Note on the CAS-Brazil 2003-2007
10/12/2003

The World Bank published on Dec. 9, 2003 the Country Assistance Strategy for Brazil for the period of 2003-2007 (CAS-Brazil) (see http://www.obancomundial.org/ index.php?action=/content/view_folder&cod_object=1792. The bank has promised to make available a Portuguese translation of the document.

The CAS-Brazil states that civil society groups were consulted in the process of elaboration of the document. Yet in reality neither Rede Brasil nor other crucial civil society actors in Brazil did effectively participate in that process.

The CAS-Brazil comes filled with the usual World Bank rhetoric. However, this rhetoric itself reveals that the programs supported by the bank incorporate the vision that development hinges on economic growth obtained from the operation of “the market” – a vision that is highly questionable.

On the other hand, paragraph 179 of the CAS-Brazil indicates the extent to which strategic planning for the allocation of the bank’s credits is politically coordinated with the policies of the International Monetary Fund (IMF). Paragraph 179 states:

“The main objective of Bank support for ensuring macroeconomic stability would be the reduction of vulnerabilities through effective debt management and a stronger institutional framework for fiscal policy, directed at increased credibility with investors. As long as Brazil is supported by an IMF program, the Bank will complement that program in its areas of expertise, such as debt management, social security, other structural expenditure reforms, and public expenditure management. In the absence of such program, the Bank could step up its own macroeconomic work.”

As is made clear by the above transcription:

(a) In the multi-year planning of the allocation of its credits to Brazil, the World Bank plays the role of a perfect partner of the IMF, adopting the same policies advocated and implemented by the IMF.
(b) The World Bank will adopt policies that will “complement” IMF programs.
(c) In the absence of an IMF program, the bank will continue to adopt macroeconomic policies (evidently, of the same kind as those approved by the IMF).
(d) As is the case with IMF programs, World Bank loans will serve mainly to secure “increased credibility with investors”, and not necessarily to support policies that are fair and truly equitable, even when they are not in the immediate interest of investors.
(e) The World Bank will be influencing the implementation of very controversial policies (fiscal reform, social security reform) which should be influenced – and should have their content determined – by the will of Brazilian voters, not by multilateral financial institutions and their conditionalities.

In the CAS-Brazil it is also stated (see paragraph 185) that the Brazilian judicial system will receive AAA support (Analytical and Advisory Activity). It is only natural that such support be aimed at preventing that judicial authorities introduce hindrances that may affect the implementation of structural reforms advocated by the World Bank and the IMF for the benefit the market – not for the benefit of citizens and workers. Insofar as World Bank influence is allowed to be brought upon judicial courts through AAA, a core element of the system of checks and balances of democracy in Brazil is put at risk as a result of multilateral policies.

In sum, the forms of action of the World Bank and of its sister-institution, the IMF, continue to undermine the values of democracy in Brazil. The content of the programs of financial assistance are not openly debated with civil society. Moreover, the outcomes of such programs are very often questionable and unfair. Finally, the pressures exerted upon governments by means of conditionalities are not rooted in the democratic process and are thus wholly illegitimate.

This situation prevails because the Brazilian government is congenial towards the style of policy-making of multilateral financial institutions, whereas it should contribute to establish a sovereign pattern of relationship with them.

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