Brazil has paid the price of being “integrated” into the global economy. As foreign investors and speculators pulled out, the securities markets slumped and the currency was sharply devalued. The Government’s response has been somewhat timid, with expenditure lower and slower than needed. Brazil still may be able to ride out the crisis if the Government rises to the challenge, however. Meanwhile, the world economy has a unique opportunity to promote environmentally sustainable growth strategies and new rules for making financial systems work for development and the redistribution of income and wealth.
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