esther dweck chief economist , ministry of planning and
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LAC-EU ECONOMIC FORUM 2013 Globalization, International Trade and the Welfare State at Crossroads: Converging Views in European and Latam countries? Session 2 Real imbalances: trade, industrial development and environmental issues. Esther Dweck - PowerPoint PPT PresentationTRANSCRIPT
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LAC-EU ECONOMIC FORUM 2013
Globalization, International Trade and the Welfare State at Crossroads:
Converging Views in European and Latam countries?
Session 2 Real imbalances: trade, industrial development and
environmental issues
Esther DweckChief Economist, Ministry of Planning and
Professor of Economics, Universidade Federal do Rio de Janeiro
SANTIAGO, 21 – 22 DE ENERO DE 2013
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Fiscal Problem might be a Crisis Problem
International Monetary Fund, World Economic Outlook Database, October 2012
72
4955
41
60 60
16
67
43
74
35
67
44
9
65
20
65
38
105
36
103
82
12
81
26
65
44
Public Sector Gross Debt (% GDP)
2000 2007 2011
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From Private to Public Debt
The Economist, ???
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New Monetary Standard: Dollar Standard
Source: BEA
78
88
98
108
118
128
138
jan/
73de
z/74
nov/
76ou
t/78
set/
80ag
o/82
jul/8
4ju
n/86
mai
/88
abr/
90m
ar/9
2fe
v/94
jan/
96de
z/97
nov/
99ou
t/01
set/
03ag
o/05
jul/0
7ju
n/09
mai
/11
Price-adjusted Broad Dollar Index --Monthly Index
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Global Imbalances
-1500
-1000
-500
0
500
1000
1980 1990 1995 1998 2007 2011
World Current Account Balance - Sellected Countries(US$ Billion)
Brazil China Germany
Japan Mexico Russia
United Kingdom United States SpainSource: IMF
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Global Imbalances
Important argument in UNCTAD TDR 2012 (ch. 4):• There was an important change in strategy chosen by
developed country enterprises :– During the 1990s: productivity growth and output expansion
through investment in innovation – During the 2000: greater emphasis on becoming more
competitive internationally through wage restraints and reduced employment opportunities, combined with attempts to boost profits through financial investments
• This strategy was facilitated by the deregulation of financial markets and greater flexibility of the labour market
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Global Imbalances
-500
-400
-300
-200
-100
0
100
200
300
Current Account in 2011 (US $ billion)
International Monetary Fund, World Economic Outlook Database, October 2012
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Global Imbalances
Source: Un Statistics
-12
-10
-8
-6
-4
-2
0
2
4
6
8
Current Account in 2011 (%GDP)
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Global Imbalances
-300
-200
-100
0
100
200
300
1980 1990 1995 1998 2007 2011
Euro Area Current Account Balance- Sellected Countries(US$ Billion)
Germany France Greece Portugal Spain Italy
Source: IMF
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Global ImbalancesSome authors (e.g. Bibow, 2008 and Blecker, 2011) argument:
• Economic conditions and policies in the surplus makes some sense if interpreted as reflecting “deficient demand” in the global economy
• The real issue is why consumption and investment have been systematically depressed in the surplus countries, relative to their national incomes.
• The core reason why consumption is repressed in most of the surplus countries is the phenomenon of wages lagging behind productivity (von Arnim, 2010; Cripps et al., 2011)
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Global Imbalances
-15
-10
-5
0
5
10
15
Germany current account, government budget, andprivate saving-investment balances as percentages of GDP
General government net lending/borrowingprivate saving-investment balances
Source: IMF
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Global Imbalances
Source: IMF
-15
-10
-5
0
5
10
15
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
US current account, government budget, andprivate saving-investment balances as percentages of GDP
General government net lending/borrowing
private saving-investment balances
Current account balance
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Global Imbalances
Source: Blecker, 2011
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Global Imbalances
“the object of the new system must be to require the chief initiative from the creditors countries”
“nothing is more certain than that he movement of capital funds must be regulated; - which in itself will involve far-reaching departures from laissez faire arrangements”
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New Monetary Standard: Dollar Standard
Source: BEA
78
88
98
108
118
128
138
jan/
73de
z/74
nov/
76ou
t/78
set/
80ag
o/82
jul/8
4ju
n/86
mai
/88
abr/
90m
ar/9
2fe
v/94
jan/
96de
z/97
nov/
99ou
t/01
set/
03ag
o/05
jul/0
7ju
n/09
mai
/11
Price-adjusted Broad Dollar Index --Monthly Index
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Exchange Rate Mismatch
Source: Un Statistics
01.0002.0003.0004.0005.0006.000
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
r
US$
Billi
ons
Foreign official assets in the United States
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Convergence?
