown by Mantega to engage internationally,” said Sotero.

“The financial tsunami is not an issue anymore, nor is the currency war. The government has been very quiet about these topics,” he said. Sotero added that foreign investors are often “frustrated,” if not “angry,” as they are not convinced by the government’s business-friendly rhetoric. “There is currently a negative mood towards Brazil.”

President Dilma Rousseff’s planned state visit to the US later this month might have helped project a different image, but Brazil decided to postpone it after strong allegations of US spying against Rousseff herself and the oil company Petrobras.

The episode “may be used [in the US] by some who are nostalgic of the cold war, and think Brazil is not a friendly nation, because it helps build a port in Cuba, and so on,” Sotero said.