Press Release No. 10/215

Press Release: IMF Managing Director Dominique Strauss-Kahn Says Brazil Key in Global Economic Governance; Signs Agreement for New Joint Regional Training Center for Latin America

May 26, 2010

Brazil “has a key role to play in global economic governance. It is the largest economy in Latin America and is deeply integrated into the global trade and financial network. Brazil’s future is inextricably linked to global economic prospects,” said International Monetary Fund Managing Director Dominique Strauss-Kahn, as he was ending a two-day visit in Brazil. The country now enjoys substantial economic stability, he noted, but faces some potential risks from possible overheating. “While not too serious at this point, these risks require monitoring, including in the context of strong capital inflows,” the Managing Director said in Brasilia, where he met Finance Minister Guido Mantega and was due to meet President Luiz Inácio Lula da Silva.

The Managing Director and Minister Mantega also signed a Memorandum of Understanding for a new Joint Regional Training Center for Latin America. The new center will work within the Finance Ministry’s School of Financial Administration (ESAF) and is a joint venture that includes the Ministry of Foreign Affairs, through the Brazilian Cooperation Agency (ABC) and the Department of Financial Affairs and Services (DFIN); and the Central Bank of Brazil, through the Central Bank’s University (UniBacen); as well as the IMF Institute.

The center expects to train government officials from all Latin America countries in the areas of macroeconomic management and policies, financial programming, financial and banking sector issues, government finance, and external sector issues and statistics. The program may also include seminars for high-level government officials. The new center extends the work of the Brazilian Technical Center (BTC), which since 2001 has given an average of 12 training courses per year to Latin American and African Portuguese speaking public sector officials.

Discussing the Global Economy in São Paulo

Mr. Strauss-Kahn also visited São Paulo on May 25, where he participated in a forum organized by Globonews network on “The Global Economy in the Post-Crisis World,” moderated by news anchor and economic commentator Carlos Alberto Sardenberg and with the participation of Arminio Fraga (chairman of Brazil’s BM&F Bovespa and partner of Gavea Investimentos) and Mauricio Botelho (Chairman of the Board and former CEO of Embraer and partner of Arsenal Finance).

In remarks and in a question and answer session in front of an audience of 200 people, including academics, the private sector and the press, Mr. Strauss-Kahn said the world avoided a great economic depression and will recover thanks to close cooperation by the international community, he said. Referring to a critical lesson from the recent crisis, he said success came from the approach championed by world leaders, including Brazil, of the G-20 group of advanced and emerging economies and the IMF at the height of the crisis. “National oriented responses are not the way, since they risk creating economic conflicts,” said Strauss-Kahn, adding that financial regulation in particular should be coordinated internationally.

Research and Development

Mr. Strauss-Kahn also saw firsthand some of the state of the art science research being conducted in Brazil, during a visit to the Institute of Technological Research (IPT) from the University of São Paulo, where he was welcomed by São Paulo governor Alberto Goldman. He visited laboratories and installations at the Center for Naval and Oceanic Engineering. “It is good for us macroeconomists to have a look at what scientists are doing that can have a real impact on a country’s growth and development,” Mr. Strauss-Kahn added.