est in 2008, both peak and bottom coincide with peak and bottom of oil prices.
Graph 2: GDP growth (1997-2010)
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observed period average Brazilian growth was 3,14%. The fundaments for Brazilian growth were set with Real Plan introduced by Cardoso. He undertook important reforms, but Brazil was the Latin American country most affected by the Asian crisis (1997-98), her economic growth was modest (0,0378%), but still positive. They introduced new currency which was initially pegged to US $ in 1999 and experienced good results very quickly (inflation dropped fast). Economy was slowly growing after that. The turning point came with the election of Lula in 2002. He started orthodox fiscal program with inflation targeting, responsible fiscal federalism, export diversification, progress in reducing poverty with program Bolsa FamГlia -Family Basket (income Gini index decreased by - 5,09 from 2000 until 2010). All this success is visible on Graph 1 and Graph 2. Brazil was also affected by global financial crisis in 2009 and she experience slightly negative growth (-0,644%), but in 2010 the crisis for Brazil ended (4,03%), mostly due to conservative bank lending policies (high required reserves) before crisis (Brazil s home mortgage debt amounts to just 1.7% of its GDP) and good state and private owned banks. The influence of discovery of Tupi oil field in October 2006 by state owned oil company Petrobras - the largest oil field found in Western Hemisphere in 30 years and some other discoveries also helped Brazil to recover from the crises. Brazil is also relative closed economy not so much connected with world s financial system, but this doesn t decrease importance of their good pre crisis economy state, which helped Brazil to overcome crisis very fast.
On the other hand Russia was painfully hit in 1998 when she experienced -5,3% economic growth due to failure Shock Therapy transition after breakup of Soviet Union in 1991, fixed overvalued ruble, chronic fiscal deficit, declining productivity, low prices of oil and Asian crisis (1997-98). The 1999-2000 elections marked a turning point. A post-Washington consensus had emerged - Moscow consensus. They focused on fiscal and monetary discipline, currency convertibility, price and trade liberalisation and privatisation. Putin started his mandate as Russian president in 2000 after Yeltsin s resignation. And soon got a lot of help of Russian s best economist: oil. The impact of oil prices on Russian economy can be overvalued. A study by the Rand Corporation suggested that increased energy rents accounted for between one-third and two-fif...
