Press Release: Statement by IMF Fiscal Affairs Department Director Teresa Ter-Minassian on Brazil's Three-Year Public Investment Pilot Program

IMF News, February 22, 2005

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Canonical URL: Press Release: Statement by IMF Fiscal Affairs Department Director Teresa Ter-Minassian on Brazil's Three-Year Public Investment Pilot Program

Over the last few months, the Brazilian authorities have discussed with staff of the International Monetary Fund, the World Bank, and the Inter-American Development Bank, options for improving the quality and efficiency of public investment in Brazil, within an overall framework of fiscal and macroeconomic sustainability.
The Brazilian authorities have proposed a pilot program for selected public investment to provide additional financial resources for infrastructure and other public investment projects that have potentially strong macroeconomic and fiscal payoffs over the medium term, consistent with a sound and sustainable fiscal stance.

The pilot program will provide additional financial resources, equivalent to about US$1 billion a year over three years (2005-2007).
The pilot program does not entail changes in how fiscal outturns are computed, nor does it imply the exclusion of specific expenditures from the fiscal primary balance.
Full budgetary funding of the projects will be linked to implementation of the improved procedures.

Public investment projects included in the pilot program have been identified by the Brazilian government through a strengthened selection process.
Projects will be subject to improved procedures for implementation and monitoring.
Linking funding to improved procedures is intended to increase the likelihood that the investments will be completed on schedule.
The Brazilian authorities intend to evaluate the pilot at the end of 2005, to learn from the experience with the new procedures, and to progressively extend them to other public investment.

The staff of the IMF welcomes the progress made by the Brazilian authorities in advancing their pilot program for public investment.
The staff shares the view that the program is an important first step toward strengthening existing systems of appraisal, selection, implementation and monitoring of public investments, with the aim of improving the quality and efficiency of the budget.
The staff welcomes the authorities' intention to publish the pilot program reports.
The staff looks forward to a continuing dialogue with the authorities, in cooperation with the World Bank and the IDB, regarding further actions to strengthen public investment in Brazil.

Additional financial resources: US$1 billion a year over three years (2005-2007).
Pilot evaluation: end of 2005.
Press Release No.: 05/38
Date: February 22, 2005

International Monetary Fund