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Lagarde preaches fiscal discipline in one of Brazil's most dangerous slums

Friday, May 22nd 2015 - 05:42 UTC
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“The people who suffer the most with fiscal indiscipline at the end of the day are generally the poor”, said Lagarde in the Complexo do Alemao favela “The people who suffer the most with fiscal indiscipline at the end of the day are generally the poor”, said Lagarde in the Complexo do Alemao favela

The head of the International Monetary Fund (IMF) encouraged Brazil on Thursday to pursue fiscal discipline, saying it was needed to protect social programs benefitting the poorest members of society. IMF chief Christine Lagarde made the link during a visit to Complexo do Alemao, one of Rio's largest and most dangerous slums and an example of the challenges the country faces as it struggles with low growth and high inflation

 “Fiscal discipline is the necessary basis for financing programs like these,” Lagarde said. “They go together, they go hand in hand” underlined the IMF chief who chatted with a group of women, who had received government aid and training that enabled them to open small businesses in Complexo do Alemao and other favelas in Rio.

“The people who suffer the most with fiscal indiscipline at the end of the day are generally the poor”, said Lagarde.

Overnight, just hours before Lagarde arrived, shots were fired in Alemao, halting the gondola service and leaving residents to bemoan a regular backdrop to their daily lives.

The IMF earlier this year urged Brazil to “strengthen the credibility of economic policy”.

The world's seventh largest economy has endured four years of slow growth and this year the IMF predicts a 1% contraction amid rising inflation. It is now cutting back spending with a goal of producing a surplus of 1.2% of GDP.

Some 60,000 people live in the Complexo do Alemao, grouping 15 favelas where residents often have to run the gauntlet during shootouts between police and drug traffickers.

As well as offering economic advice, Lagarde watched a demonstration of capoeira, an Afro-Brazilian martial art comprising elements of dance and visited a centre where locals sign on to the Bolsa Familia family assistance program.

The government-financed scheme and other social programs are credited with lifting tens of millions of Brazilian families out of absolute poverty over the past decade. To obtain the stipend families must ensure that their children attend school and participate in vaccine programs.

Lagarde praised the Bolsa Familia scheme as having produced “absolutely exceptional” results. “The fact that Brazil spends 0.5% of GDP to combat poverty via its Bolsa Familia is remarkable,” she told reporters.

On Friday Lagarde will participate in a seminar hosted by Brazil's central bank in Rio and hold a press conference thereafter.

Categories: Economy, Politics, Brazil.

Top Comments

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  • ilsen

    Fiscal Discipline? Brazil?
    Fiscal Discipline? Socialists?

    Asking Brazilian Socialists for Fiscal Discipline?

    Hahaha! hahaha! Hahaha! Hahaha!

    Anyone want to buy a chocolate teapot?

    May 22nd, 2015 - 09:45 am 0
  • Brasileiro

    She did not come to talk about the “Brazilian fiscal discipline.” She came to ask forgiveness for criminal acts committed by the Royal Bank of Scotland, Bank of America, Barclays, JP Morgan and Citibank.

    These banks soon suffer billions fines for manipulation of Real X Dollar exchange between 2008 and 2012. And most likely will be prohibited from operating in Brazil.

    The West is corrupted by speculation.

    May 22nd, 2015 - 11:16 am 0
  • ChrisR

    @ 2 Brasso

    Back to the old favourites I see: the PLA Navy from 2013 no less.

    Do tell WTF that has to do with the IMF and your ignorant post about western banks?

    Do you not remember your Finance Dummy visiting the UK last week to plead that the nasty PT have been seen off and can he please have some GREAT BRITISH POUNDS invested in Brazil, pretty please?

    NOBODY in their right mind would touch Brazil with a barge pole, especially to lend them money.

    In less than four years DumbAss Dilma and The Chief Crook, Lula, have turned what I thought was a burgeoning economy and a country perhaps going places into a shit country going down the sewers.

    Is this the new uniform for the “sailors”, complete with died balck chicken feathers?

    May 22nd, 2015 - 06:31 pm 0
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