Brazil set out on a new course in 1999, both in the management of its economy and in its approach to the international capital markets. Concerns over the country's deficits provoked huge capital Xight and a currency devaluation last January. But Brazil did not tip over into crisis. President Fernando Enrique Cardoso, Wnance minister Pedro Malan and central bank governor Arminio Fraga have pushed through tough measures: cutting spending and increasing taxes so as to produce a primary (before debt service costs) public-sector surplus of 3% of GDP. This is the target for the next three years.
Meanwhile a new approach has also been evident among officials at the central bank under Daniel Gleizer, director of international afairs, charged with managing the country's foreign liabilities. Gleizer, an economist, took up the position in March. He recalls: "Brazil had to rebuild credibility across the board last year. The challenge for us was to build credibility over our liability management at a time when many international investors still had doubts about the economic fundamentals."
Gleizer saw the challenge as being to "lower borrowing cost over the medium term through an active liability management strategy, while allowing easy and fluid access to international markets and also help the private sector to tap the markets in an eYcient way."