Line chart and statistics of external debt for exports ratio, 1999 through 2009. In 2009, the ratio values are 1.45 for Brazil, 1.22 for Russia, 0.65 for India (2008) and 0.96 for South Africa. They are all less than half the Euro area's ratio

The faster-growing emerging market economies namely Brazil, Russia, India and South Africa are the best in class as the ratio external debt to exports is concerned. They all have ratios below 1.5 and either decreasing significantly, or growing very slowly at an average annual rate below 2% every year.

They put on an outstanding performance, compared with the large economies – as evidenced by the comparison with the Euro area line –, and they push the so-called PIGS group to the abyss. This is revealing of the comparative strengths and weaknesses of the production and export based growth model on one side, and the consumption and credit based model on the other side.

The financial and economic crisis triggered by the latter, which translated in a series of real estate bubble bursts, credit defaults, delinquencies, deep indebtedness, and the subsequent economic squeeze, also affected the BRICS, as evidenced by the sharp fall of exports that induced a rise of the ratio in 2009. Nevertheless, the external debt position of the BRICS is more advantageous than that of other economies, for instance the Euro area, as shown in the chart.

 

BRICS (Brazil, Russia, India, China¹, South Africa)
Ratio
Gross External Debt / Exports of goods, services, income and workers' remittances

Year

Brazil

Russia

India

South Africa
Gross external debtExports

Ratio External debt / exports

 Gross external debtExports

Ratio External debt / exports

 Gross external debtExports

Ratio External debt / exports

 Gross external debtExports

Ratio External debt / exports
(Million current US$)(Million current US$)(Million current US$)(Million current US$)
1999 60,326  88,499  64,308  35,535 
2000 69,317  119,350  75,191  39,507 
2001 72,003  120,488  79,798  38,389 
2002 74,919  131,218  89,436 32,72838,9360.84
2003235,41488,8882.65185,741163,5151.14 109,170 37,13849,9960.74
2004220,182114,7161.92214,503216,7250.99 139,307 43,33461,3680.71
2005187,987140,0301.34257,402286,8650.90 182,207 46,15772,2020.64
2006199,372166,5981.20313,176365,1750.86160,242229,7220.7059,39684,1170.71
2007240,495198,9051.21463,915441,9061.05206,005285,6980.7275,27596,6200.78
2008262,910243,8161.08480,541585,8360.82229,799355,5950.6571,811104,8670.68
2009277,563191,7731.45467,230381,6541.22252,298  79,25382,5410.96
2010-Q1293,005  463,754  262,252  81,729  
2010-Q2309,510  456,060  273,078  80,516  
Average annual change rate-9.56% 1.14% -2.44% 1.93%
¹ The group of nations known by the acronym BRICS includes China. Unfortunately, data for this entity is unavailable.

 

Sources: JEDH for external debt, and World DataBank for balance of payments items.

 

areppim logo  areppim: information, pure and simple