Page last updated at 00:01 GMT, Thursday, 26 March 2009

Brazil pushes for bigger G20 role

By Gary Duffy
BBC News, Sao Paulo, Brazil

Brazil's President Luiz Inacio Lula da Silva, right, meets Brazil's Finance Minister Guido Mantega to discuss the financial crisis in Sao Paulo, Monday 20 October 2008.
Brazil's leaders hope that developing countries will have a greater voice

As the largest country in South America, and one of the world's leading developing nations, Brazil will come to the G20 summit in London in the expectation of making its weight felt.

The Brazilian government believes the larger gathering is much more representative than the smaller G7 annual summit, and is therefore a better forum in which to address the world economic crisis.

If you want to have Brazil, India, China, South Africa participating in the effort they have to have more voice also in these financial institutions
Brazil's Foreign Minister Celso Amorim

Brazil's President Luiz Inacio Lula da Silva will arrive at the meeting keen to press the case for reform of the world's financial institutions to give developing countries a bigger say.

He is also expected to press for more credit to help poorer and emerging countries and to argue strongly against protectionist policies.

Global solutions

President Lula comes to the G20 summit having long argued that the world is facing a "global crisis which requires global solutions".

Brazilian supermarket
Brazil has become a global food superpower

In particular, he believes that the answers can only be found if emerging economies such as Brazil and India are given more clout in the world's financial institutions such as the IMF and the World Bank.

The crisis is now hitting South America's largest economy much harder than had been anticipated by the government, which is anxious not to lose the many gains the country had made in recent years.

Although Brazil's economy grew by 5.1% during the whole of 2008, it shrank by a dramatic 3.6% in the last quarter of the year, the biggest fall since 1996.

Exports have been hit, and between December and February 750,000 jobs were lost.

The government still believes that a strong internal market, $200bn (£138bn) in international currency reserves, and a diversity of trading partners will help Brazil weather the worst of this storm.

Nonetheless the impact of the crisis is being felt, and the official projection for growth this year continues to be more optimistic than that of many economists, who are talking of close to zero growth or even worse.

"We will grow in 2009 less than we would like, less than we could grow if there was no external crisis," President Lula insisted this month. "But we will grow."

Political fall-out

Sao Paulo
Cities like Sao Paulo have been booming in recent years

At the same time opinion polls suggest that while the government's approval rating is still very high, it is now being affected for the first time, and analysts have cited economic problems as the main reason.

The president, meanwhile, continues to make the argument that the current difficulties began in rich countries, and they now need to be aware of the impact of their failure on poorer and developing nations.

He has been vociferous in opposing protectionist policies and is also expected to argue for reform and greater oversight of global financial markets.

Help for developing countries

"Brazil is not looking for help for itself," Foreign Minister Celso Amorim told the BBC News website, when asked about its intentions at the next G20 summit.

"But I would say something that would be extremely helpful would be to have more credit for developing countries in general, and specifically more finance for trade between and among developing countries, because this is what has been lacking."

"If you take the statistics after the crisis started, the trade between developing countries has been affected and to a large extent not so much because of a fall in demand - there is also a fall in demand - but because of the difficulties with credit."

Bigger role

Brazilian children
Poverty is still widespread in developing countries like Brazil

He is also clear that developing countries need to be given a bigger say.

"I suppose the leaders will also discuss what they should do in a coordinated way in terms of how they deal with their own economies, by avoiding protectionism for instance, but at the same time stimulating demand.

"But then you have the structure of the financial institutions and that also has to be changed.

"If you want to have Brazil, India, China, South Africa participating in the effort they have to have more voice also in these financial institutions."

Rubens Barbosa, a former Brazilian ambassador to the United States and the UK, says while President Lula may not get all he wants it is important that the case is made.

"I think that it is unlikely that this agenda will be implemented," he told the BBC News website. "But I think it is an important message to be transmitted.

"We don't know how strong the developed countries will be in the meeting. I think some concrete measure will be taken because the situation is very serious."

As part of its general aims, Brazil will see as a welcome development the decision this week by the IMF to double credit limits for countries struggling with the financial crisis and to relax loan conditions for emerging countries that need short term assistance, although it says it does not need to ask for funds.

And whether it gets what it wants in London, the G20 gathering will be regarded as another step in a natural evolution in the decision-making process, which involves developing nations taking an increasingly important role on the world stage.

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