Ability to Export Raw Material Helps Brazil’s Faster Recovery, Says IMF

Iron ore Brazil Brazil and other emerging economies should recover more rapidly than developing nations from the global financial crisis. This opinion was presented in the paper from the International Monetary Fund (IMF) entitled "Crisis Averted – What's Next?", released this October 23 in São Paulo, Brazil, by Nicolas Eyzaguirre, the director of the Western Hemisphere Department at the Fund.

"The recovery of the industrialized economies will be slow and painful," said Eyzaguirre. "The good news is that, probably, emerging economies should grow rapidly, as is the case, for example, with China and Brazil. This brings enormous opportunities, but also challenges by great economies, with many expectations," he said.

According to the FMI's projections, after the 2.5% retraction in 2009, Latin America and the Caribbean should grow around 3% next year. "The question, now that the worst of the storm has blown over, is how to adjust to the new reality of a global economy that is less dynamic and provide conditions for countries to grow and reduce poverty," said Eyzaguirre.

The report points out that the perspective for the short term is more favorable to exporters of raw materials, like Brazil, due to the continued recovery of prices of these products.

However, economies that depend on funds from abroad and on tourism, like those in Central America and the Caribbean, are at a disadvantage at this moment, as these factors are strongly connected to the level of employment in the United States and in other developed economies, which should recover slowly.

"The United States should not manage to leave the recession exclusively based on their domestic demand. They will need to export much to solve their current account problem," said the IMF director. Brazil, Chile, Colombia and Peru were mentioned as examples of economies that should recover faster than the United States.

According to the report, countries that were better prepared and could issue fiscal and monetary measures to boost their economies will now have to start thinking on how and when to revert this. The study suggests that, in general, countries should consider reverting their fiscal measures before contracting their economic policies.

The study also shows two main challenges for the future of Latin America and the Caribbean. "In the medium term, policies will need to adjust to a new global environment of lower growth. A return to pre-crisis rates of growth of output, and of commodity export prices, is unlikely.

"With government revenue therefore growing more slowly, public spending will need to be more focused, particularly in countries with higher debt. More broadly, policies will need to work harder to provide conditions for growth and poverty alleviation," says the report.

The report adds that countries will have to further their economic reforms to make their economies more resistant to future crises. This includes greater exchange rate flexibility, better fiscal policies and changes in regulation and supervision of the financial sector, incorporating the lessons learnt in other regions of the world.

Anba

Tags:

  • Show Comments (1)

  • Yovanna Guzman

    Exporting raw materials
    The Global crisis that the world is suffering today has left every country a great impact and effects particularly on the aspect of economy. Brazil must outrun the other nation and must try to survive on its own. Brazil has the capabilities and resources to export materials that can serve as their countries source of income. Each country today must learn to try to develop and depend on their own capabilities to produce products where raw materials ca n be found on their own place.

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Toyota Cites Brazil as Example to Be Copied in the US

 Jim Press, president of Toyota Motor North America, today said that despite recent headlines, ...

Laughing with Tantan

Tantan is not your typical clown. Like his colleagues, he dresses funny, paints his ...

Brazil’s First Brother Pans Lula and Vows Not to Vote for Him

Jackson Inácio da Silva, one of the Brazilian president’s brothers, has already declared his ...

UN Forces Commander Who Died in Haiti Is Back in Brazil

The body of Brazilian General Urano Teixeira da Matta Bacellar, who commanded the United ...

Women Head Half of Brazil’s Small Businesses

Brazilian women are beginning to discover a new field of opportunities. They currently head ...

Brazil Opens Fair Season with LatAm’s Largest Shoe and Fashion Trade Show

Francal, the largest fair of shoes, fashion accessories, machinery and components of Latin America, ...

European Dairy Gives Way to Brazilian Goods in Middle East

Dairy product exports from Brazil to the countries in the League of Arab States ...

US Decries Torture, Child Labor and Political Murder by Police in Brazil

The US issued earlier this month its reports of human rights practices for 2007 ...

Brazil’s Labor Leaders Lose Their First Tug-of-War with President Rousseff

It was a major legislative victory for Dilma Rousseff, new Brazilian president. Brazil’s Lower ...

An Arab Language Primer for Brazilian Kids

Every Arab child should know the meaning of the words "buchar", "buza" and "lêr-rebe", ...