Protests mar start of IDB forum in Brazil

by Allen Clendenning
Demonstrators opposed to the lending practices of Latin America's biggest development bank clashed with police Monday in protests that marred the start of the bank's annual meeting. As many as 40 people were hurt.

The protests erupted just as senior finance officials from 47 nations opened the event, with Bolivian President Evo Morales calling for the Inter-American Development Bank to forgive his nation's US$1.6 billion (euro1.3 billion) IDB debt as part of a relief package that would also help Guyana, Haiti, Honduras and Nicaragua.

Several hundred protesters -- armed with handguns, gasoline bombs, sticks and stones -- vandalized the reception area of a major Brazilian utility that has received funding from the bank, said Tatiana Resende, a spokeswoman for the company, Companhia Energetica de Minas Gerais.


Photos showed protesters breaking plate glass windows to enter the reception area.

The hour-long protest against the bank's role in promoting privatizations and in financing infrastructure projects such as dams took place about five kilometers (three miles) from the elegant state government arts palace complex where the IDB was meeting.

Protest organizers said police fired rubber bullets, sprayed tear gas and set off stun grenades.

Rensende said four security guards were treated for minor injuries and local news media said four police officers were hurt.

Joceli Andrioli, a spokeswoman for the Movement of Dam-Affected People, said 17 protesters were treated at hospitals and 20 others suffered lighter injuries. Nine were detained, she said.

Andrioli complained that IDB funding "has prompted privization of water and natural resources. This only increases poverty in Brazil and enriches bankers and multinational companies."

Local news media said two police officers and a photographer were hurt in a separate clash about a kilometer (mile) from the palace.

The IDB event lasts through Wednesday, and Morales and Honduras' newly elected President Manuel Zelaya were lobbying for the bank to forgive as much as US$3.5 billion (euro2.9 billion) owed by the five nations.

Morales said debt relief is key to attacking poverty among Bolivia's 8.5 million people.

"It's not acceptable that 67 percent of the people in my country are living in poverty, and that 45 percent are extremely poor, living on less than US$1 a day," Morales said.

Morales also said Bolivia is in the midst of a "democratic revolution without arms" in which multinational companies will be transformed from owners into partners of the Bolivian state.

And he repeatedly said that centuries of "looting" Bolivia's natural resources had maintained a deep divide between the nation's rich and poor.

"We want to get rid of the exclusion and the marginalization," Morales said.

But the debt relief package faces an obstacle because Latin America's two biggest powerhouses -- Brazil and Mexico -- are balking at supporting the write-off unless richer nations foot the bill.

The bank is owned by its member countries, mainly from the Western Hemisphere, but also including European nations, plus Japan, Israel and South Korea.

Brazil is to head a special committee charged with coming up with a financing solution for the five-nation debt relief package by the end of the year, said Clay Lowery, the U.S. Treasury Department's assistant secretary for international affairs.

Lowery said the U.S. delegation is proposing a complicated structured-financing arrangement that would relieve debt while not hurting the IDB's balance sheet. If that method is adopted, the debt would not be paid by the rich nations.

"We believe the IDB should play its part in easing the debt burden on the poorest countries, expanding the resources they have available to invest in health and education," Lowery said.

Another prickly topic emerged on forum's sidelines: Bolivia's plan to nationalize its vast natural gas resources and how that will affect Petroleo Brasileiro SA, Brazil's state-owned petroleum company, a major Bolivian gas producer.

Morales campaigned to wring more profits from the foreign gas producers and Petrobras is a major producer in Bolivia, where production was privatized in the 1990s. Brazil is Bolivia's biggest gas client.

The Bolivian leader is seeking to convince Brazil to increase investment in Bolivia's gas production and accept higher prices. But negotiations have stalled over Morales' vaguely defined plan to nationalize gas resources.

Morales met Monday with Marco Aurelio Garcia, the special adviser for international affairs of President Luiz Inacio Lula da Silva. Garcia said the two sides agreed to relaunch talks, but he did not offer details.

Delegates at the IDB meeting, one of Latin America's most important annual economic forums, will discuss how the bank can use loans to improve the region's crumbling infrastructure, boost economies, promote regional integration and improve living standards.