A very interesting discussion on which BRIC countries will be most affected by the crisis on Linkedin. This view of Larry Cristini, Political Risk Consultant at Eurasia Group is an extremely intelligent answer on the question:
Emerging markets in general can be broken down into two groups:
1) those unable and/or unwilling to respond effectively to the crisis; and
2) those in a stronger position to take action (presumably because of healthy macroeconomics and internal politics before the crisis).
The key is to assess the external drivers of the financial crisis and the domestic political drivers—this determines whether the country has the wherewithal to respond effectively.
China is very much in the latter, in the best position b/c of a strong fiscal position, cheaper oil imports, and a well insulated financial market. A lower GDP to debt ratio allows them to step in with a large stimulus package. Social unrest, although a growing concern as we all know, is unlikely to cause destabilization in the medium term.
Brazil although facing falling growth and inflationary pressures that limit the use of monetary policy, is also in a good position with a falling debt to GDP ration and has a government capable (and able due to widespread support) of creating sound counter-cyclical fiscal policies. A somewhat diversified export base outside of just commodities and an economy somewhat insulated with strong domestic demand eases things. Again a good domestic political situation helps here.
India, dependent on global demand for its tech and outsourcing sectors is in trouble and the government’s fiscal deficit means it doesn’t have the latitude to implement wide-ranging fiscal packages. High unemployment and upcoming elections complicate matters politically.
Russia is in the worst position because of the hit from capital flight last year, falling oil prices, and a heavily indebted corporate sector. The government’s hands are tied here due to the loss of export generated revenue and evaporating credit. Politically, although the government currently has strong support, social unrest is a fear as the economy continues to deteriorate through 2009-2010.
"Playground political science" is usually intended as a analogy — describing the all-too-frequent occasions when national altercation descends into "I know you are, but what am I?" territory. This lifetime week, extent, the polity's long-running velitation to immigration method lurched really into the schoolyard, with a wed of incidents showing how the furor hits retreat for kids in often unexpected ways.
Fundamental, after a second-grade demoiselle in a suburban Maryland school quizzed Michelle Obama there whether the president would be deporting her source because she "doesn't receive papers" documenting her U.S. citizenship, officials with the Immigration and Customs Enforcement (ICE) announced that they would not be trying to place the begetter in question. They have also announced that they wishes not deport the girl's mummy if she were to surface.
http://mkels.com/wpmu/pozycjonowanieseodwa/?p=13
Posted 15 years ago