0
50
100
150
200
250
300
0
50
100
150
200
250
300
GDP Index, Selected Groups, (1995=100)
World
Advanced economies
Emerging market and developing economies
International Monetary Fund, World Economic Outlook Database, October 2012
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Convergence among advanced economies
0
50
100
150
200
250GDP Index, Selected Groups, (1995=100)
WorldAdvanced economiesEuro area Major advanced economies (G7)Newly industrialized Asian economies
International Monetary Fund, World Economic Outlook Database, October 2012
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Divergence among developing economies
International Monetary Fund, World Economic Outlook Database, October 2012
0
50
100
150
200
250
300
350
0
50
100
150
200
250
300
350GDP Index, Selected Groups, (1995=100)
WorldCentral and eastern EuropeDeveloping AsiaASEAN-5Latin America and the CaribbeanMiddle East and North AfricaSub-Saharan AfricaAdvanced economiesEmerging market and developing economies
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China is the main new player
Source: World Bank
Share in Wolrd Industrial Production (US$ ppp)
Advanced Economies
80%
Emerging and
Developing (except China)16%
China4%
1995
Advanced Economies
78%
Emerging and
Developing (except China)16%
China6%
2000
Advanced Economies
66%
Emerging and
Developing (except China)19%
China15%
2010
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80,00
100,00
120,00
140,00
160,00
180,00
200,00
80
100
120
140
160
180
200
2000
.01
2000
.07
2001
.01
2001
.07
2002
.01
2002
.07
2003
.01
2003
.07
2004
.01
2004
.07
2005
.01
2005
.07
2006
.01
2006
.07
2007
.01
2007
.07
2008
.01
2008
.07
2009
.01
2009
.07
2010
.01
2010
.07
2011
.01
2011
.07
2012
.01
2012
.07
Manufacturing Production and Retail Trade Seasonally Adjusted Volume Index (jan/200 = 100)
Manufacturing
Retail Trade
Brazil – leakage of Domestic Demand
Source: IBGE
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25 25
Brazil – Worsening Trade BalanceQuantum do comércio de manufaturados a preços de 1995
Fonte: FUNCEX
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
em U
S$ M
ilhõe
s
0
20
40
60
80
100
120
140
Índi
ce 2
005
= 10
0
EXPORTAÇÕES
IMPORTAÇÕES
TAXA DE CÂMBIO EFETIVA REAL
Imports and Exports Volume Index and Real Effective Exchange Rate
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26 26
Brazil – Worsening Trade Balance
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010-20,000
-15,000
-10,000
-5,000
0
5,000
10,000
15,000
20,000
25,000
0
20
40
60
80
100
120
140
160
Balance Trade by Sector [US$ million] and Real Effective Exchange Rate
Saldo Bens de Capital Saldo Agricultura/PecuáriaTx câmbio efetiva real (2005=100)
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27
Brazil: capital control measures
1.691
1.676
1.565
1.634
1.563
1.53526/07
1.633
1.677
1.450
1.500
1.550
1.600
1.650
1.700
1.750
03/01/2011 03/02/2011 03/03/2011 03/04/2011 03/05/2011 03/06/2011 03/07/2011 03/08/2011 03/09/2011
Taxa de Câmbio COPOM reduz a taxa básica para 12%
Medidas no Mercado de Derivativos
Medida no Mercado à vista para redução de posição vendida dos bancos
Mudanças nas alíquotas do IOF
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28
Brazil –capital control measures
1,45
1,55
1,65
1,75
1,85
1,95
2,05
2,15
2,25
Financial Operation Tax Increase
Medida no Mercado à vista para redução da posição vendida dos bancos e no Mercado de Derivativos
estabilização da flutuação do câmbio
liberalização das posições vendidas
Nominal Exchange Rate
flexibilização do recebimento de exportações,redução de prazo de empréstimo externo c/ IOF
crise externa e deterioração do cenário mundial
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Brazil – leakage of Domestic Demand
50
60
70
80
90
100
110
120
130
140
Brasil Austrália Indonésia RússiaFonte: BIS. Elaboração: ASSEC/MP.
