The Great Recession and Developing Countries
Figure D3.2. Area Planted 90,000,000 80,000,000 70,000,000 83%
60,000,000 hectares
158
50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 1996
2006
Source: IBGE.
Brazil’s economy outperformed Mexico. But this episode followed a relatively poor performance for the 1990s—even compared with Mexico, thanks to the “V-shaped” recovery from the Tequila Crisis and the initial gains from the creation of the North American Free Trade Agreement (NAFTA). Moreover, there is some irony to Mexico’s success in “upgrading” to almost all manufactures in exports and not developing a more diversified basket, with more traditional natural resource–intensive exports. During the precrisis commodity boom, Mexico did not experience the same terms-of-trade gains that Brazil experienced. In addition, there is some irony in the geographic “advantage” of Mexico’s location next to the U.S. market: the “easy” export gains to the NAFTA market subsequently left Mexico’s export base exposed to the epicenter of the global economic crisis. Mexico is the topic of another chapter; however, these points may be of interest