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Economic development in South America
Economic development refers to a continued community effort to improve the
quality of life and the local economy by transforming the regions capacity to cope with
economic change. South America is made up of various countries for instance: Brazil,
Argentina, Peru, Bolivia, Colombia, Ecuador, Guyana, Paraguay, Suriname, Uruguay,
and Venezuela (South America Map 5). French Guiana can also be regarded as part of
South America and others like Falkland Islands, ABC Islands, and Toboga, and
Before the continental economic boom in 1990s, South America was recognized
for containing some of the globals biggest debts by the IMF. Such countries included
Venezuela, Argentina, and Brazil. These high debts were highly related with the
widespread political corruption in these countries and extreme borrowing. It has
experienced enormous economic development since the 1990s, with Uruguay,
Colombia, Argentina, Peru, and Venezuela growing their economies by more than 8%
per year Caldern uis 2. On the other hand, the economy of Brazil is anticipated to
grow at a slow rate in the near future. South America mainly depends on exporting
goods. In the top position is Brazil with a total amount of exports at 137.8 billion dollars;
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second is Chile with 58.12 billion dollars, followed by Argentina with 46.46 billion dollars.
Economic development has taken place in South America in various sectors.
An increase in the number of industrial centers in South America has developed
heavy industries to complement the light industries on which they had formerly
concentrated. The main hindrance to industrial growth in South America was
inadequate goal. This region depends on petroleum reserves in Argentina, Venezuela,
Peru, Colombia, Chile, and Ecuador, as a source of fuel. There has also been a gradual
development in their natural gases (Rathbone 1). Other resources that have contributed
to economic development are copper in the Central Andes region of Peru and Chile.
Other significant mineral resources include gold and manganese in Brazil, tin in Bolivia,
and bauxite in Suriname and Guyana.
There was a reduction in disparity in South America during the 1970s,
proceeding to the liability crisis and last decade of the 1980s. There was a rise in
inequality in the tough years of 1980s and a continuous increase in inequality in some
economies in the 1990s because most of them were recovering. It was concerned with
the impacts of market oriented improvements on inequality because majority of personal
transformation had offsetting impacts. Trade and tax were considered regressive, but
opening an account was considered progressive. Good management of macroeconomic
policies like monetary, fiscal, and exchange rate led to economic growth and reduction
in the level of poverty. Democratization in advanced economies can be related with
some other reforms that have not been historically interrelated with a reduction in
inequality in South America, for instance an increase in salaries and wages in national
income. There has been a reduction in a country like Peru because of the deteriorating
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labor market institutions. Similarly, consolidated democracy still exists in countries like
Peru, Bolivia, and Guatemala. An increase in access of primary and secondary level
can be seen as a long term trend throughout the region and developing countries. This
clearly indicates that it is not mainly education that has led to an increase in the level of
education, but instead the participation of South America in a global trend reflecting
changing international norms in the Post World War 11 period. In terms of an increase
in accessing school facilities, South America has not been left behind, over the previous
50 years, until 1955. For instance, in Brazil, there was drive for basic education
especially in the second half of the 1990s.
South America has been laying the basis for inclusive and strong growth
following several years of economic crisis. Various countries have adopted market
friendly policies and some of them are involved in structural transformations which are
aimed at boosting the growth performance of the region. A gross domestic product of
4% is quite convincing, but it is also not enough to meet the regions potential. The
region has the potential to support the modernization of its nations. Peru and Columbia
are countries that are showing the way to stand out. The gross domestic product of
Peru has tripled in the current decade, increasing by 6% on average, and there are also
low levels of inflation in the region (International Monetary Fund 1). Approximately 7.5
million People have been lifted out of poverty which is equal to one-quarter of the entire
population. In Brazil, approximately 40 people have benefited from conditional monetary
transfers in the current years and it is coming up with new projects to continue dealing
with poverty alienation programs. In Peru, the major asset of a business organization is
its capability to a head after years of uncertainty. The government is also aimed at
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diversification of the economy, services, goods, and people. Several countries including
Uruguay have applied for observer status. The economic crisis in developed economies
implies that South America must strengthen interregional trade. Mexico has also
initiated various reform agenda backed by all political forces.
South America has been very dynamic in pushing for higher competitions in
energy and telecommunications, while pushing for monetary and reform of taxes to
improve credit. The champions of growth in the region are Peru and Panama. Mexico
does not also want to be lag behind. In terms of trade, a significant initiative has been
spearheaded by Colombia, Chile, Peru, and Mexico. The free trade agreement will
result in the removal of 90% of tariffs between member countries; they are also
committed to having a free flow of capital within the region. South America is also
becoming industrialized (Rathbone 5). Various multinational companies from South
America that surfaced in current decades have now become international challengers.
There is a wide range of industries where South American companies are becoming
more competitive. Apart from Brazilian oil and mining giants Petrobas and Vale, other
international challengers include Mexicos Cemex, which is situated in 36 countries, as
well as food and retail companies like Brasil foods, Mexicos Bimbo, and Chiles
falabella. Brazils TAM and Chiles in the airline industry have merged to form atam.
