Brazil and Indonesia: A Study in Contrasts of Emerging Markets

Emerging-markets economies around the world face growing pressures from tighter global liquidity and a growth slowdown in China, but no two EM countries are alike. Consider the cases of Brazil and Indonesia.

Brazil深度衰退和蓬勃发展的政治腐败丑闻使其成为最脆弱的新兴市场之一，银行家和政策制定者上周末同意了annual meetings of the International Monetary Fund and World Bank in Lima, Peru。由于越来越多的预算赤字和高通胀，该国没有房间可以缓解财政或货币政策，近年来，政府未能追求结构性改革，这是经济表现得如此糟糕的原因。相比之下，印度尼西亚正在管理维持稳定的增长，尽管其靠近与中国经济靠近和互连。

“我们学会了最好的防守[是]如果你是健康的话，印度尼西亚银行银行副州长的Perry Warjiyo在国际货币基金组织会议采访时表示。中央银行早些时候徒步旅行，于2013年将在控制下带来通货膨胀;1997年 - 98年亚洲危机之后采用的更严格的银行监督创造了一个健康的银行业，平均资本比例仅为20％以上;政府搬迁以消除汽油补贴，以帮助资助的基础设施支出促进增长。根据国际货币基金组织的数据，预计经济将在今年今年扩大4.7％和2016年的5.1％。

The contrasting fortunes of the two countries offer lessons for other emerging-markets economies struggling in today’s harsh global environment. China’s slowdown has taken away the biggest growth driver of many EM economies. The country’s imports plunged by 17.7 percent in September from a year earlier, the 11th consecutive monthly drop. That slowdown, combined with anticipation of rate hikes from the Federal Reserve Board, has caused capital to flow out of emerging markets for the first time in more than a generation. The Institute of International Finance (IIF), a trade body, predicted last week that foreign investors would withdraw a net $541 billion in capital from 30 leading EM economies this year, the first such withdrawal since 1988, and it predicted outflows would continue, albeit at a more moderate pace, in 2016.

Few countries have been hit as hard as Brazil. The country has long been one of the biggest magnets for foreign capital in the EM universe because of its open and deep capital markets, but the fallout from lower commodity prices and a scandal over multibillion-dollar kickbacks from state-owned company Petróleo Brasileiro has sent the economy into a tailspin. Economic output is expected to contract by 3 percent this year and 1 percent the next, while inflation is seen hitting 8.9 percent this year before easing, according to IMF projections. The Fund’s managing director, Christine Lagarde, underscored the problem by lumping Brazil with Venezuela as the two Latin American countries struggling the most to adjust to today’s weak global economy.

President Dilma Rousseffis seeking to restore confidence by backing the efforts of her Finance minister, Joaquim Levy, to contain a big budget deficit, but the threat of impeachment proceedings against the president over the Petrobras affair has emboldened congressional opponents of austerity.

“巴西问题的核心是财政，”巴西第二大银行的ITAúUnibanco的首席经济学家Ilan Goldfajn担任资产，告诉由IIF组织的小组会议。“你真的没有其他国家对反周期政策的空间。”他补充说，卢苏德的人气评级陷入了单一数字的事实“使得很难批准您需要的财政措施”。

尽管国会反对，但在国际货币基金组织会议上采访的征税，誓言，推动了更大的财政克制。“很明显我们需要做的事情，”他说。“有很多替代方案。”他面临着一个大的艰难斗争。政府最近承认，明年将错过实现初级预算盈余（在考虑到债务利益之前的余额），迄今为止阻止征税的金融交易税的提案，以帮助关闭差距。这些因素LED标准差额差别的评级服务删除了上个月巴西的投资级评级，将该国降级为一个陷波，以BB +。

Levy表示，经济将“比您认为越早”为通过一个可靠的财政政策而回应。但他说，即使在没有财政突破的情况下，巴西也有很多灵活性地应对中国的变化。“Levy表示，最重要的是，允许真实地贬值提高巴西出口的竞争力。在过去的12个月里，真正的下降了40％以上，贸易约3.87美元。

In Indonesia, meanwhile, the fallout from slower growth in China “has been more than what we had expected,” by dampening demand for coal and other commodity exports, Finance minister Bambang Brodjonegoro told an IIF panel session.

“We don’t know what’s going to happen to China in the future” in terms of growth, Brodjonegoro said, but it’s clear Indonesia will have to rely more on manufactured exports, rather than resources, in the future.

印度尼西亚是吸引更多manufacturing investment from China, Japan and South Korea and needs to maintain its competitiveness to keep the money coming, said deputy governor Warjiyo, but should resist further currency depreciation. The rupiah had fallen by nearly 17 percent since September 2014, hitting a low of 14,662 to the dollar earlier this month, before it rebounded by nearly 10 percent, to 13,351. Even at that level, though, “the rupiah is still undervalued,” Warjiyo said.

And although fear of higher U.S. rates has contributed to the capital outflow from emerging markets, Warjiyo joined a growing chorus of EM officials at the Lima meetings in urging the Fed to hurry up and get off zero, arguing that uncertainty about the timing was causing more trouble than any 25 basis-point hike is likely to do.

“Sooner is better,” said the central banker. “The first move of the dance is usually the most difficult thing. But we have been living with uncertainty for so long.”