What does the future hold for emerging economies like Brazil or Argentina?
Brazil and Argentina are very different. Brazil has a set of much better economic policies. The current government and its predecessor really sought economic stability above all else. They wanted to escape from the crisis-driven cycle that plagues so many Latin American economies. So I think that the Brazilian economy will remain a very popular target for foreign investment, and it will go through this downturn and then afterwards continue to grow at a moderate but stable pace. The Argentine economy is undoubtedly suffering because it was already hard enough to get credit here before the crisis, and during a crisis it’s the riskiest economies that suffer the most. The Argentine economy depends on Brazil and Europe and China for demand for its exports, and those countries will suffer downturns as well, so there’s no doubt that there will be serious effects here. What will make things worse is that this government has not done anything to prepare for a rainy day.
