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71. On the Economics of Regional Powers: Comparing China, India, Brazil, and South Africa

Author:
Robert Kappel
Publication Date:
09-2010
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
As the conception of and debates on regional powers have been led by political science, this paper aims to contribute to the discussion from an economics perspective. Based on the discussion of different concepts of economic power—such as those of Schumpeter, Perroux, Predöhl, or Kindleberger—concepts of technological leadership, and the global value chain approaches, the paper develops a research framework for the economics of regional powers. This framework is then tested using descriptive statistics as well as regressions analysis, with a focus on the four regional powers Brazil, China, India, and South Africa. As economic power is relational, the relationship of regional powers to other nations in the region is analyzed.
Topic:
Economics and International Trade and Finance
Political Geography:
Africa, China, India, South Africa, Brazil, and Latin America

72. Verschiebungen der globalen Machtverhältnisse durch den Aufstieg von Regionalen Führungsmächten. China, Indien, Brasilien und Südafrika im Vergleich

Author:
Robert Kappel
Publication Date:
09-2010
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
A number of regional powers are becoming important international actors and are changing the coordinates of world politics and the global economy. The political and economicshift in favor of these regional powers has been accompanied by the relative loss of importance of the US, Japan, and the EU. The latter countries are increasingly challenged by the economic growth and the geostrategical actions of the regional powers. As the conception of and debates on regional powers have been led by political science, this paper aims to contribute to the discussion from an economics perspective. Based on the discussion of different concepts of economic power–such as those of Schumpeter, Perroux, Predöhl, or Kindleberger–concepts of technological leadership, and the global value chain approaches, the paper develops a research framework for the economics of regional powers. This framework is then tested using descriptive statistics as well as regressions analysis, with a focus on the four regional powers Brazil, China, India, and South Africa. As economic power is relational, the relationship of regional powers to other nations in the region is analyzed. According to the findings, only limited conclusions on the economics of regional powers are possible: a regional power can be described as an economy with a relatively large population and land area which plays a dominant role in trade within the region and in the regional governance. The regional power develops its technological capacities, and its businesses act regionally and globally with increasing strength.
Topic:
International Relations, Economics, Globalization, International Political Economy, and Power Politics
Political Geography:
China, India, and Brazil

73. Dilemmas of Brazilian Grand Strategy

Author:
Hal Brands
Publication Date:
08-2010
Content Type:
Working Paper
Institution:
The Strategic Studies Institute of the U.S. Army War College
Abstract:
This monograph analyzes Brazilian grand strategy under President Luiz Inácio Lula da Silva. During Lula's nearly 8 years in office, he has pursued a multipronged grand strategy aimed at hastening the transition from unipolarity and Western economic hegemony to a multipolar order in which international rules, norms, and institutions are more favorable to Brazilian interests. Lula has done so by emphasizing three diplomatic strategies: soft balancing against the United States, building coalitions to magnify Brazilian negotiating power, and seeking to position Brazil as the leader of a more united South America.
Topic:
Economics, Globalization, International Trade and Finance, and Regional Cooperation
Political Geography:
United States, Brazil, South America, and Latin America

74. Currency Wars?

Author:
William R. Cline and John Williamson
Publication Date:
11-2010
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
A widespread currency war is in prospect. The term was first introduced by Guido Mantega, the finance minster of Brazil. He envisaged the International Monetary Fund (IMF) developing an index that measures whether currencies are held artificially low to boost exports (popularly referred to as “currency manipulation”). If that IMF exercise did not lead to an easing of such exchange market intervention, he suggested that an undervalued exchange rate could eventually be considered a commercial subsidy.
Topic:
Economics, International Cooperation, International Trade and Finance, and Monetary Policy
Political Geography:
Brazil

75. The Environmental Impacts of Soybean Expansion And Infrastructure Development in Brazil's Amazon Basin

Author:
Maria del Carmen Vera-Diaz, Robert K. Kaufmann, and Daniel C. Nepstad
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
For decades, the development of transportation infrastructure in the Brazilian Amazon has been the government's main social and economic development policy in the region. Reductions in transportation costs have not only opened the agricultural frontier to cattle ranching and logging but have also caused more than two-thirds of Amazonian deforestation. Currently, soybean cultivation is a new economic force demanding improvements to roads in the region. Profitable soybean crops have spread over the Mato Grosso's cerrados and now head toward the core of the Amazon rain forest. One of the main constraints for soy expansion into the Amazon has been the poor condition of roads. In this study, we analyze the effect Amazon transportation infrastructure programs have on soybean expansion by lowering transport costs. The analysis is based on spatial estimates of transportation costs for the soybean sector, first using current road networks and then projecting changes based on the paving of the Cuiabá-Santarém road. Our results indicate that paving the Cuiabá-Santarém road would reduce transportation costs by an average of $10 per ton for farmers located in the northern part of Mato Grosso, by allowing producers to reroute soybean shipments to the Santarém port. Paving the road also would expand the area where growing soybeans is economically feasible by about 70 percent, from 120,000 to 205,000 km2 . Most of this new area would be located in the state of Pará and is covered largely by forests. A Cost-Benefit analysis of the road project indicates that the investments in infrastructure would generate more than $180 million for soybean farmers over a period of twenty years. These benefits, however, ignore the project's environmental impacts. If the destruction of ecological services and products provided by the existing forests is accounted for, then the Cuiabá-Santarém investment would generate a net loss of between $762 million and $1.9 billion. This result shows the importance of including the value of the natural capital in feasibility studies of infrastructure projects to reflect their real benefits to society as a whole.
Topic:
Agriculture, Development, Economics, Environment, and Infrastructure
Political Geography:
Brazil, Latin America, and Amazon Basin

