OFFICIAL-INFORMAL: ELIMINATION OF LATIN AMERICA

UNCLAS BRASILIA 001993

SIPDIS

SENSITIVE

OFFICIAL-INFORMAL FROM CHARGE FOR TREASURY A/S QUARLES

E.O. 12958: N/A
TAGS: AMGT EFIN
SUBJECT: OFFICIAL-INFORMAL: ELIMINATION OF LATIN AMERICA
REGIONAL TREASURY ATTACHE POSITION

REF: Buenos Aires 1806


1. (SBU) Post has learned that as part of a world-wide cost-
cutting move, as of October 1 Treasury intends to eliminate
the Regional Attache position based in Buenos Aires. That
slot covers not only Argentina, but with the position
incumbent frequently traveling to Brasilia, Sao Paulo, and
Rio de Janeiro and other key South American posts. Given
the importance of emerging economies like Brazil in the
international financial markets, Charge requests that
Treasury headquarters revisit this decision.


2. (U) Currently, the Brazilian economy is at a high
point, with growth returning, exports booming, and inflation
in check. However, three short years ago this was not the
case. The incoming Lula Administration had raised interest
rates to sky-high levels in an attempt to stem capital
flight. While we do not foresee a return to this precarious
state-of-affairs in the short-term, when dealing with Brazil
(as is the case with other emerging markets) its best to
keep assets handy. One important assets it is the presence
of the Regional Attache in Buenos Aires. In the event of a
sudden crisis, having the Treasury attach on hand to help
us grapple with the situation would be essential. Seeking
to deal with matters solely from Washington would be
immeasurably more difficult.


3. (U) We know that budgets are tight and in future fiscal
years will become increasingly so. However, in our view the
investment made in maintaining the Attache position in
Buenos Aires would be money well spent. Regards.

Linehan