OFFICIAL-INFORMAL

UNCLAS BRASILIA 002745 SIPDIS OFFICIAL-INFORMAL FOR TREASURY D/S KIMMITT, U/S ADAMS AND DAS NANCY LEE E.O. 12958: N/A TAGS: ECON AMGT SUBJECT: OFFICIAL-INFORMAL REF: BRASILIA 1993 ¶1. In Reftel, post made the case for maintaining a Treasury Attache presence in South America, observing that the current incumbent of the position, posted in Buenos Aires, helps provide vital coverage of macro-economic and international financial developments in Brazil. Events since then have only underscored the importance of this. Local financial markets have oscillated dramatically as investor attitudes have swung between pessimism and enthusiasm. Given the strength of the real and high returns on local bonds, Brazil has assumed an even higher profile among the emerging markets. As Secretary Snow's successful August 1 to 3 trip to Brazil demonstrated, now is not the time for Treasury to retreat from Latin America. ¶2. Indeed, we would urge Treasury to consider not only maintaining the Attache position on the books, but moving it to Sao Paulo - the financial center of South America. In Sao Paulo, the Attache would be able to easily tap the expertise of the city's extensive community of private sector market analysts, while, given the excellent international air connections the city offers, would be a short plane ride from the region's other capitals. ¶3. As Treasury WashDC's thinking on these issues develops, we would appreciate the opportunity to further weigh in on this debate. DANILOVICH