The South American Economic Crisis is the economic disturbances which have developed in 2002 in the South American countries of Argentina, Brazil and Uruguay.
The Argentinian economy was suffering from sustained deficit spending and an extremely high debt overhang, and one of its attempted reforms included fixing its exchange rates to the US dollar. When Brazil, as its largest neighbor and trading partner, devalued its own currency in 1999, the Argentinian peg to the US dollar prevented it from matching ever part of that devaluation, leaving its tradeable goods to be less competitive with Brazilian exports.
Along with a trade imbalance and balance of payment problem, its need for credit to finance its budget deficits made Argentina's economy vulnerable to economic crisis and instability. In 1999 the economy of Argentina shrank by 3.4%, the same happened in the following years with GDP declining 0.8% in 2000, some 4.4% in 2001 and 10.9% in 2002. One year before, in Brazil, low water level in hydroelectric plants combined with a lack of long-term investment in energy security forced the country to do an energy rationing program which negativelly affected the national economy.
Famous quotes containing the words south american, south, american, economic and/or crisis:
“Indeed, I believe that in the future, when we shall have seized again, as we will seize if we are true to ourselves, our own fair part of commerce upon the sea, and when we shall have again our appropriate share of South American trade, that these railroads from St. Louis, touching deep harbors on the gulf, and communicating there with lines of steamships, shall touch the ports of South America and bring their tribute to you.”
—Benjamin Harrison (1833–1901)
“A friend and I flew south with our children. During the week we spent together I took off my shoes, let down my hair, took apart my psyche, cleaned the pieces, and put them together again in much improved condition. I feel like a car that’s just had a tune-up. Only another woman could have acted as the mechanic.”
—Anna Quindlen (20th century)
“I repeat that in this sense the most splendid court in Christendom is provincial, having authority to consult about Transalpine interests only, and not the affairs of Rome. A prætor or proconsul would suffice to settle the questions which absorb the attention of the English Parliament and the American Congress.”
—Henry David Thoreau (1817–1862)
“Just as men must give up economic control when their wives share the responsibility for the family’s financial well-being, women must give up exclusive parental control when their husbands assume more responsibility for child care.”
—Augustus Y. Napier (20th century)
“In crisis is cleverness born.”
—Chinese proverb.