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Brazil actually did pay enough debt (to the tone of federal superavits of 4.5%/year) to get rid of IMF. The part of the federal budget dedicated to pay debt is still monstrous.

Indeed, they might be following different policies, but first they had to get the creditors boot out of their neck. And they decided to do it the "creditor-friendly" way.

In any case, in Southern Europe, I think both avenues are closed: "creditor-friendly" = mathematically impossible. "creditor-unfriendly" = disaster consequences (as I bet there will be political will to make any country that follows that path an "example").

by cagatacos on Mon Feb 18th, 2013 at 05:44:21 AM EST
[ Parent ]
OK -but that's why I said "Latin America". The continent as a whole has been showing progress, and of course it's an economic zone.
I must admit that I have not run through the data to make a completely qualified statement, but I would guess that good performances between Latin America countries are somewhat correlated. So the general good performance of the continent explained some of the good performances of individual countries.

Also, while they did have to get the creditors off their necks, the whole of the last 10 years (and a bit) have been spent under a Lula presidency or that of her formet chief of cabinet. Whose inclinations are totally at odds with the EU elites.

So, it feels a bit rich to give the fiscal consolidation in the first year of his presidency credit for the entirety of the performance, and none to a move towards more left-wing policies and lower inequalities (not saying that there are no other factors). Especially since Argentina and Venezuela did quite decently over the period as well.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Mon Feb 18th, 2013 at 08:59:09 AM EST
[ Parent ]
Actually it is worth mentioning that Lula himself has never missed an opportunity to slam the IMF and IMF type policies whenever he has had the chance. I.e.:
Lula... urged Portuguese policymakers to reject any austerity measures.  "The IMF won't resolve Portugal's problems, like it didn't solve Brazil's" he told Portuguese reporters on Monday, making the point that accepting an EU-IMF bailout would results in stricter austerity measures which would hamper growth, according to The Washington Post.

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Mon Feb 18th, 2013 at 10:52:45 AM EST
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They were anti-IMF that is for sure.

But that is not the issue. The issue is how did they get rid of it? They opted for paying. Super-avits of 4.5% year over year.

Brazil's model is not one of "sticking the finger to creditors", au contraire.

I am not saying that it is a good model to follow (I actually think it is an IMPOSSIBLE model to follow).

But in name of getting the history correct (my only point here, nothing more), the Brazilian case is not one of defaulting or anything like that.

by cagatacos on Mon Feb 18th, 2013 at 11:31:01 AM EST
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Yes, but my point is that the claim that "the foundation was laid for very good economic developments in subsequent years" through the IMF programmes is denied by Lula himself. Brazil pushed through despite the IMF programme, not because of it, according to those in charge at the time. Plus of course, as you say, the numbers are very different...

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Mon Feb 18th, 2013 at 12:58:02 PM EST
[ Parent ]


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