The truth about the failure of "argentinian miracle"


Graphs show correlation in January 2002 Argentine and Brazilian stock markets and the lack of it between the Argentine and Russian figures. This is understandable: the economic relations with Brazil and Argentina significantly stronger (than Russia).

However, in February the Brazilian stock quotes are rising while maintaining the downward trend for the values of the Argentine index. Significant positive correlation between the quotations of debt of the three countries in this period can be found. Quite the contrary. This may be due to the flow of capital from Argentina to the Brazilian and Russian markets.

Graphs visually confirm the thesis that the deterioration of economic indicators in Brazil in late 2001 - early 2002, not so much to develop the crisis. The country has taken appropriate action in a timely manner: rationalized consumption, reduce budget costs. Brazil's economy, healthy in its basis, has a strong potential to counter adverse trends. Suffice it to say that the amount of foreign exchange reserves increased in the first two months of this year from $ 35.8 billion to $ 36.2 billion Inflation is less than 8% at the annual level.

The course's real stable. Basic interbank rate was 18.75% and regularly reduced. However, no significant improvement in 2002, most likely, will not, as the country is an election of the new president, and investors will be cautious. How did the Argentine crisis of the Russian financial markets? Russia will most likely received a small temporary gains from capital flight from Argentina. However, with the normalization of the situation in this part of the country departed short-term capital can return to it. Experts estimate that as a result of the Argentine events can also temporarily improve conditions for Russian exports of oil and grain.

The positive effects of the crisis

Results visiting Argentina in March 2002, the IMF mission suggests that part of the way to resolve the crisis has passed, and in a few months, the country can get a long-awaited loans. To do this, the government needs to take additional steps, including - to increase the confidence of investors (unfreezing of bank deposits, the lifting of restrictions on the transfer of profits and interest, etc.), tightening of budgetary performance, guarantee social protection for the poorest segments of the population.

Argentine crisis (as well as Russian, and many others) has a positive effect. This effect is, above all, to improve the competitiveness of exports following the devaluation of the national currency, in a more strict control over budget expenditures in the center and the provinces, in the creation of other conditions necessary for economic recovery. Have generally agreed that the Argentine crisis, because of its duration and the adoption of preventive measures by economic agents, has focal character. They were only affected by the nearest neighbors of Argentina, especially, Uruguay and Brazil. Normalization of the situation will have a positive impact on the economy of these countries and the whole region.