Brazil Glows, But Can it Grow?
Dec 8, 2003
The country has regained the confidence of investors
and but Brazil still faces considerable challenges that the markets
have ignored for too long.
The adoration may not last, but for the moment, Brazil is the
darling of emerging market investors. A year ago, the country
seemed teetering on the brink default and about to follow Argentina
into a catastrophic economic collapse.
Today Brazil is one of the few economic bright spots on the
continent. In Argentina, the government continues to antagonize
creditors holding its nearly worthless paper. President Néstor
Kirchner seems more concerned with boosting his popularity with
populist measures than in dealing with his country’s shattered
finances. Colombia’s President Alvaro Uribe is floundering after a
defeat on a referendum that was intended to approve policies he
said were needed to avoid a fiscal crisis. In the Dominican
Republic, the government’s attempts to renegotiate an agreement
with the International Monetary Fund have been thwarted by strikes
and riots. President Hipólito Mejía’s bid to win reelection next
year now looks close to impossible.
Things have turned out much better in Brazil than many people
expected because...
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