MercoPress. South Atlantic News Agency

IMF suggests more austerity in Brazil
Lula faces first strike.

The International Monetary Fund, IMF, suggested Brazil should have a more ambitious medium term fiscal target to better protect the country against possible external shocks and praised officials for having committed themselves to a greater autonomy for the Central Bank.

In 2002 Brazil received IMF assistance almost equivalent to 31 billion US dollars and "did a very good job in reducing misbalances in its economy and improving social conditions".

However uncertainties remain because of the heavy debt burden and the slow expansion of the Brazilian economy points out the IMF. In 2002 the Brazilian economy grew 1,5%, almost similar to the 1,4% of 2001, but inflation reached 12,5% compared to 7,7% two years ago.

IMF praised President Luiz Inacio Lula da Silva administration for having increased its primary budget surplus target for the current fiscal year to 4,25% of GDP, but also requested greater "budget flexibility to enable a more effective fiscal policy in unstable times".

IMF suggestions became public when Brazil reported that in the third week of March the country had already managed a 3,1 billion US dollar surplus in its trade balance, with a strong showing from exports that increased 6% over February and 16,5% over the same period a year ago.

Even when agricultural commodities have been the most dynamic in the first quarter of 2003, semi-manufactured and manufactured goods also showed an encouraging performance according to the Development Ministry Foreign Trade Office.

Exports so far reached 13,25 billion US dollars and imports 10,15 billion.

Lula faces first strike

The Metal Workers Union of Sao Paulo announced it's calling a strike this week in forty factories to demand a 10,3% salary indexed adjustment. This would be the first labour conflict for the current Workers Party government headed by president Luiz Inacio Lula da Silva, a former metal workers union leader.

Strike leader Eleno Bezerra said negotiations would be done directly with the companies involved. The powerful Industry Federation of Sao Paulo anticipated that "collective bargaining" was out of the question because of the different financial situations faced by several factories.

Mr. Bezerra denied the objective of the strike was to politically embarrass the government, "on the contrary we want this government out of the labour dispute. We have no intention of harming a government whose president led some very important strikes in this country".

The striking metal workers belong to Union Force a small dissident group from the powerful Central Unica de Trabalhadores, CUT, that supports President Lula da Silva, and so far have remained silent.

However, a reliable CUT source remarked to the Sao Paulo press that "this is the first time Union Force is striking for an indexed adjustment since 1994", adding that the announcement was simultaneous to the launching of Paulo Pereira da Silva, Union Force's president, candidacy for mayor of Sao Paulo in the coming municipal elections.

Mr. Bezerra denied the electoral timing of the strike and said that "we're fighting to recover the last six months inflation", adding that in 2002 only 45% of the different industrial categories managed a 100% inflation recovery.

President Lula da Silva during a visit to a car plant in Sao Paulo avoided talking about the strike and announced that next May 1st would be the first time a Brazilian president is invited to participate in a workers commemoration.

"Wherever there's a group of workers, there you will find Lula talking with them", underlined the Brazilian president.