Developing BRICS countries less affected by European downturn
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Steve Chiotakis: European finance ministers are meeting in Poland at this hour, trying to sort out the debt crisis that’s enveloped several countries there. U.S. Treasury Secretary Tim Geithner is also there doing a little cheerleading to get the leaders to find a solution — fast.
One coalition that’s not at today’s meetings, though, is the group of developing economies known as
BRICS countries — Brazil, Russia, India, China and South Africa. Those countries will meet in Washington next week to come up with their own plan to help Europe.
The BBC’s Paolo Cabral is with us now from Sao Paolo, Brazil. Paolo, good morning.
Paolo Cabral: Hello there.
Chiotakis: So how is Brazil looking at all this turmoil in Europe? What happens in Europe certainly is going to have an effect on the BRICS developing nations, right?
Cabral: Certainly. Brazil is looking with concern to the financial turmoil hitting Europe and the United States, because everything is connected nowadays. But it must be said, it doesn’t have impact in Brazil as strong as it would have had 10 or 15 years ago because Brazil has diversified its straight partners, its straight relations. Just an example — China took over the position of the United States as the main trading partner of Brazil some two years ago. And so, nowadays Brazil sells its commodities to China. So in the past we’d say that whenever Europe or the United States sneezed, Brazil would have pneumonia. That doesn’t happen anymore.
Chiotakis: These countries, Paolo — including Brazil — are meeting next week in Washington to come up with a plan of action to help Europe. Can they actually do anything?
Cabral: Well, look. Brazil, for example, has quite a lot of international reserves, so it could in theory even provide funds for Europe. But it doesn’t seem likely that the Brazilian Central Bank is going to make these resources available for countries. So it still is to be seen what kind of plan the G20 countries are going to come up with.
Chiotakis: The BBC’s Paolo Cabral in Sao Paolo, Brazil. Paolo, thank you.
Cabral: Thank you.
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