TAXA DE CÂMBIO EFETIVA REAL - Paises Exportadores de Commodities(Índice 2010 = 100)
DESVALORIZAÇÃO
VALORIZAÇÃO
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Brazil – leakage of Domestic Demand
50
60
70
80
90
100
110
120
130
Brasil China Índia RússiaFonte: BIS. Elaboração: ASSEC/MP.
TAXA DE CÂMBIO EFETIVA REAL - BRICS(Índice 2010 = 100)
DESVALORIZAÇÃO
VALORIZAÇÃO
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Brazil – New Macroeconomic Setting?
Source: IBGE1º
trim2º
trim3º
trim4º
trim1º
trim2º
trim3º
trim4º
trim1º
trim2º
trim3º
trim4º
trim1º
trim2º
trim3º
trim4º
trim1º
trim2º
trim3º
trim4º
trim1º
trim2º
trim3º
trim4º
trim2007 2008 2009 2010 2011 2012
0.0
20.0
40.0
60.0
80.0
100.0
120.0
0.0
5.0
10.0
15.0
20.0
25.0
Import Coefficient, Real Effective Exchange Rate and Interest Rates
Índice de Taxa de Câmbio Efetiva Real (IPCA, 1995=100) EE
Coeficiente de Importação (acumulado em 4 TRI) ED
Taxa de Juros (selic - média 3 M) ED
Taxa de Juros Real (IPCA) ED
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Brazil – Import Coefficient and Exchange rate
4%
6%
8%
10%
12%
14%
16%
18%
20%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
CIN
SU
0
20
40
60
80
100
120
140
160
Taxa
de
câm
bio
real
efe
tiva
Industria de transformação
Manufaturados baixa e média-baixa tecnologiaManufaturados média-alta ealta tecnologiaTaxa de câmbio real efetiva
Fonte: Marconi e Rocha (2012).
Exchange Rate
Low and Median-Low
Technology
Manufacturing
High and Median-High
Technology
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Brazil – New Macroeconomic Setting?
Source: IBGE
Share of Imported Vehicules in new liscensing
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Brazil – Industrial Policy• Exchange Rate Policy• Tax Measures
– Payroll Tax, IPI and Infraestructure
• Public Procurement Measures• Funding for International Trade • Trade Defence Mechanisms • Incentives to ICT sector
– Broad Band Plan and Semiconductors (PADIS)
• Funding for the private sector investment (BNDES)– More credit, Lowering interest rates and Longer Term
• Vehicles Regime
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35
1998 2008 2012
26.5
12.0 11.8
5.311.7
14.8
- 4.0 - 1.7 - 2.0
Dívida Externa TotalReservas InternacionaisTransações CorrentesSource: BCB
External Vulnerability (% GDP)
Brazil – Lower External Vulnerability
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Regional Integration
Source: Un Statistics
49%54%
68%74%
56%
26%
53%
67% 65%71%
48%
27%
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
60,0%
70,0%
80,0%
Asia Ásia* to Asia European Union
European Union to Europe
North America
Latin America
2000 2011
Share of Exports to the same Region
(*)Hong Kong, China, Rep. of Korea, Singapore and Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Taipei, Chinese). Fonte: WTO Elaboração: MP/Assec.
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37 37
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Brazilian Primary Exports by Partner(Share of total %)
EUA China Europa América do Sul
Brazil – Worsening Trade Balance
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38 38
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Brazilian Manufacturing Imports by Partner (Share in total %)
China EUA Europa
Brazil – Worsening Trade Balance