US embassy cable - 05BRASILIA1993

UNCLAS BRASILIA 001993 
 
SIPDIS 
 
SENSITIVE 
 
OFFICIAL-INFORMAL FROM CHARGE FOR TREASURY A/S QUARLES 
 
E.O. 12958: N/A 
TAGS: AMGT, EFIN 
SUBJECT: OFFICIAL-INFORMAL:  ELIMINATION OF LATIN AMERICA 
REGIONAL TREASURY ATTACHE POSITION 
 
REF:  Buenos Aires 1806 
 
1.  (SBU) Post has learned that as part of a world-wide cost- 
cutting move, as of October 1 Treasury intends to eliminate 
the Regional Attache position based in Buenos Aires.  That 
slot covers not only Argentina, but with the position 
incumbent frequently traveling to Brasilia, Sao Paulo, and 
Rio de Janeiro and other key South American posts.  Given 
the importance of emerging economies like Brazil in the 
international financial markets, Charge requests that 
Treasury headquarters revisit this decision. 
 
2.  (U)  Currently, the Brazilian economy is at a high 
point, with growth returning, exports booming, and inflation 
in check.  However, three short years ago this was not the 
case.  The incoming Lula Administration had raised interest 
rates to sky-high levels in an attempt to stem capital 
flight.  While we do not foresee a return to this precarious 
state-of-affairs in the short-term, when dealing with Brazil 
(as is the case with other emerging markets) its best to 
keep assets handy.  One important assets it is the presence 
of the Regional Attache in Buenos Aires.  In the event of a 
sudden crisis, having the Treasury attach on hand to help 
us grapple with the situation would be essential.  Seeking 
to deal with matters solely from Washington would be 
immeasurably more difficult. 
 
3.  (U)  We know that budgets are tight and in future fiscal 
years will become increasingly so.  However, in our view the 
investment made in maintaining the Attache position in 
Buenos Aires would be money well spent.  Regards. 
 
Linehan