South American companies have ample challenges at home and they are also prepared
to deal with volatile business environments. But the future of this region will depend on
the strength of its small and medium sized businesses and family-run businesses, which
have a higher participation in regional growth in the future. South America is among the
globes economic success stories. Majority of the countries are growing at a level the
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international average while paying down arrears and promoting international
investment. This region stands out to be the global most uneven. For instance,
Uruguay, the most egalitarian country, has a similar GINI coefficient like that of
Philippines, which is the common imbalanced nation in Asia.
Education is the key to development, but the current OECD international survey
has indicated that every South American school system is lagging behind. Universities
and schools do not provide students with adequate skills required by employers.
However, opportunity lies in this challenge, because investment and new education
policies can move South America forward. There should be measurement of teachers
and students. For instance, the measurement system that was implemented by Mexico
is promising. Ineffective teachers must be provided with training. For instance, Panama
is collaborating with Intel and Microsoft to offer teachers current technology and educate
them on their uses. One of the largest companies in Peru known as Intercop is
operating universities and schools, while the government is increasing expenditure on
education and providing scholarships for global post graduate study.
Studies indicate that on average women complete more years in schooling
compared to men, but they are paid less and they are less likely to attain leadership
positions. Lager businesses have to understand that gender bias will make them to
have competitive disadvantage, because they discriminate the most discriminated
workers of the continent. Offering long life training opportunities and preventive
healthcare can keep individuals productive in their old age. An open and stable
economy and flexible labor markets will enhance free enterprise and investment. Tax
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reduction can enhance not only corporate, but also providing funds for community
entrepreneurs who aim at making income while helping the poor.
The government is supposed to provide an ample environment beyond a single
administration, encouraging entrepreneurs to invest. Transfer programs like Brazils
Bolsa Familia have enabled many people to come out of poverty and implemented
structures that nongovernmental organization and social entrepreneurs can use.
Uruguay is a South American country with a population of approximately 3.3 million
people as at 2008 (McLeod &Lustig 5). It has a fairly good Gross National product of
about 8260 US dollars. For the past 60 years, it has undergone several changes in
terms of political, social, and economic scenes. The economy of Uruguay recovered
from an economic recession of the past periods during the early years of the military
rule (South America Map (b) 3). However, its economy started worsening immediately
this period came to an end. This forced the military to return authority to the Civilian
population and the democracy was returned too in 1985. Since then, there was
sustained growth of the Uruguayan economy. It began being unstable and fluctuated
compared with its neighboring countries. A good example is the Argentine economic
crisis of 1999-2000 which had great spillover impacts onto the Uruguay economy.
Majority of the industries are significant to the economy of South America.
Majority of them produce building materials, consumer gods, and food items. A
significant factor that is significant to the economy is exporting and importing. The
Mercosul common market is the most significant bloc in the region and it has been of
great significance in fostering trade between its members. South America has also
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developed its transport system that enables the movement of people and transportation
of goods and services within the region.
Human capital is the main dimension of progress. The significant sector of
human capital is health and education. Uruguay is seen to be very successful in
developing its education system. For instance, by 2008, its literacy level stood at 98%
and it was the first country in South America compared with other developed nations
like the United States of America. It is also significant to note that Uruguay is among
countries that have high literacy levels for the past 30 years. The literacy level for the
adult population by 1975 stood at 98.3%. Recent developments indicate that it was the
first country to provide free internet based computers to primary school children as a
way of enhancing every childs inclinations and passions.
Secondly, the health system of Uruguay has also undergone some
developments. It is referred to as first welfare state of South America because of its
policies on social security, health, and education (UNDP, 2). Research also indicates
that there has been an increase in life expectancy from 67 years in 1960 to 75 years as
of 2008. Uruguay has very well handled the issue of child mortality which is among the
8 Millennium Development Goals. This is shown by a decrease in the rate infant
mortality. The health care systems faced problems of corruption in the 1950s that
caused a burden on the economy. Generally, Uruguay has performed exceptionally well
in the 1950s.
In conclusion, South America is one of the continents that show a remarkable
improvement in the development of its economy. Improvements can be seen in the
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education and health sectors in Uruguay and Peru, telecommunications and energy in
Mexico, Brazil, and Argentina among others.

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Works Cited

Caldern, Csar and uis Servn. The output cost of Latin America's infrastructure
GAP. [Santiago de Chile]: 2002. Print.
International Monetary Fund. Regional economic outlook: Western Hemisphere, Time to
rebuild policy space. World Economic AND Financial Surveys, (2013)
Mceod, Darryl and Nora ustig. Poverty and Inequality under atin Americas New eft
Rathbone, Paul. "A golden era fades as South America faces its crossroads." Financial
Times, 2013. Web. 26 Nov 2013. <http://www.ft.com/cms/s/0/f4b0deb4-3598-
Regimes, 2010. Paper prepared for the 15th Annual ACEA Meeting, Medellin,
Colombia: Universidad de Antioquia and Universidad Eafit.
South America Map b. Economy of Argentina Maps of World, 2013, web, 26 Nov
2013. <http://www.mapsofworld.com/south-america/economy/argentina.html>
South America Map. Economy of Peru. Maps of World, 2013. Web. 26 Nov 2013.<
UNDP, Human. "Indices & Data | Human Development Reports (HDR) | United Nations
Development Programme (UNDP)." Hdr.undp.org, 2013. Web. 26 Nov 2013.