As lesson 8 stated, many economies in South America are growing at tremendous rates. Much of the continent has tapped into their vast resources, which has led to modernization and expansion of wealth. (PSU, 2021) South America has actually become a region of hope within the global political economy. It has been in South America over the last decade that some of the most interesting and progressive experiments in the conduct of political economy that have been taking place. Brazil, Argentina, Ecuador and Venezuela are just some of the prominent countries where strategies of economic, social, and political development are being explored. (Vivares, 2014)
According to the International Monetary Fund’s latest forecast, prior to 2020, the region’s gross domestic product (GDP) was expected to grow at a rate of 1.8%, however, the region’s economy will instead contract by an estimated 8.1% this year. While recovery is expected next year, its extent is likely to be limited, leaving economic output well below the 2020 level by the end of 2021. The expected revival of the economic activity this year holds promise for a significant rebound in key parts of South America’s economy. As some of the largest economies of the world begin to rapidly reverse the poor performance of last year, global trade has begun to increase. The increase in prices of most items can be good for the economy considering its agro-industrial base and dependence on oil exports. South America was the only region that witnessed an increase in remittances in 2020. Cottani, 2020)
One of the things I wanted to research was the impact of Covid-19 on the South American economy since that is something we are all going through. Latin America is among the most affected regions in terms of number of Covid-19 cases and deaths. (Zaga et al, 2021) This has negatively affected South America both economically and socially. The Covid-19 driven economic crisis was a shock to both aggregate demand and aggregate supply. As countries imposed strict social distancing measures global production, consumption, and investment came to a stop. The decline in activity was larger in labor-intensive service industries than in capital-intensive primary and manufacturing ones. Government intervention will be needed to assess the pandemic’s impact on poverty and inequality in the region. (Cottani, 2020)
References:
Cottani, J. (2020, November 18). The Effects of Covid-19 on Latin America’s Economy. Center for Strategies & International Studies . Retrieved from https://www.csis.org/analysis/effects-covid-19-latin-americas-economy
Penn State University. 2021. OLEAD 410: Lesson 8: South America: Focus on Brazil. Retrieved from: https://psu.instructure.com/courses/2146712/modules/items/32847690
Vivares, E. (2014). Exploring the new south american regionalism (NSAR). The International Political Economy. Retrieved from https://books.google.com/books?hl=en&lr=&id=koYHDAAAQBAJ&oi=fnd&pg=PP1&dq=about%2Bthe%2Bsouth%2Bamerican%2Beconomy%2Bscholarly%2Barticles&ots=ltRX4FFuXi&sig=WbwcEPiwMDJxZ13A3cXD_uijBlE#v=onepage&q&f=false
Zaga, D., Sesmas, D. G., Olaiz, M. B., Mina, A., & Ortiz, A. (2021, July 30). Latin America Economic Outlook. Deloitte Insights. Retrieved from https://www2.deloitte.com/us/en/insights/economy/americas/latin-america-economic-outlook.html