Certain countries are associate members of the Mercosur while being permanent members of the Andean Community: Bolivia and Peru.
Chile, due to historical reasons, did not sign as a permanent member of the Mercosur, but has an associate participation in the economical groups of South America. Still, it remains the only totally independent country.
GDP Growth Rates
Analysis-
Most South American countries appear to have a minimum growth rate in their GDP. However, most countries are now in a recession and some have increasingly lower GDP growth rates (for example URUGUAY, dropping more than 3 points in the past 2 years.)
Argentina shows an aggravated crisis which has been reason for the latest concern around the globe. A financial crash has caused more than 3 presidents to resign and the constant protests, marches and the bank withdrawal (due to high devaluation) have caused an economical lockdown and the infamous “corralito financiero”, causing widespread starvation and poverty.
Colombian growth is also small, probably an effect of low foreign investment caused by the ongoing war: this increase as, in feb. 2002, the peace agreements with the FARC were terminated and the confrontational war restarted.
Unemployment
Analysis of graph-
Argentina’s high unemployment rates correspond to the recent (2001-2002) severe economical crisis where, summed upon decreasing exports, devaluation and dropping economical trade, many companies have filed for bankruptcy- even state owned- this being the top employer (as a common in South America).
Brazil, Bolivia and Peru expose very low unemployment rates (close to most European countries). This is because they have a widespread underemployment because of the state’s impossibility to handle the social care properly and protect the unemployed.
AVERAGE UNEMPLOYMENT IN SOUTH AMERICA:
(7.6 + 25 + 10.1 + 17 + 6.4 + 14 + 17.8 + 9 + 15.2 + 14.1) / 10
= 13 . 6%
Participation percentage in total GDP of South America
Formula: Country GDP over Total GDP X 100. Total GDP= 2.5974 Trillion
Participation Percentage in total population of S. A.
Formula: Country Pop. Over Total Pop. X 100. Total Pop.= 353,750,537
Analysis of Graphs-
One can see that the participation on the GDP total of the subcontinent becomes relative ot the participation on the total population. This ensures that all people are receiving approximately the same relative mean income per capita. However, some nations do expose a lower income as they change positions, for example, Colombia, Peru and Bolivia; meanwhile, Argentina, Chile and Uruguay have higher incomes:
Analysis-
Certain countries of the Mercosur maintain a very high share of GDP per capita. (The closer both curves are), Proving to be the richest countries of South America; #1: Uruguay, this yet being the smallest, but more stable country.
The lackey investment in Colombia has caused the GDP to be lowered while being the second largest country, in terms of population. Most problems are owed to the internal conflict’s effects. Bolivia has also a high social instability and government economical barriers on the huge coca industry have generated an addition to the loss of the GDP.
Chile’s protected economy continues to have high GDP standards as the country has focused about mining and other technological industries rather than agriculture, because of lack of arable land.
International Market Balance
Formula: Exports – Imports
Analysis –
The commercial profit of these countries levels out with the devaluation of the national monetary unit. Countries like Argentina, previous to the crisis, relying heavily on their national industries make high profits in trade balance. US- dependant countries (with certain exceptions) like Colombia, or Brazil, show a negative statistic as commerce focuses abroad and the understimulated national industry and agriculture are covered through importation of goods.
Venezuela’s particularly high commercial balance is a product of their national resources. The raising oil prices are their heaviest benefits. Numbers are up to November, 2002, however, and the exportation losses due to the December-January 2003 two month lasting strike are not registered, but would obviously imply considerable decrease in the margin.
External Debt as a Percentage of the GDP
Formula: External Debt over GDP X 100
Analysis-
Countries as Colombia and Brazil, with relatively high GDP’s and relatively smaller external debt, have low percentage of debt, despite the increasing investment in aid by the international community.
Argentina’s and Ecuador’s great debts correspond to their similar economical situations and crises, in 1999-2000 and 2001-2002, which required great aid from the IMF and other international economical organs.
Population Below Poverty Line
Formula: Population X % below poverty line / 100
Population below poverty line, and % per economic pact
Formula: Total Poor pop. Per economic pact over total pop. Per economic pact X 100. Note: Chile is not a fixed member.
Total poor in S. A.: 69.068.247+55.038.856+3.409.765=127.516.868 (36%)
Analysis-
The focus here is the possibility to observe independently the economical situation above simple unemployment facts which may be flawed, as, for example, they do not cover underemployment.
One can see the rate of poverty in Brazil is very high but is proportional by size of the population. The poverty in countries such as Brazil and Colombia is caused by aconomic policies that fail to provide correct assistance to the market economy, while in Colombia, particularly, the internal conflict causes widespread unemployment, famine, poverty, etc., and the recently increased defence spenditure- 5% of the GDP, reduces the appropriate social investment and the recovery of the economy.
Although exposed poorly by obsolete figures, the situation in Argentina may well be several times graver. The economic crisis of 2001-2002 has caused the greater part of the population to fall below the line of poverty.
Per economical affiliation, the situation in the affiliates of the Mercosur has proven to be better than the Andean Community, more us dependant. Despite the collapse of the argentinian economy, the economies of the South have consolidated their production, as well as they have received (especially Brazil) a high increase in foreign investment.
The higher instability of all the countries in the Andean Community – Bolivia’s coca producers’ revolt, Venezuela’s opposition to Chávez, Colombia’s internal conflict- alongside Ecuador and Peru feeling the backslash of recent crises, both political and economical, prove the Northern economic region to be less consolidated and thus less successful, providing new problems to face.
Conclusions-
From the analyses one can draw several conclusions.
The situation in South America is becoming increasingly critical. Considering that certain facts may be considered to be outdated, the situation in the subcontinent was already at an increasingly alarming state. The demographical explosions during the past four years have become the catalyst for the decadence of the region.
The northern countries appear to be the ones most involved in social effervescence of the region. Venezuela and Colombia nowadays show that the first was a timebomb which was exploded twice, and the second is an ongoing fire, 40 years in conflict. Meanwhile, southern regions show more stability and prosperity. Uruguay, Paraguay and Chile- consolidating a more solid democracy and thus a more stable economical growth. Argentina and Venezuela are exceptions since they seem to be an unstable element in the region:Venezuelans seem to maintain themselves despite the events which would include a military coup to Hugo Chávez; Argentina otherwise dropped its reknowned prosperity as their economy, unlike and without a large effect on neighbouring countries, and fell into a severe depression.
I believe I have managed to handle correctly and expose several mathematical and economical statistics properly alongside and combining them with the subcontinent’s current affairs in order to appropriately address the matters stated as the task to follow, and as a means to review the possible outcomes of the passiveness to the national and regionwide events.
Bibliography-
-CIA World Factbook ()
-Depto. Administrativo Nacional de Estadística (DANE)-Colombia
-El Tiempo ()
-SEMANA ()
-Oficina Central de Estadistica e Informática (OCEI)-Venezuela
-Time ()
-CNN ()
-El Universal ()
-El Comercio ()
-BBC News ()
-The Economist ()
Mathematical Studies
Proyect:
How has the South American Economy been affected by its current affairs? An Overview
By: Andrés Jiménez
Mathematical Studies
Candidate # 0149-042
Colegio Anglo Colombiano