The economy of South America comprises approximately 410 million people living in twelve nations and three territories. It encompasses 6 percent of the world's population.
From the 1930s to 1980s, countries of South America used Import Substitution, an economic policy which replaces foreign businesses as well as imports with domestic production. This was a policy made to produce more development and help grow domestic businesses, which are not competitive with other international industries. However, this policy created a debt crisis in South America.
South America was falling farther behind the Western countries over the past two centuries. This can be explained by South America´s high concentration on primary commodities as well as the state of the educational system and institutional structure, some of which are still related to its colonial past, others to recent political developments.
It was only from the 1990s when countries in South America switched over to the system of Free-Market economy. This eventually pulled countries in South America out of the debt crisis. Now, major economic activities include agriculture, industry, forestry, and mining.
In 2016, four countries, which include Brazil, Ecuador, Argentina and República Bolivariana de Venezuela experienced decline in output. Other countries in the region were observing slowdown in growth rates. Brazil saw this decline in output due to increasing unemployment level, worsening financial conditions and political issues, which, in turn, lead to decrease in private domestic consumption and investment. Argentina also experienced recession in private consumption and investment, however it was because of removal of public service subsidies due to short-term rise in inflation. In contrast, Peru differed from other countries in the region - demonstrating increase in growth rates thanks to copper production.
In 2017, the economy has started to recover for the first time since 2014. The main contributors to economic growth is private consumption. Increased retail trade and industrial production in Brazil has led to expansion of its economy by 1% in 2017. Higher public investments and private consumption have resulted in growth of economy of Argentina compared to its recession in 2016.
In 2017, inflation rates were observed to be in a downward trend in most of the major economies. The reasons are prior exchange rate appreciations and food price deflation. Some countries are even expected to lower their target bands in 2019.
|Economy of South America|
|Population||410,013,492 (2010)[N 1]|
|GDP||$3.990 trillion (nominal, 2016)|
$6.567 trillion (PPP, 2017)
|Per capita: 5.5% (2008)|
GDP per capita
|nominal: US$17,239 (2016)|
PPP: US$21,156 (2016)
Top 10% income
All values, unless otherwise stated, are in US dollars.
Through history, since the colonial period, the export of natural resources has been key factor for South America's economy. With a land that can be divided into four climatic regions (tropical, temperate, arid and cold), South America is a diverse land that is rich in natural resources. It has a wide variety of agricultural products, mineral wealth, plentiful freshwater and rich fisheries.
As one of the most important contributors of the world's agricultural market, South America accounts for approximately 10% of the global agricultural product export. The different climatic regions are home for diverse types of crops. In the tropical climatic regions, two of the most important cash crops are coffee and cacao. South America dominates the global market in coffee production, having Brazil as the world's largest exporter of coffee. A report from the Council of Brazilian Coffee Exporters showed that the coffee industry earned US$5.4 billion in 2016, with the exports of different coffee varieties exceeding 34 million 60 kg bags. This accounts to 6.4% of Brazil's total annual agrobusiness exports of US$84.9. The report showed that by December 2016, the Brazilian coffee industry generated US$557 million in revenue by exporting 3.07 million bags of coffee. Additionally, in 2016 soybeans, grown in South America's temperate climates, had an export value of US$19B for Brazil , representing 10.4% of the total exports, and one of US$3.23B for Argentina, representing 5.7% of the country's total exports. Moreover, the soybean meal exportation represent 17.5% of Argentina's total exports, with an export value of $9.96B.
Other exports from the tropical regions, such as the Amazon rainforest (contained within Brazil, Peru, Colombia, Ecuador, Bolivia French Guiana and Suriname), include cashews and Brazil nuts, globally regarded as delicacies, as well as sugar (sugarcane), avocados, bananas, pineapples, oranges, grapefruits, and mangoes. The sugarcane cultivation has been the backbone of the economy since early colonial times, and Ecuador is the world's largest banana exporter (Banana Production in Ecuador)
In the temperate regions, corn is produced and it is the second most exported product in Argentinas. Additionally in cold climatic regions such as the Andes, there is a high production of crops such as quinoa, increasingly valued internationally, as well as the grazing of llamas, vicuñas and alpacas. These animals are bred for their wool and it is exported globally as a high-quality textile.
80% of manufacturing of the Latin America region falls on Argentina, Brazil and Mexico. Brazil has the third-largest manufacturing sector in the Americas. Accounting for 28.5 percent of GDP, Brazil's industries range from automobiles, steel, and petrochemicals to computers, aircraft (Embraer), and consumer durables.
Chile contributes about a third of the world copper production. Brazil is the world's leading producer of niobium and tantalum, and Peru is the largest silver producer and the second-ranked producer of bismuth and copper. 
Economic history of:
The Andean Community (Spanish: Comunidad Andina, CAN) is a free trade area with the objective of creating a customs union comprising the South American countries of Bolivia, Colombia, Ecuador, and Peru. The trade bloc was called the Andean Pact until 1996 and came into existence when the Cartagena Agreement was signed in 1969. Its headquarters are in Lima, Peru.
