Marcelo Rinesi had a rather interesting post on Global Economy Matters recently, where he raised the question of whether some of the planet's 'laggard' economies - like Argentina and Venezuela - might not be getting some growth-positive backdraft from the strong growth which is ocurring in places like China and India - (via the impact on commodity prices) whilst at the same time remaining in some significant way trapped in the past.
Marcelo proposed the term "Time-Delay Fields" to describe this phenomenon. The delay is basically reflected in the way in which the institutional structure fails to avail itself of the new opportunities presented, and gets itself stuck in the semi-vicious circle of deploying one outdated trick after another. As Marcelo puts it:
Of course, long-term alarmism over the prospects of Argentina and Venezuela is at this point unwarranted; neither Chavez nor Kirchner have had yet time to radically affect the societal and economic makeup of their countries (the former not for lack of trying). But it's also true that, were commodity prices to drop tomorrow, neither Argentina nor Venezuela would find themselves with better tools (in technology, infrastructure or management) that they had six or seven years ago.
Interestingly another example of just such a time delay process can be found in the pages of Bloomberg today:
Argentine economists and unions may begin tracking inflation on their own after President Nestor Kirchner replaced the official in charge of calculating consumer prices, shaking confidence in the government's statistics.
So the point would be that whilst some countries are taking advantage of the relatively favourable headwind to implement necessary reforms (Brazil, Chile) others are manifestly either not doing this at all (Venezuela) or to a far lesser extent than they should (Argentina). Thinking about how and why they have the luxury to do this offers an interesting sideview on the current global conjuncture, and does reveal another hidden dimension to those dashed global imbalances.
Incidentally, GEM blogger Artim made a similar point vis-a-vis Ecuador and Thailand in a separate earlier post.
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