Economics

The South American continent was for a long time a continent that struggled with its democracy. Its political leadership concentrated mainly in benefitting from all that came with the trappings of power and as such most of these nations never gained from the leadership provided by the political class. Military-led coups did little to salvage an already desperate situation. The region is however rich with resources that include minerals, oil and natural gas. The minerals that are distributed across the countries are gold, bauxite, iron ore phosphates, uranium, tin, and manganese among others. As a whole, the countries in the South American continent have a very high population of people who are unemployed. This is demonstrated by the fact that in most of these nations, the rich possess almost ninety percent of the riches. For instance, in Venezuela, the rich are in possession of nearly ninety percent of the countrys wealth. Therefore, most of the South American nations suffer from unequal distribution of wealth that seems to leave the poor out of focus (Santiso 1) (Latin Americas Political Economy of the Possible 1).

The economies of the South American countries rely heavily on the exportation of resources found within their boundaries. Resources such as minerals, oil and agricultural produce are exported to foreign countries. From the exports, these economies earn foreign currencies that they use to boost their foreign reserves. During the most tumultuous crises that caused uncertainty in the region, foreign reserves reduced to dangerous levels due to the withdrawal of investors who no longer found it profitable to trade from within the South American region. A case in point is Brazil that suffered the most during the economic crises of early nineties. The final characteristic that the economies of South American countries share is that of depending on foreign economies. For instance, Mexico depends heavily on the United States of America for donor funding and other general trade agreements. An effect of this is that when the economy of America suffers, it is bound to have serious ramifications on that of Mexico. This was clearly demonstrated during the recent economic meltdown of the year 2008 to 2009. Argentina, a country whose population is Portuguese-speaking, is another example. It depends on the economy of Brazil which is known to be the biggest in the region.

In as much as all these countries share similarities in their economies and how they are run, Brazil has set itself apart as a country whose economic stability is unrivalled. Not only is it the strongest in the South American continent, but the world at large also recognizes it as an economy to reckon with. Its abundant mineral resources easily outclass that of the other countries in the continent. Apart from relying on the mineral resources, Brazil is one of the largest exporters of agricultural produce worldwide. The agricultural sector mainly deals in production of grains such as wheat, corn and rice. The labor it needs is provided by its population standing at a staggering 97.21million of labor force thus guaranteeing the lowest unemployment rates in the continent. It also practices free-trade that has enabled the traders in the region to set competitive prices for their goods. The steady growth of economy has in turn led to an ever-increasing number of middle class workers who provide the economy with a healthy internal consumer market. The interest rates are considerably lower in Brazil as compared to the other countries (Economy Watch 1) (South American Economy 1). The advantages that Brazil has over the other countries are a bonus for its economy as it does not suffer from some problems that continuously dog the other nations. This is attributed to the efforts of President Henrique Cardoso who started a stabilization program in the period 1994-1996. The economy was made robust by the increase of lending from within while at the same time reducing the foreign debt. A move that saw the foreign debt greatly reduced while domestic debt kept at a healthy level at a time when foreign investors had closed shop and moved out.  The programs ended up controlling the taxes and rates of inflation while simultaneously increasing public investment. With these sound advantages over its South American counterparts, Brazil has set up an economy that is rivaled largely by the developed world.