India versus Brazil – Policymakers and Effective Economic Management

Brazil appears to be squandering some of the credibility earned by its policymakers over the past 15 years. The recent Petrobras-Worker’s Party controversy is troubling:

“Faced with the likelihood of a lengthy prison term, Mr. Costa, formerly one of Petrobras’s most powerful executives, accepted a plea deal from prosecutors. In return, he is testifying in detail that he turned the refining division of Petrobras, Brazil’s largest company, into a slush fund for Ms. Rousseff’s Workers Party and its coalition in Brasília.” - NYTIMES

http://www.nytimes.com/2014/10/20/world/americas/scandal-over-brazilian-oil-company-petrobras-adds-turmoil-to-the-presidential-race.html

Is it Time for a Leadership Change in Brazil?

http://www.economist.com/news/briefing/21625661-under-dilma-rousseff-brazils-economy-has-stalled-she-promises-reignite-growthbut-faces

Meanwhile,

Under new leadership, India is finally on the right track:

The Modi government announced the elimination of some costly fuel subsidies –

http://www.livemint.com/Industry/nC4iwdlmIDH61EdLI8AN1M/Modi-uses-oil-slump-to-ease-curbs-deterring-Chevron-to-Relia.html

Further reforms and some privatization are also on the agenda:

http://in.reuters.com/article/2014/10/20/india-economy-idINKCN0I90O120141020

India Get a New Economic Adviser

http://www.livemint.com/Politics/rSldARiPlE2fpasnQpNLII/Arvind-Subramanian-appointed-chief-economic-advisor.html

Government Launches Much Needed Labor Market Reforms

http://www.livemint.com/Politics/tRK4eM4sdYcu7hw5BigNqN/Narendra-Modi-introduces-labour-reforms-to-end-inspector-ra.html

India Better Placed Than Most Emerging Markets

Victor Mallet of the FT notes:

“Amid gloom over global economic growth and uncertain prospects for emerging markets, India is beginning to stand out as uniquely well-placed to gather the windfall benefits of an international slowdown. Unlike Brazil, Russia or South Africa, India reaps immediate advantages for its terms of trade and its domestic budget from the fall in commodity prices triggered by renewed concerns about the world economy. And unlike China, India will not suffer much from any decline in global demand for manufactured goods because its export sector is relatively small.”