Brazil Glows, But Can it Grow?
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
countrys shattered finances. Colombias 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 governments
attempts to renegotiate an agreement with the International
Monetary Fund have been thwarted by strikes and riots.
President Hipólito Mejías bid to win
reelection next year now looks close to impossible. Things have
turned out much better in Brazil than many people expected
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