If you can beat 'em, then also join 'em
The IMF wants more money to act as lender of last resort, and Brazil is stepping up:
Brazil, an emerging economy, said on Monday that it will spend 10 billion dollars (6.8 billion euros) on buying IMF bonds to boost the fund's power to help countries through the global crisis.This is yet another example of Lula's concerted effort to elevate Brazil's global presence, hard on the heels of his successful bid for the Olympics.It was the first time that Brazil, Latin America's economic giant, has lent money to the 186-nation International Monetary Fund.
"We have gone from being debtors to creditors," Brazilian Finance Minister Guido Mantega said ahead of IMF and World Bank annual meetings which begin Tuesday.
"This contribution is an expression of Brazil willingness to play a greater role in the fund and support the institution and its objectives," he said.
Brazil paid off its own IMF debt a few years ago, and now will try to use its money as leverage to influence IMF loan policies.
6 comments:
Here goes a different, and very argentinean view, of Brazil. Some points are interesting nonetheless:
http://blogs.lanacion.com.ar/ciencia-maldita/international-geographic/no-somos-brasil-por-suerte/
Interesting piece. I have long wondered why Brazil is considered this economic miracle, when its growth rates have been very modest. Argentina's GDP growth rates have been roughly double Brazil's for the last 5 years. I think it has more to do with politics than economics.
In the last few years Brazil has been growing at a 5% clip with about a 4% inflation rate and a steadily growing investment capacity. Argentina has been growing at about 7-8% with 20+% inflation with a shrinking investment capacity, because the country is largely closed to capital markets. You don't need a Ph.D. in Economics to figure out which country is better positioned. (Looking at GDP growth in isolation reveals little).
What I like about Brazilians is that they seem to be very introspective and focused on "fixing" their country, unlike Argentines who seem to oscilate between fatalism and delusions of grandeur.
I have long wondered why Brazil is considered this economic miracle, when its growth rates have been very modest.
I don't think Brazil is necessarily regarded as an economic miracle. The more important point is that, given that Brazil is the fifth most populous country in the world, its newfound economic stability and sustained growth translate into gradually increasing power in the world.
Here is the annual growth in the UNDP Human Development Index score, from 2000-2007. It shows Brazil is LAST in Latin America! This is a statistic that matters.
Guatemala .85
Honduras .84
Venezuela .74
Peru .63
Colombia .63
Bolivia .62
Mexico/Panama .50
Costa Rica .48
Chile .48
Uruguay .47
Brazil .41
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