Aug. 6, 2002 [LINK]
Secretary O'Neill Visits Brazil
Two weeks after expressing skepticism about IMF bailout loans to Brazil lest the money end up, as he unwisely put it, "in Swiss bank accounts," U.S. Secretary of Treasury Paul O'Neill arrived in Brazil for a meeting with Latin American financial officials. O'Neill's comment was not just tactless but also rather unfair, as the Brazilian government has pursued sound economic policies during the Cardoso administration. Brazil fought corruption and was perhaps the biggest success story in all of Latin America during the 1990s, and its people suffered considerable austerity while the government got its financial house in order. Brazil is NOT a banana republic. U.S. diplomats have tried to reassure President Cardoso and other officials that the U.S. supports them, but the incident and consequent financial panic have ironically boosted the political hopes of leftists, who have tapped into Brazil's long-dormant nationalistic spirit. To pave the way for O'Neill's visit, the Bush administration has reversed its previous policy by approving large emergency IMF loans to both Uruguay and Brazil. We can't afford to lose allies in the war against Al Qaeda and Islamic terrorists, so such accommodations are necessary..