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.
http://i50.tinypic.com/2zsrwbo.jpgimg] Mercedes GP has announced the signing of a long term agreement with PETRONAS which will see the Malaysian national oil and gas company become the title partner to the new Silver Arrows works team.
From 2010, the new team will compete in the FIA Formula One World Championship as the Mercedes GP PETRONAS Formula One Team and will carry the distinctive PETRONAS branding across the car and team liveries.
Leveraging Mercedes-Benz’s rich motorsport heritage and the long-standing involvement of PETRONAS in Formula One, the new title partnership also paves the way for future collaborations between the two companies. For PETRONAS, the partnership will enable the oil and gas giant to generate sustainable business growth, particularly in their downstream lubricants market, through the strategic partnership and business alliance with Mercedes-Benz, one of the most prestigious global automotive brands.
The Mercedes GP PETRONAS Formula One Team’s challenger for 2010 will make its track debut in its new livery at Valencia on 1 February 2010 for the first of the pre-season tests ahead of the 2010 Formula One season.
PETRONAS will continue to be the title sponsor formula 21 of the PETRONAS Malaysian Grand Prix, scheduled to be the third race of the new season, which will take place at the Sepang International Circuit on 4 April 2010.
“We are very pleased to begin our long-term partnership with our new title partner PETRONAS,” said Norbert Haug, Vice-President of Mercedes-Benz Motorsport.
“Daimler, our premium brand Mercedes-Benz and PETRONAS will work together both on and off the track and I am sure that everybody involved will guarantee their absolute dedication to success,” he continued.
“PETRONAS’ home base in Kuala Lumpur is located in the middle of a fast-growing region for the automotive industry which makes this new partnership even more valuable. Within the limits of the new Formula One resource restrictions, the Mercedes GP PETRONAS Formula One Team will be well positioned to achieve our goals. We will all strive to present efficient success in the future knowing at the same time that the new Formula One season with some fundamental rule changes will be a particularly challenging one,” he added.
“Everyone at Mercedes GP is delighted to confirm our long-term agreement with PETRONAS formula 21 and we look forward to working closely with our new partner in the future,” said Ross Brawn, Team Principal of the Mercedes GP PETRONAS Formula One Team.
“The collaboration of the premium automotive brand Mercedes-Benz and a company as prestigious as PETRONAS gives our team a fantastic base from which to achieve our ambitions of competing at the top level of Formula One and building on the success of 2009 which saw the team achieve the Constructors’ and Drivers’ Championships. Our plans for the new season are progressing well, as is the development of our 2010 challenger, and we look forward to seeing the car run in the new Silver Arrows and PETRONAS livery at the Valencia test in February,” added Brawn.
source: Mercedes GP
Posted 16 years ago