Task 3. Compose a summary of the text in 80 words.
Date: 2015-10-07; view: 384.
UNIT 3
Task 1. Read the text “Latin America's Economies: Here We Go Again!” and translate it.
Task 2. Find answers to the following questions in the text and write them down:
1. What happened after the collapse in Argentina in 2001?
2. Did the financial markets in Latin America's biggest economy come close to panic in 2002? Why?
3. What are the similarities and differences between Brazil and Argentina?
4. May the rich countries and the IMF decide whether to swallow their doubts and organise large-scale financial support?
5. What two things would help to stabilise the situation?
LATIN AMERICA'S ECONOMIES: HERE WE GO AGAIN!
In international finance it never rains, it pours. Rich-country currencies and stock markets are in the mess – not much helped by the latest revelations at American malpractice. Fears emerge together with emerging markets. This time the attention is focused on Latin America.
After the collapse in Argentina in 2001, the rest of the region and emerging markets seemed to get off slightly. Worries about financial contagion of the kind that spread disaster during the East Asian crisis of 1997-1998 eased. Argentina was allowed to sort out its own problems without the assistance it might once have expected. Nevertheless, Argentina's plight had gone from bad to unbearable – and contagion was back. The strain was being clearly felt in Brazil. In 2002 financial markets in Latin America's biggest economy came close to panic. The stock market tumbled; risk spread on the country's debts; rumours abounded of a gathering flight from the currency. Brazil couldn't go the way of Argentina.
With luck and resolve it need not happen. The similarities between these two countries are only skin-deep. Argentina's debt was mostly external; Brazil's is mostly domestic. Argentina had tied itself to a fixed exchange-rate system; Brazil has a floating currency to act as a shock absorber.
Argentina's economy is small and dependent on trade in just a few goods, Brazil's is big and diversified.
The trouble is, markets have a habit of getting their way even when they are wrong. Predictions of financial collapse are notoriously self-fulfilling. And the medium-term sustainability of Brazil's domestic debt is genuinely in doubt.
Therefore, the rich countries and the IMF (International Monetary Fund) may decide whether to swallow their doubts and organise large-scale financial support. In the meantime, two things would help to stabilise the situation. First, all of Brazil's presidential candidates should make it clear that they are preparing to deal with the domestic-debt problem and support current moves to make the country's central bank independent. Second, rich-country leaders should either say helpful things or keep quiet.