The Andean Community has 98 million inhabitants living in an area of 4,700,000 square kilometers, whose Gross Domestic Product amounted to US$745.3 billion in 2005, including Venezuela, who was a member at that time. Its estimated GDP PPP for 2011 amounts to US$902.86 billion, excluding Venezuela.Center for Distributive, Labor and Social Studies
The Center for Distributive, Labor and Social Studies (CEDLAS) is a research center specialising in distribution, labor and social issues in Latin America.Central banks and currencies of the Americas
This is a list of central banks and currencies of the Americas (Central America and South America and North America) .Colombia–Israel relations
Colombia–Israel relations are the diplomatic relations between Colombia and Israel which were officially established in the mid-1950s.Economy of Guyana
With a per capita gross domestic product of $8,300 in 2016 and an average GDP growth of 4.2% over the last decade. Guyana is one of the fastest developing countries in the Western Hemisphere. This is evident from the contrast between poor slum areas and elite residential areas with imperious mansions, often built within a few kilometers of one another.Great Recession in South America
The Great Recession in South America, as it mainly consists of commodity exporters, was not directly affected by the financial turmoil, even if the bond markets of Brazil, Argentina, Colombia and Venezuela have been hit.On the other hand, the continent experienced a tough agricultural crisis at the beginning of 2008. Food prices have increased a lot, due to a lack of arable land. One of the main reasons for the loss of agricultural land was the high value offered by the production of biofuels. However, second generation biofuel processes is slowly being implemented in order to extend the amount of biofuel that can be produced sustainably by using biomass consisting of the residual non-food parts of current crops, such as stems, leaves and husks. Other crops that are not used for food purposes (non food crops), such as switchgrass, grass, jatropha, whole crop maize, and miscanthus could be used to produce biofuels without starving the population that are dependent on food products. Industry waste products (i.e., woodchips, skins and pulp) from fruit pressing would also replace the need to waste arable land for biofuels; possibly improving the South American economy. Food prices, rising since 2002, ascended from 2006, reaching a peak during the first quarter of 2008. In one year the average price of food rose by about 50%.
Then South American countries were affected by both the global slowdown and the decrease in food prices due to the declining demand. In June 2008, the Economic Commission for Latin America and the Caribbean (ECLAC) declared it expected a 4% growth for 2009. However at the end of the year it predicted that the year 2009 would put an end to six years of prosperity during which Latin America has benefited from high raw material prices. Production in the region is likely to decline and unemployment to increase. However, the Center for Economic and Policy Research has estimated that the region may be able to cope with the global downturn with the right macro-economic policies, as these countries no longer depend on the U.S. economy.Great Recession in the Americas
North America was one of the focal points of the global, Great Recession. While Canada has managed to return its economy nearly to the levels it enjoyed prior to the recession, the United States and Mexico are still under the influence of the worldwide economic slowdown. The cost of staple items dropped dramatically in the United States as a result of the recession.Latin American debt crisis
The Latin American debt crisis (Spanish: Crisis de la deuda latinoamericana; Portuguese: Crise da dívida latino-americana) was a financial crisis that originated in the early 1980s (and for some countries starting in the 1970s), often known as "La Década Perdida", when Latin American countries reached a point where their foreign debt exceeded their earning power, and they were not able to repay it.List of American countries by monthly average wage
This is the map and list of American countries by monthly net (after taxes) average wage. The chart below reflects the average (mean) wage as reported by various data providers. The salary distribution is right-skewed, therefore more than 50% of people earn less than the average net salary. These figures have been shrinked after the application of the income tax. In certain countries, actual incomes may exceed those listed in the table due to the existence of grey economies. In some countries, social security, contributions for pensions, public schools, and health are included in these taxes.
The countries in purple on the map have net average salary in excess of $ 2,000 and in blue –in the range of $ 1,000 to $ 1,999, in green - in the range of $ 600 to $ 999, in yellow - in the range of $ 300 to $ 599, and in red below $ 300.
USA's net wage is calculated without state's taxesList of South American countries and dependencies by GDP (PPP)
This is a list of South American nations ranked by Gross Domestic Product (GDP) at Purchasing Power Parity (PPP) for the latest years recorded in the CIA World Factbook. The figures provided are quoted in US dollars and are 2017 estimates unless otherwise noted.List of South American countries by GDP (PPP) per capita
This is a list of South American nations by gross domestic product per capita based on purchasing power parity. All figures are in current international dollars according to The World Factbook by the Central Intelligence Agency, rounded to the nearest hundred.Mercosur
Mercosur (in Spanish), or Mercosul (in Portuguese), officially Southern Common Market, is a South American trade bloc established by the Treaty of Asunción in 1991 and Protocol of Ouro Preto in 1994. Its full members are Argentina, Brazil, Paraguay and Uruguay. Venezuela is a full member but has been suspended since December 1, 2016. Associate countries are Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Suriname. Observer countries are New Zealand and Mexico.Mercosur's purpose is to promote free trade and the fluid movement of goods, people, and currency. It currently confines itself to a customs union, in which there is free intra-zone trade and a common trade policy between member countries. The official languages are Spanish, Portuguese, and Guarani. Since its foundation, Mercosur's functions have been updated, amended, and changed many times: it is now a full customs union and a trading bloc.Single South American currency
The single South American currency was a hypothetical united currency for South America. It was proposed by the leaders of several countries, and would have been issued by the Bank of the South to the members of the Union of South American Nations.
