IKN

Just to prove we care about the real serious, deep economic issues, today we report on the big, bad heavy duty economics forum that kicked some serious butt in Brazil today. “The Euro: Global Implications and Relevance for Latin America” was the name of the bunfest and the TMF* sent along its esteemed economist and Director of the Western Hemisphere Department, Anoop Singh to address the assembled dignitaries.

Anoop addressing today’s audience
(or did I make a typo at Google Images?)

…the TMF* has been reduced in the region to oblique crits and catty comments. Today was no exception, and it didn’t take long for your diligent incakola crew to spot the attempted bitchslap in Anoop’s presentation today (available for your viewing pleasure right here).

Check for yourself Fig. 18 of the presentation (on page 14), entitled “Change In Trade Balances, Assuming a Drop of 35% In Commodities Prices” (snappy title, huh?). In this table, we get the TMF’s* call on what will happen to 17 LatAm countries if the bottom falls out of the commods market and they all drop 35%. Now before we go any further remember this is just another round of BS scaremongering, but let’s hear these guys out, yeah?

The whole calculation is on how trade balances would be affected. Y’see, cos we got loads of commodities down here most countries are running a trade balance surplus right now (eg Latinland sells U$20Bn of commods and buys U$15Bn of DVD players, final score U$5Bn to Latinland). This is good of course, and long may it continue. But the TMF* says that if commodities drop in value the problems will be worse in some countries and better in others.

So let’s look at five states they mentioned and examine the results. You’ll see for each country

1) the GDP figure for 2007
2) the trade balance for the country
3) the trade balance as a percentage of GDP
4) the TMF* forecast on how a 35% drop in commodities prices would affect the trade balance as a percentage of GDP
5) Anoop’s final verdict (ok we made this bit up, but we’re kinda sure he was thinking these thoughts all along….like….probably….dude)

All the GDP and trade figures are from the 2008 CIA World Factbook, by the way. (those CIA guys are useful sometimes).

Argentina
1) GDP: 523.7Bn
2) Trade balance: 14.34Bn
3) % of balance to GDP: +2.7%
4) TMF* 35% adjustment: -3.8%
5) Anoop’s final verdict: “You guys are screwed. We hate you for ignoring us and being successful. You better pray China keeps buying your mouldy soybeans, Kirchner.”

Brazil
1) GDP: 1838Bn
2) Trade balance: 46.4Bn
3) % of balance to GDP: +2.4%
4) TMF* 35% adjustment: -1.1%
5) Anoop’s final verdict: “You guys scrape through, cos even though you kicked us out you did it diplomatically and as I’m standing here in Sao Paolo it’d be a bit bogus to slag you off.”

Chile
1) GDP: 234.4Bn
2) Trade balance: 24.63Bn
3) % of balance to GDP: +10.5%
4) TMF* 35% adjustment: -6.3%
5) Anoop’s final verdict: “Everybody loves Chile, so there’s no freakin’ way I’m going to point out the obvious fact that you guys are so damned dependent on copper it hurts. We love you guys. Air kisses to Bachelet.”

Peru
1) GDP: 217.5Bn
2: Trade balance: 8.39Bn
3) % of balance to GDP: +3.8%
4) TMF* 35% adjustment: -4.8%
5) Anoop’s final verdict: “Hah! You think you’re getting investment grade this year? Wrong again, fools! Get yourself some value added on those metals you mine and we’ll talk again, suckers.”

Venezuela
1) GDP: 335Bn
2) Trade balance: 21.56Bn
3) % of balance to GDP: +6.4%
4) TMF* 35% adjustment: -9.2%
5) Anoop’s final verdict: “Did you honestly think we’d say anything vaguely complimentary about your sustained growth, improved living standards, success in fighting poverty, high currency reserve levels and everything else we just ignore cos you’re doing well?”

You see, the international economics community is just as snarky as the political community that grabs all the headlines. You just need to look a bit closer to find the snarkiness.