International financial negotiations and political actors: the perspective of the International Monetary Fund (IMF) on the disruption of IMF-Brazilian relations during the administration of Juscelino Kubitschek (1957-1959)

Abstract

A key moment in the history of IMF-Brazilian relations took place during the Juscelino Kubitschek government (1956-1961). The International Monetary Fund (IMF) played a crucial role for Kubitschek's Brazil as foreign investments were of utmost importance for the president's economic program: the so-called Target's Plan (Plano de Metas). In 1958, Brazil and the IMF signed a stand-by agreement, which provided funds to Brazil conditioned to the implementation of a stabilization program. Facing the dilemma of obtaining external resources for countering the imbalance of the country's balance of payments, or implementing policies that could compromise the goals of his administration, Kubitschek chose the latter option, breaking relations with the IMF in June 1959. Despite its great historical relevance, scholars have rarely looked into the causes of the breakup between Brazil and the IMF, and the few who did it produced studies based on fragile empirical basis. In order to comprehend this important issue, a deep analysis of the IMF-Brazilian relations in the late 1950s is fundamental. Moreover, given that Washington had (and, to a lesser degree, still has) a determining role in policymaking in the IMF, it is also important to analyze how the US-Brazilian economic relations evolved at the time, as well as to what extent Washington influenced the Fund's decisions regarding Kubitschek's Brazil. By looking into IMF and US official sources (both private and public), this project seeks to comprehend the reasons that encouraged the Kubitschek government to breakup negotiations with the Fund in 1959, mainly taking the IMF and the US perspectives into account. This may contribute to studies focused on analyzing broader (and contemporary) issues regarding international financial negotiations, such as economic multilateralism and relations between IMF, the US, and developing countries, especially in Latin America. (AU)