The Impact of the Global Economic Recession on the Emerging Markets

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[...] 2009, the GDP of emerging markets was whereas the GDP of Advance countries was - (The IMF World Economic outlook database, 2009). Are they affected by the crisis as strongly as developed nations? Is the Decoupling theory viable during the financial crisis?The Decoupling theory states that emerging countries, especially Brazil, Russia, China, and India are becoming increasingly independent of the US economy. Supporters of this theory are persuaded that the growth of emerging countries over the last few years will support economic recession in the US. [...]

[...] We must await the end of the crisis in developed countries in order to have a better vision of the future of emerging markets. References Baduel, B. (2009) Les canaux de transmission de la crise de 2009 en Amérique latine, Observatoire Politique de l'Amerique Latine et des Caraibes. [online] Available at: http://www.opalc.org/web/index.php?option=com_content&view=article&id=195:le s-canaux-de-transmission-de-la-crise-de-2009-en-amerique- latine&catid=153:la-crise-de-20082009-en-amerique-latine&Itemid=205 BANCO INTERAMERICANO DE DESARROLLO, Datainla: Sistema de Estadísticas de Comercio de América [online] Available at: http://www.iadb.org/dataintal/Default.aspx Burns J. (2009) World Bank Warns on Emerging GDP, the Wall Street journal [online] Available at: http://online.wsj.com/article/SB124562987448935449.html Chiadiac M. [...]

[...] [Online] available at: http://www.globalix.fr/content/mexique-2009-comparable-a-1995 Reinhart, Carmen M., Rogoff, Kenneth (2009) This time is different: Eight centuries of financial folly Princeton University press Ritomo (2008) Les mécanismes de la dette du Sud. [online] Available at: http://www.ritimo.org/dossiers_thematiques/dette/dette_mecanismes.html Rizvi, S. (2008) Emerging Markets Decoupling Theory - A Myth, Indianmba [online] Available at: http://www.indianmba.com/Faculty_Column/FC794/fc794.html The World Bank, Latin America In 2009 confronting the impact of the global crisis (2009) Cox, P. Woodrow Wilson International Center: The World Bank THE WORLD BANK, data & research [online] Available at: http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/0,,menuPK:476823~pagePK:641 65236~piPK:64165141~theSitePK:469372,00.html Trading economics Economics data base [online] Available at: http://www.tradingeconomics.com/default.aspx UNITED NATION [...]

[...] The recession in developed countries has reduced their domestic demand, by an economic mechanism which has decreased the exports of emerging countries. Mexico is one of the countries, most affected by the decrease in domestic demand in the USA. Indeed, USA is its main trade partner, and accounts for 80% of its export. Mexico's current account plummeted to USD 292.3 million at the worst stage of the crisis in November 2008 (Trading Economics database website, 2009). Contrary to Mexico, Brazil, Peru or even Chile are less affected by today's crisis given that their exports are less linked to the US markets. [...]

[...] To conclude, though the decoupling theory does not work, it is very interesting to analyze how emerging countries respond to the global recession. Emerging countries are less affected by the global crisis. However the slowing down of the world economy did not spare emerging countries. What is the future for emerging markets? In 2009 the IMF predicted that emerging countries will recover a healthier economic situation more easily and rapidly than the developed countries. GDP of Emerging markets should attain a level of in 2010 and only for developed countries'”. [...]