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Emerging markets must play a role in global economic stability
26/09/2011
Brazil's finance minister has said that advanced nations are no longer capable of managing global economic stability on their own, and that emerging nations must and will play a major role in the global situation.
Addressing the International Monetary Fund (IMF) on Saturday, Guido Mantega said that the current situation of the global economy is similar to that seen in 2008, prior to the recession.
He pointed out that if policymakers in the USA and eurozone do not come up with a strong response, then "the best scenario for these countries seems to be prolonged stagnation with high unemployment". Crucially, he pointed out, however, "emerging markets and developing countries are responsible for the larger share of world economy growth" and they will have a very important role to play.
Mantega explained, "A revival of global demand will depend to a large extent on these countries."
He said that the "persistently loose" monetary powers of developed nations such as the USA, Japan and some European countries, have been painful thorns in the side of emerging markets and caused Brazil's currency to rise dramatically in the past year. He warned that a strong policy hand was needed in Europe in order to ensure that "their actions stop contagion beyond the euro periphery," referring to Greece, Ireland and Portugal.
Addressing the International Monetary Fund (IMF) on Saturday, Guido Mantega said that the current situation of the global economy is similar to that seen in 2008, prior to the recession.
He pointed out that if policymakers in the USA and eurozone do not come up with a strong response, then "the best scenario for these countries seems to be prolonged stagnation with high unemployment". Crucially, he pointed out, however, "emerging markets and developing countries are responsible for the larger share of world economy growth" and they will have a very important role to play.
Mantega explained, "A revival of global demand will depend to a large extent on these countries."
He said that the "persistently loose" monetary powers of developed nations such as the USA, Japan and some European countries, have been painful thorns in the side of emerging markets and caused Brazil's currency to rise dramatically in the past year. He warned that a strong policy hand was needed in Europe in order to ensure that "their actions stop contagion beyond the euro periphery," referring to Greece, Ireland and Portugal.
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