A name for the currency has not yet defined, but several have been proposed, such as condor, American Peso, Latino, pacha, sucre, colombo, and Peso-Real, among others.The Bank of the South establishes monetary policy and finance development projects; one of the objectives of the monetary union is the establishment of a single currency in South America.South American economic crisis of 2002
The South American economic crisis is the economic disturbances which have developed in 2002 in the South American countries of Argentina, Brazil and Uruguay.
The Argentinian economy was suffering from sustained deficit spending and an extremely high debt overhang, and one of its attempted reforms included fixing its exchange rates to the US dollar. When Brazil, as its largest neighbor and trading partner, devalued its own currency in 1999, the Argentinian peg to the US dollar prevented it from matching any of that devaluation, leaving its tradeable goods to be less competitive with Brazilian exports.
Along with a trade imbalance and balance of payment problem, the need for credit to finance its budget deficits made Argentina's economy vulnerable to economic crisis and instability. In 1999, the economy of Argentina shrank by 3.4%. GDP continued to decline: 0.8% in 2000, 4.4% in 2001, and 10.9% in 2002. One year before, in Brazil, low water level in hydroelectric plants, combined with a lack of long-term investment in energy security, forced the country to do an energy rationing program, which negatively affected the national economy.Tottus
Tottus is a chain of Chilean hypermarkets that competes with Líder, Jumbo, Tottus, and Santa Isabel hypermarkets.Treaty of Asunción
The Treaty of Asunción was a treaty between the countries of Argentina, Brazil, Paraguay, and Uruguay signed on March 26, 1991. The objective of the treaty, signed in Asunción, was to establish a common market among the participating countries, popularly called Mercosur (Southern Common Market). Later, the Treaty of Ouro Preto was signed to supplement the first treaty, establishing that the Treaty of Asunción was to be a legally and internationally recognized organization.
The treaty defined a program of gradual elimination of import/export fees that would reach a free commerce zone by the end of 1994. Even though the dates of the program were not followed and the free zone was not yet reached, the treaty established the bases for the "Mercado Común del Sur" (Mercosur).Union of South American Nations
The Union of South American Nations (USAN; Spanish: Unión de Naciones Suramericanas, UNASUR; Portuguese: União de Nações Sul-Americanas, UNASUL; Dutch: Unie van Zuid-Amerikaanse Naties, UZAN; and sometimes referred to as the South American Union) is an intergovernmental regional organization that once comprised twelve South American countries; as of 2019, most have withdrawn.
The UNASUR Constitutive Treaty was signed on 23 May 2008, at the Third Summit of Heads of State, held in Brasília, Brazil. According to the Constitutive Treaty, the Union's headquarters will be located in Quito, Ecuador. On 1 December 2010, Uruguay became the ninth state to ratify the UNASUR treaty, thus giving the union full legality. As the Constitutive Treaty entered into force on 11 March 2011, UNASUR became a legal entity during a meeting of Foreign Ministers in Mitad del Mundo, Ecuador, where they had laid the foundation stone for the Secretariat Headquarters.In April 2018, six countries—Argentina, Brazil, Chile, Colombia, Paraguay and Peru—suspended their membership, and in August of the same year, Colombia announced its withdrawal from the organization. In March 2019, Brazil's president Jair Bolsonaro announced his country's intention to withdraw from the organization. On March 13, 2019, Ecuador announced that it will withdraw from the organization. The president of the country, Lenin Moreno, also asked the bloc to return the headquarters building of the organization, based in Quito.In January 2019, amid growing concern about Venezuela's Nicolas Maduro, a new group, Prosur, has been advanced to "counteract the influence of what countries in the region call a dictatorship in Venezuela". A Chilean summit to organize Prosur will be held in March 2019, and would exclude Venezuela. Argentina, Brazil, Bolivia, Colombia, Chile, Ecuador, Uruguay, Paraguay, Peru, Guyana and Suriname were invited to join the new regional bloc.World Business Report (radio programme)
World Business Report is the BBC World Service's international business and finance news programme, broadcast on Mondays at 0132 and weekdays at 1532 and 2232 GMT and produced at Broadcasting House in London. Each programme is 26 minutes long and includes business news, interviews and reports.
South America articles
Economy of South America
|States with limited|