76. The growth of Brazil's direct investment abroad and the challenges it faces

Author:
Luís Afonso Lima and Octavio de Barros
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
The internationalization of Brazilian companies is a relatively recent phenomenon. From 2000 to 2003, outward foreign direct investment (OFDI) averaged USD 0.7 billion a year. Over the four-year period 2004−2008, this average jumped to nearly USD 14 billion. In 2008, when global FDI inflows were estimated to have fallen by 15%, OFDI from Brazil almost tripled, increasing from just over USD 7 billion in 2007 to nearly USD 21 billion in 2008 (annex figure 1 below). Central Bank data put the current stock of Brazilian OFDI at USD 104 billion, an increase of 89% over 2003. Caution is in order about these figures, however, as in Brazilian outflows it is difficult to separate authentic FDI from purely financial investment under the guise of FDI. According to the most recent data, 887 Brazilian companies have invested abroad
Topic:
Development, Economics, International Political Economy, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
Brazil and Latin America

77. Criss-Crossing Globalization: Uphill Flows of Skill-Intensive Goods and Foreign Direct Investment

Author:
Arvind Subramanian and Aaditya Mattoo
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper documents an unusual and possibly significant phenomenon: the export of skills, embodied in goods, services or capital from poorer to richer countries. We first present a set of stylized facts. Using a measure which combines the sophistication of a country's exports with the average income level of destination countries, we show that the performance of a number of developing countries, notably China, Mexico and South Africa, matches that of much more advanced countries, such as Japan, Spain and USA. Creating a new combined dataset on FDI (covering greenfield investment as well as mergers and acquisitions) we show that flows of FDI to OECD countries from developing countries like Brazil, India, Malaysia and South Africa as a share of their GDP, are as large as flows from countries like Japan, Korea and the US. Then, taking the work of Hausmann et al (2007) as a point of departure, we suggest that it is not just the composition of exports but their destination that matters. In both cross-sectional and panel regressions, with a range of controls, we find that a measure of uphill flows of sophisticated goods is significantly associated with better growth performance. These results suggest the need for a deeper analysis of whether development benefits might derive not from deifying comparative advantage but from defying it.
Topic:
Development, Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
United States, Japan, Malaysia, India, South Africa, Brazil, Spain, and Korea

78. Brazil and the Transatlantic Community in the Wake of the Global Crisis

Author:
Thomas J Trebat
Publication Date:
06-2009
Content Type:
Working Paper
Institution:
Institute for Latin American and Iberian Studies at Columbia University
Abstract:
As the great global crisis eases its grasp, it is a time to reconsider relations between Brazil and the North, especially the United States and the European Union. While the world economy is still reeling, it is very possible that a new and more productive period in Brazil's relations with the US and Europe is possible. This positive outcome derives from numerous factors, most especially Brazil's “peaceful rise” to a more prominent global role and the arrival of the Obama administration whose promise of a new beginning in U.S. foreign policy has been greeted with such evident enthusiasm in Latin America.
Topic:
International Relations, Foreign Policy, Development, Economics, International Political Economy, and Financial Crisis
Political Geography:
United States, Europe, Brazil, and Latin America

79. Can Global De-Carbonization Inhibit Developing-Country Industrialization?

Author:
Arvind Subramanian, Aaditya Mattoo, Dominique van der Mensbrugghe, and Jianwu He
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Most economic analyses of climate change have focused on the aggregate impact on countries of mitigation actions. We depart first in disaggregating the impact by sector, focusing particularly on manufacturing output and exports because of the potential growth consequences. Second, we decompose the impact of an agreement on emissions reductions into three components: the change in the price of carbon due to each country's emission cuts per se; the further change in this price due to emissions tradability; and the changes due to any international transfers (private and public). Manufacturing output and exports in low carbon intensity countries such as Brazil are not adversely affected. In contrast, in high carbon intensity countries, such as China and India, even a modest agreement depresses manufacturing output by 6-7 percent and manufacturing exports by 9-11 percent. The increase in the carbon price induced by emissions tradability hurts manufacturing output most while the Dutch disease effects of transfers hurt exports most. If the growth costs of these structural changes are judged to be substantial, the current policy consensus, which favors emissions tradability (on efficiency grounds) supplemented with financial transfers (on equity grounds), needs re-consideration.
Topic:
Climate Change, Development, and Economics
Political Geography:
China, India, and Brazil

80. The Great Regression? Financial Crisis in an Age of Global Interdependence

Author:
Vadim Kononenko, Raimo Väyrynen, Toby Archer, Kristian Kurki (ed.), and Matti Nojonen
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
The financial crisis and the ensuing global economic downturn have been the focal point of news coverage and policy analysis for over a year now, and speculation has been rife about how things will pan out. At one extreme are those who shrug the situation off as a significant yet transient dent in economic development, with marginal repercussions on the global system. At the other end are those touting the crisis as the first step in an epoch-making transition in the global power balance, where rapidly expanding economies like China, Brazil and India will make gains on the hitherto dominant developed nations, shifting the distribution of power in the world. Whatever the eventual outcome, there is no denying that the crisis's impact on international relations will be significant.
Topic:
Economics, Globalization, Power Politics, and Financial Crisis
Political Geography:
China, India, and Brazil