Lula should announce an increase in Brazil's contribution to the Mercosur fund

President Luiz Inácio Lula da Silva (PT) is expected to announce an increase in the Brazilian contribution to Focem (Mercosur Structural Convergence Fund), the bloc's main financial mechanism aimed at reducing asymmetries between member countries.

The announcement should be made at the 64th Mercosur Summit, which will take place next Tuesday (30), in Asunción, Paraguay.

According to Itamaraty, the announcement will be made officially by the president and the Minister of Foreign Affairs. The values were not revealed.

Created in 2004, Focem aims to finance infrastructure and development projects in the bloc's countries, especially in nations with smaller economies, such as Paraguay and Uruguay.

Throughout the first phase, the fund had around US$1 billion in investments.

According to the Ministry of Foreign Affairs, among the results already financed by Focem are approximately 1 thousand km of highways, 680 km of railways, 750 km of power transmission lines, in addition to sanitation works, schools, housing and laboratories in member countries.

Currently, Focem I still has around US$200 million in resources, which are being allocated to new projects in progress.

The amount still in the fund will be used in projects that are in the bloc's approval phase.

The new proposal under discussion envisages the creation of Focem II, with the participation of Bolivia as a full member of the bloc.

The measure must be accompanied by an increase in the Brazilian contribution, currently set at US$70 million per year over ten years, which corresponds to around 70% of the total budget for the first phase of the fund.

Source: CNN