Economic Development of South America - Essay Example

Future Development Of The Seven Largest South American Economies Introduction South America is one of the locations in the global arena that is first emerging as economic powerhouses in the world economy. In the past few decades, Latin America has experienced immense growth and development to the extent that it is emerging as one of the most vibrant economies in the international system. The future development agenda of some of the economies in the region remains bright. Brazil, Mexico, Colombia, Argentina, Chile, Venezuela and Peru are some of the emerging economic hubs in South America. Future development of the seven largest economies in Latin America is promising and will have varied effects on the natural resources and the citizens. Brazil is the largest economy in South America to the extent that it is the bedrock of development in the region. The future of the Brazilian economy is more promising and vibrant though there are a number of issues that pose serious consequences on its development agenda. Case in point is that the Brazilian economy is predominant government controlled, thus locking out the private sector to some extent. The private sector in Brazilian is not as vibrant as witnessed in emerging economies. The government controls many areas of the economy and such tendencies retard economic growth. Essentially, the development of private institutions in the Brazilian economy have limited chances of experiencing growth and as such not much is witnessed in terms of growth and development. The Brazilian gross domestic product is burdened by the government in the sense that close to 40% is used for outlays effectively sparing about 60% for development (Silva & Chandel, 2014). It is also important to note that the Brazilian economy has limited freedom in the sense that red tapes have affected entrepreneurial tendencies in the region. Consequently, the tax burden in Brazil cannot be overemphasized. Income and domestic taxes are at an all time high to the extent that the citizens are directly affected by such manifestations. Brazil is currently investing in various energy sectors and technology. Wind energy is a development area that Brazil is working to the extent that there are turbines that already contributes significantly to the national grid (Christiansen, 2014). Domestic technology is an area of interest that Brazil has done significantly well with private institutions contributing through commercial power generation. The government of Brazil and in partnership with the private sector have come together to partner in infrastructure development. Investments in iron ore have boosted Brazils development agenda in the year 2013 (Silva & Chandel, 2014). Mexico has in the recent past experienced difficult times in its economy, though the future looks more promising after the crisis. Mexico has recently undergone a turmoil in its economy in the sense that it has faced one of the worst financial crises. However, it managed to recover to the extent that the gross domestic product has gone up by about 4% (Kesselman et al., 2013). Mexico has the best human capital in the sense that most individuals are skilled. Consequently, Mexico has a low cost of materials and that of doing business, and the positive index has raised the profile of the Mexican economy. Mexico’s proximity to the US is a boost in the sense that trading has become relatively easy and effective. Drug barons, impunity and corruption, are major challenges that might slow down the development agenda of Mexico. Mexico is first developing, and its development agenda is on a positive trajectory. The citizens are bound to benefit extensively from the development that is likely to stretch to the future. The development agenda might have adverse effects on natural resources due to climate change. Mexico does not use standard energy sources, and the resultant factor may be depletion of the natural resources (Kesselman et al., 2013). Colombia’s future development is on a positive trail, and the number of changes that have been effected in the recent past manifests is in the domain of Latin America. The country has experienced booming business in terms of exports, and this has put the nation on a positive trajectory. The levels of insecurity have reduced effectively attracting the investors on the land. Infrastructure development in Colombia has gained momentum in to the extent that in 2014 more resources have been allocated as appropriate (Gregg et al., 2014). Mining is of critical importance in the development of the Colombia and more natural resources are being mined and exported for foreign exchange. Argentina’s future development remains unpredictable in the sense that it is yet to exploit its natural resources as appropriate. It is important to note that its energy sector is the worst maintained, and the large oil deposits and minerals are yet to be exploited. It is also important to note that investors for the longest time have shunned the Argentinian market because it has no friendly market policies. Argentina’ development depends on how much it will be able to exploit its natural resources (World Bank Annual Report 2013). Argentina is currently partnering with the world bank to help initiate fundamental development projects. Infrastructure development, Agriculture and education are key development areas in Argentina. Argentina has close to $7.37 billion of credit that is supposed to go to development projects (World Bank Annual Report 2013). The citizens are likely to be affected by such tendencies and negative connotations emanating from the Argentina’s economy. Perus future development is pegged on the rapid economic growth that the nation continues to experience. Peru has significantly invested in solar energy to the extent that it is a key contributor to the national grid. Case in point is that the investment in solar energy has seen close to 2 million people benefiting from the electricity. Perus domestic market has rallied to an all-time positive, and the countrys cycle of growth is set to stretch the development of Peru in the future. Foreign investors continue to be attracted to the Perus market a manifestation that the future is brighter for the nation (OECD, 2014). The natural resources in Peru are a major boost and going into the future mining is set to set the nation on a positive trail. Development will ensure intense exploitation of resources in Peru. The citizens in Peru benefit from business opportunities provided by the vibrant domestic market. Sustained growth is critical to Chiles future development. Chiles economy has been vibrant, and its free market has attracted more investors to a greater extent. In the past few years, Chile has managed a 5% GDP growth, and the trend is likely to continue into the future. Solar energy is a fundamental investment sector in Chile. Solar radiations especially in the northern side of Chile are high and the nation has invested significantly in the area and is a major boost to Chiles development agenda (Buckman, 2013). Venezuela majorly depends on natural resources to sustain its economy. Currently, the economy of Venezuela depends largely on oil exports (Tinker, 2013). The future development of Venezuela depends on the sustainability of the oil and other mineral proceeds. The oil proceeds support the social programs, and the people are set to continue benefitting. Conclusion Brazil, Mexico, Colombia, Argentina, Chile, Venezuela and Peru are the largest economies in South America. Future development of these nations and the effect on the natural resources and citizens will depend on how sustainable growth is enhanced. These economies have to deal with the inherent challenges posed to ensure development in the future. The future of the seven largest South American economies in terms of development is on a positive trajectory, and the citizens are set to benefit extensively. However, the natural resources are set to be extensively exploited to ensure sustainable development. References Buckman, R. T. (2013). Latin America 2013. Stryker Post. Christiansen, B. (2014). Handbook of research on economic growth and technological change in Latin America. Hershey, PA: Business Science Reference. Gregg, Davidson, Howard, Alan, Jacobs, Lonnie, Pintabona, Robert, Zernich, Brett . North American tunneling 2014 proceedings. (2014). Place of publication not identified: Soc For Mining Metallurgy. Kesselman, M., Krieger, J., Joseph, W. A., & Abrahamian, E. (2013). Introduction to politics of the developing world. Boston, MA: Wadsworth, Cengage Learning. Organization for Economic Co-operation and Development., & World Bank. (2014). Chiles international scholarship program. Paris: OECD. Silva, S. S., & Chandel, A. K. (2014). Biofuels in Brazil: Fundamental aspects, recent developments, and future perspectives. Tinker, S. M. (2013). The enduring legacy: Oil, culture, and society in Venezuela. Durham [NC: Duke University Press. World Bank Annual Report 2013. (2013). S.l.: s.n. Read More