From the early 1980s, South America experienced a severe
debt crisis, which diminished the ability of countries to
pursue independent economic policies. The rise in oil prices
from 1972 and easy access to loans led to a 15-fold increase
in Latin American debt abroad during this decade. After
that, the loan sources disappeared; When borrowing new
loans, the loan banks via the World Bank and the IMF
demanded a restructuring of the economy.
The goal was macroeconomic stability and strong economic
growth. The funds were removal of public subsidies,
liberalization of capital markets, easier access for foreign
investment, privatization and public savings. The wave of
privatization has broken through almost everywhere, and the
problems of inflation and foreign debt are generally under
But the side effects of the process have been stressful.
in Argentina and Brazil, the lack of initiatives that could
offset the growing social differences has been conspicuous.
Brazil is in every way the world's great power and has
the world's eighth largest economy. Argentina and Colombia
follow with ranking among the 30 largest. In terms of
economic development, most of the countries belong to the
so-called middle-income countries with Argentina, Brazil and
Chile (ABC states defined by
Countryaah) together with Uruguay in the upper part.
Then comes Venezuela, Colombia, Peru and Paraguay, while
Ecuador and Bolivia are the poorest. Most often, Argentina
and Brazil are regarded as so-called NIC countries with
significant industrial development.
Until the mid-1900s. South America consisted
predominantly of agricultural societies, but as in the rest
of the world, industry, trade and service industries have
grown in importance.
Agriculture. Only 6% of the area can be
cultivated, but compared to the relatively few population
there is plenty of land available. However, the development
of South American agriculture has been hampered by a very
distant distribution of land, which is a legacy of the
Much of the best land is still owned by large estates
with extensive cultivation methods. In contrast, most
farmers are employed in small-scale farming with their own
consumption. Some large farms are run as plantations whose
crops have changed over time, depending on economic
conditions and prices in the export markets.
Effective modern large-scale agriculture, often with
irrigation, is now found, among other things. in southern
and eastern Brazil, in parts of Argentina and on the coast
of Peru. Especially from this comes South America's
significant export of products such as soy, sugar, bananas
and coffee. Agricultural production has increased greatly
since 1975, and among other things. for example, meat
production has doubled or tripled in most countries. Cattle
and sheep play a major role everywhere, and in the poorest
areas also goats; especially the latter give rise to strong
wear and tear on the vegetation.
Land reform is a recurring theme in every election
campaign in South America, but compared to the extent of the
problem, very little has happened in most countries. A
well-known initiative to acquire land is the construction of
Transamazonica, a highway system through the Amazon that
opened the rainforest area and enabled the colonization of
hitherto inaccessible areas.
Forestry. The Amazon is the world's largest
rainforest area. Forest resources are of local importance to
the rainforest Indians and the settlers who have been
allocated land after the construction of roads in the areas.
Extraction of hardwood, i.a. for export, takes place on a
commercial basis. Brazil is one of the world's largest
producers of wood, wood pulp and paper. eucalyptus
plantations outside the Amazon.
The fishery was greatly expanded and modernized
after World War II. Some of the world's richest waters are
off the west coast, and in 1994 Peru and Chile accounted for
21% of the world's fish catch. The vast majority are
industrial fishing for fishmeal. Incidentally, fishing is of
particular local importance; this also applies to freshwater
Mining. South America is very rich in minerals,
and many ore fields were known even before colonization. In
addition to gold and silver, there are copper, iron, tin,
lead, coal and oil. Carajás in Brazil is the world's largest
iron ore mine, and with regard to tin and especially copper,
a significant part of world production comes from South
America, especially Chile and Peru. South America holds
approx. 8% of the world's known oil reserves; Venezuela is
by far the largest producer.
Industry. Manufacturing employs 15-25% of the
workforce in the various countries, and most have
experienced the trend, which is also known from the actual
countries, that industrial employment is declining in favor
of service industries. The development strategies of several
countries have been aimed at increasing the production of
their own industrial products, and for example Brazil
reached a 95% self-sufficiency rate in the 1990s.
A large part of the industry is located in the capitals
and the largest cities, and often development has begun with
the processing of own agricultural products. Other companies
have emerged on a foreign initiative, including automotive
industry in Argentina, Brazil and Venezuela. In order to
promote foreign investment, free zones have been set up and
special rules have been adopted for foreign investors.
Transportation. Along the Pacific is the
Pan-American Highway, which at Santiago sends a side
road across the Andes to Buenos Aires. The Transamazonica
highway system is still under construction (2005).
Environmental problems. The arrival of the
whites to South America caused major interference with
nature. Forest areas were constantly felled and this
development continues. On the coasts, the forests were
replaced by plantations, and today the rainforest is reduced
in favor of roads, urban plants, farms, cattle breeding,
mines and oil extraction.
Large quantities of mercury are used to extract gold,
which pollute the rivers. Oil extraction also causes major
problems; Among other things, is Maracaibo lake biological
death, and Indians in Ecuador and Peru have been destroyed
their land by spills from oil pipelines.