International Integration of the Brazilian Economy by Elias C. Grivoyannis

International Integration of the Brazilian Economy by Elias C. Grivoyannis

Author:Elias C. Grivoyannis
Language: eng
Format: epub
ISBN: 9781137462602
Publisher: Palgrave Macmillan US

7.4 Developing Regions’ Performance During the Last Decade

The previous section brought us two main conclusions. The record of LA during 2003–2013 was much better than during the previous two decades. However, when this decade is divided into two sub-decades, it is clear that there is a noticeable worsening of economic conditions in the aftermath of the North-Atlantic crisis, indicating that the Golden Years were behind.

To answer the questions posed in the introduction to this chapter, we must not only look at the data for LA but also compare them with other emerging/developing regions over the past decade. This section compares, therefore, the performance of LAC using the same indicators analyzed previously but this time for four other developing regions. The objective is to analyze if the past decade was good for LAC relative to other regions or if the positive indicators exhibited by the region was only part of a phenomenon that took place in all emerging/developing regions.

Looking only at the data for LAC—as in the last section—would be misleading because we would be missing the bigger picture. Analyzing other developing regions’ performance allows us then to figure out if the last decade was good for all emerging markets and not especially for LA. Additionally, it makes possible to evaluate if LAC underperformed within the group of developing regions.

In this regard, Velasco (2013) has pointed out how the well-known development economist Carlos Diaz-Alejandro remarked in the 1970s that the combination of high commodity prices, low international interest rates, and abundant international liquidity would amount to economic nirvana for developing countries.

This was exactly the conjuncture experienced by the emerging markets during the period 2003–2013. The very low interest rates in the developed countries also allowed the emerging economies to experience lower rates and primarily to benefit from the inflow of capital looking for better returns. Besides, as indicated in Sect. 7.2, commodity prices showed a significant improvement during the decade. Hence, all the elements in the dreamed “nirvana” described by Diaz-Alejandro were present, so that the external context was favorable not only to LAC but also to other emerging/developing regions.

Turning back to the indicators, we found some limitations in the international databases for some of the regions. Specifically, the data on unemployment and poverty ratio were incomplete for some countries. In order to make them comparable between the regions, we weighted the numbers by population in the countries to construct regional averages with available data.

As Fig. 7.4 shows, in terms of economic growth, the analyzed decade was splendid for the emerging countries. In decreasing order, the GDP average growth for the decade was very good in all regions: EDA (8.4%), SSA (6.1%), MENA (5.4%), CIS (5.0%), and LAC (3.9%).

Fig. 7.4GDP growth (2003–2013). (Source: Authors’ elaboration based on data from the IMF)


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