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