Brazil & Southern Cone - March 2009 (ISSN 1741-4431)

The government has been stung by criticism that it has not been working on an anti-crisis plan. It says that it has devised a four-phase plan, the product of six months of planning.  It published the plan, which it said called for extra spending of US$1.48bn, in mid-February. 

According to the finance minister, Dionisio Borda, the first phase, which was implemented in October 2008, was to provide extra monetary resources to the economy.

The second phase formed part of the budget. The government's main priority for 2009 is to promote employment. It will do this by expanding its public works programme. A related anti-poverty programme is focused on supporting 120,000 of the poorest households.

The third element in the plan is to line up financing for an anticipated US$300m fiscal deficit in 2009. The government expects to complete this financing either in March or April. So far, it has secured US$50m. The hope is that the IDB will provide the rest. Borda admits that unless the government secures additional loans it will run out of cash by May 2009. The vice president, Federico Franco, estimates that this year's deficit could end up at US$500m.

The fourth phase is to respond to congressional calls to secure funding for a further US$105m in short term projects. Of this, US$37.5m would go to “family-owned farms", US$10m to boost exports and US$42m on education.