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Identifier
Created
Classification
Origin
09BRASILIA660
2009-05-26 10:45:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Brasilia
Cable title:  

BRAZIL: UN Conference on Development Impact of Crisis

Tags:   EFIN  ECON  EAID  UNGA  BR 
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VZCZCXRO2597
RR RUEHRG
DE RUEHBR #0660/01 1461045
ZNR UUUUU ZZH
R 261045Z MAY 09
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 4363
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 7773
RUEHSO/AMCONSUL SAO PAULO 4100
RUEHRG/AMCONSUL RECIFE 9569
RUEATRS/DEPT OF TREASURY WASHDC
						UNCLAS SECTION 01 OF 02 BRASILIA 000660 

SENSITIVE BUT UNCLASSIFIED
SIPDIS

STATE FOR WHA/BSC, WHA/EPSC, EEB/ODF MONAHAN/SIEMER, IO/EDA BALLARD
TREASURY FOR LUYEN TRAN

E.O. 12958: N/A
TAGS: EFIN ECON EAID UNGA BR
SUBJECT: BRAZIL: UN Conference on Development Impact of Crisis

REF: STATE 507892



1. (SBU) Summary: GOB interlocutors agree the current outcome
document drafted by the President of the UN General Assembly (PGA)
is not a helpful way forward in a discussion of the impact of the
global crisis on the developing world. Brazil wants a
consensus-based document that complements and reinforces the G20 and
other relevant processes such as the IMF/World Bank, rather than one
that conflicts with these mechanisms or that establishes new UN
bodies. The GOB approach will be to continue to work within the G77
and directly with the PGA, in hopes of steering the process in a
more constructive direction, rather than by openly objecting to the
outcome document. As of 5/22, the head of the Brazilian delegation
to the June 1-3 conference will be G20 Sherpa Ambassador Pedro
Mendonca, Ministry of External Relations (MRE) Undersecretary for
Economic Affairs. END SUMMARY



2. (SBU) Commenting on the version of the outcome document cited in
reftel, Alvaro Vereda, Assistant Secretary for Financial
Organizations at the Finance Ministry indicated that the Finance
Ministry had provided the Ministry of External Relations (MRE)
comments cleared by Finance Minister Mantega on May 20. These
comments were: 1) the outcome document is not forward looking and
inserts the UN into processes GOB wants to keep in the G20; 2) the
document proposes a "charter" that UNGA members could never reach
agreement on and that would not be feasible or effective forum
whereas G20, IMF etc are appropriate; 3) markets would not take
seriously this "idealistic" and "academic" exercise. Vereda
emphasized that Finance does not want to weaken the G20 process or
move the UN to center stage.



3. (SBU) Luis Balduino, Assistant Secretary for Finance and Services
at MRE confirmed that his Ministry is also concerned and agrees the
G20 process needs to remain on-track and any mandate for the UN to
assume that role must be avoided. Vereda noted GOB does not want a
"friendly fire forum." Both Balduino and Vereda indicated, however,
that GOB would not say openly/publicly that GOB does not support the
outcome document, due to the need to manage intra-G77 sensitivities.
GOB is instead engaging within the G77 and directly with the PGA.
According to Balduino, in G77 consultations, GOB has underlined it
wants a consensus document, that Monterrey had been a turning point
and the UN needs to continue to maintain credibility through a
consensus approach. Balduino called the process "delicate," noting
that Brazil understands some developing countries are distressed and
angry at the impact of the crisis on their economies and do not have
another forum to express their views. At the same time, GOB does
not want the conference to focus on blaming other countries or

creating new conflicting mechanisms. The most helpful outcome, in
GOB view, would be an document that echoes and affirms support for
G20 outcomes (though Balduino thought that some G77 members would be
unlikely to agree to specifically mention the G20, he thought G20
themes like supporting IMF reform, acknowledging the importance of
access to trade financing, etc, were possible for the G77 to
support). He added that if USG emphasizes that it supports not only
aid/assistance but also reform, this helps make clear to the G77
that developed countries are not resisting reform, but rather want
that reform to take place in the appropriate forum.



4. (SBU) Balduino stated GOB has been emphasizing to the PGA that
this conference is an important opportunity for the UN to "show it
can be useful," and that PGA risks squandering that opportunity
through his divisive approach and attempts to put himself personally
center-stage in managing the global response to the crisis. He said
PGA is beginning to understand, in that the latest version of the
outcome document (version MRE had as of evening of 5/21) was
somewhat improved "up to paragraph 40 or so," although the actual
concrete proposals remain "the main problem," citing as examples the
nine ministerials the PGA proposes to chair, the establishment of a
Economic Council that GOB believes would complicate UNSC reform and
would in any case bog down in arguments over who should be members,
and tasking the UN to identify trade barriers, which is an issue for
the WTO, not the UN.



5. (SBU) Initially, President Lula had intended to attend this
conference. Both Finance and MRE confirmed that neither he nor
their Ministers will attend. As of 5/22, GOB planned to send MRE
U/S for Economic Affairs Pedro Mendonca, Brazil's G20 Sherpa, to
head the delegation. This choice is intended as a GOB "signal" that
Brazil considers the G20 to be the forum with the lead on response
to the global economic crisis and its impact. GOB is interested in
who will lead the USG delegation.



6. (SBU) Comment: While Brazil had strongly supported the idea of
this conference initially, GOB is not happy with the process
unfolding. GOB's main concern, repeatedly expressed, is that the
conference should in no way undermine the G20 process, which GOB

BRASILIA 00000660 002 OF 002


believes is the most effective forum to ensure credible, feasible
results in addressing the global economic crisis. GOB supports a
forum where developing countries can explain the impact of the
crisis on their economies and that reinforces support for reforms
and responses taking place in other, more appropriate, fora. End
Comment.

KUBISKE