Rescuing Brazil: Why the US Has Big $Takes for US Investors and Traders, Brazil Is an Economic Domino That Can't Be Allowed to Fall. the US May Give Assistance

By Howard LaFranchi, writer of The Christian Science Monitor | The Christian Science Monitor, October 26, 1998 | Go to article overview

Rescuing Brazil: Why the US Has Big $Takes for US Investors and Traders, Brazil Is an Economic Domino That Can't Be Allowed to Fall. the US May Give Assistance


Howard LaFranchi, writer of The Christian Science Monitor, The Christian Science Monitor


Mention Brazil, and many Americans think Amazon River, the girl from Ipanema, and Ronaldinho, the boy from the soccer field.

But, in the wake of the global economic crisis, many also now know that the United States has become a major player in Brazil's economy - and is expected soon to become a major financial supporter to protect Brazil from the worst effects of that crisis.

The future of this giant market of 160 million people means more to the economic well-being of the US than does Malaysia, Indonesia, or even Russia, which has an economy about half that of Brazil. Such facts explain reports that Washington is planning several billion dollars in aid or loan guarantees as part of an international program that could reach $30 billion. With many economists saying much of the world's economic expansion over the coming decades will be in large markets like Brazil, the stakes for the US are clear. More than 211,000 high-skilled US jobs are supported by exports to Brazil, according to the American Chamber of Commerce in Sao Paulo. In trade, investment, and other economic activities, Brazil is the US's largest developing-world partner, even surpassing Mexico in many categories. Three years ago President Clinton designated $20 billion in US funds to rescue Mexico's economy. Jose Pena Garcia, chief economist with BankBoston in Sao Paulo, says all he heard during a recent trip to New York was how, if Brazil became the next domino to fall to the international financial crisis, the US would hear this crash much more quickly and loudly. BankBoston is an example of a US services company with high stakes in Brazil. About 20 percent of the bank's revenues come out of Latin America, with Brazil representing about half of that. The bank has doubled its branches in Brazil since 1994, and now has 3,800 Brazilian employees. A financial collapse in Brazil would send giant shock waves through BankBoston, as in much of the US banking sector, which generally has a much broader exposure in Latin America than in Asia or Russia. Like many economists, Mr. Pena is pretty confident this is not going to happen now - as long as Brazil "does its homework." That means quickly implementing fiscal reforms to signal to the world that Brazil is serious about cutting a deficit that is nearly 8 percent of gross domestic product. President Fernando Henrique Cardoso is expected to announce this week the measures he wants Brazil to take to trim about $25 billion in spending. With even some of Cardoso's congressional allies already showing resistance, the big question now is whether Brazil's legislature and the big-spending states will go along. "We may have very little or no growth next year, but interest rates {now at a whopping 50 percent} should be falling by the end of the year," says Pena. "Something over 400 of the top 500 US companies have some kind of operations in Brazil," says Pena, "so that gives an idea of why interest in Brazil is not limited to a few international economists. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Rescuing Brazil: Why the US Has Big $Takes for US Investors and Traders, Brazil Is an Economic Domino That Can't Be Allowed to Fall. the US May Give Assistance
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.