Class 8 Flashcards
1
Q
Why was the Washington Consensus so bad for Brazil since the 90’s? (3)
A
- Brazilian companies didn’t have enough time to prepare to compete with foreign companies
- Brazilian governments had never offered any advantages or financing for companies to prepare for the new phase of competition with foreign companies.
- As consequence, there was a wave of privatizations of state-owned companies, through the process of merger and acquisition as well as the closure of several national factories in the face of competition.
2
Q
Why did the economic model adopted by almost all countries failed during the 70’s /80’s? (3)
A
- In the 50’s/60’s many countries had adopted the model of substitution of imports.
- The big issue was that, in many cases, the machines and supplies needed to be imported and paid for. But to pay for the imports it was necessary to export commodities.
- Few countries had access to financing but these debts had generated the foreign debt crisis of the 80’s.
3
Q
Why did we Brazil accept the imposition of the “Washington Consensus”? (4)
A
- Loans offered by World Bank
- Good favors / conditions when negotiating with IMF
- World Trade Organization created advantages for the countries that followed the recommendations
- Media complained that Brazilian products were expensive and of inferior quality + Foreign companies said we weren’t competitive.
4
Q
Why is important to geopolitically reorder the economical blocks? (3)
A
- The intraregional trade inside Latin America is very weak.
- Bilateral agreements give the impression that good chances are created, but more important would be to negotiate with other large blocks.
- This is an enormous disadvantage of L.A. and even Mercosur is very weak.
5
Q
Why does Brazil participate so little in international trade? (3)
A
- Our products are expensive for buyers outside Brazil because the Real was highly valued until recently.
- Brazil is only competitive in commodities
- Brazil has few trade agreements with other countries.
- The domestic market within Latin America / South America is very weak.
