Mantega says Brazil is more prepared to face the crisis than richer nations

The Finance minister, Guido Mantega, affirmed on Thursday (30), in a public hearing at the Committee on Economic Issues (CAE), that the "dynamic emerging countries" - especially Brazil - are more prepared to face the international financial crisis than “richer countries". However, he stressed that "nobody will escape from the effects of this crisis, which is systemic."
As he mentioned the effects of the crisis on different countries, Mantega said that "the impact on Brazil would be different from the impact on United States and Europe". According to the minister, in general, the richest countries have smaller economic growth, smaller capacity of raising internal consumption (because their populations grow slower than the other countries) and, "surprisingly, they do not have so solid macroeconomic foundations” - he mentioned as example the fiscal and commercial deficits of the United States.
Besides, he highlighted the financial institutions of those countries are more fragile, because, according to Mantega, their banks were the ones that took more risk in applications, just as the ones linked to the United States housing market.

The "dynamic emerging countries", according to the minister, are registering larger (and faster) growth, have bigger potential to expand the internal market and, because of that, they can react better in case of foreign market reduction. On the other hand, these countries have more solid macroeconomic foundations, which are reflected in the financial surplus and in the increase of their international reservations.
Specifically about Brazil, the minister affirmed that the country "continues growing and has comparative advantages, as the high indexes of farming productivity." He highlighted that, in the first semester of this year, Gross Domestic Product (GDP) increased 6%.
Mantega also argued that, besides having a good potential for internal market expansion, the Brazilian commercial opening is "more restrict”, as exports represent 13% of the Gross Domestic Product (GDP).
- Foreign trade, therefore, does not affect us so much, unlike what happens, for instance, in China, where exports mean 37% of GDP - he stressed, adding that, on the other hand, Brazilian exports were diversified on the last years, as the country depends less on the richest nations and exports more to the emerging ones. (Agência Senado)