The continent of South America has experienced remarkable economic growth since the beginning of the 20th century. Most of the economies in this region are among the world’s fastest developing economies. However, despite the growth, most countries still suffer from significant unemployment and poverty rates. The weakest economies in the continent on the basis of GDP per capita are listed below:
Bolivia is the poorest country in South America in terms of GDP per capita. The per capita income in the country was $7,190 in 2016 according to the records of the International Monetary Fund. The nation is located in the western-central part of the continent. Santa Cruz de la Sierra is the financial and economic hub of Bolivia. The landlocked geography of the country puts it at an economic disadvantage. The 2010 Index of Economic Freedom rated the country as a ‘Repressed’ economy. The Bolivian economy suffered a major setback in the 1980’s when prices of tin fell, weakening the economy since tin mining was an important source of income in the country. Recently, however, the economy has bounced back and is experiencing a period of growth. Sound economic policies implemented by the Bolivian government has encouraged such growth.
The economy of Guyana is the second weakest in the continent. It had a GDP per capita of $7,919 in 2016. The country is located in the northern part of mainland South America but is also often listed as a Caribbean country due to its close cultural, political, and historical ties with the Caribbean region. Crop production, mining, and fishing are the main economic activities in the country. The economy of the country suffers from a shortage of skilled labor and adequate infrastructure. A significant amount of external debt, issues in the sugar and bauxite industries, and low prices of major commodities produced in the country all added to the economic slowdown of Guyana. However, since 1999, the Guyanese economy has slightly recovered and now has a better environment for business and investment.
Paraguay is the third poorest country in South America. The GDP per capita here was $9,353 in 2016. It is also a landlocked country like Bolivia and hence deprived of the economic benefits associated with an easy access to the sea. This centrally located country spreads out on either bank of the north to south flowing Paraguay River. Despite having one of the lowest per capita GDP’s in the continent, Paraguay is a rapidly developing economy. The economy has a very low inflation rate and has access to clean and renewable energy resources. The country experienced an average economic growth of 7.2% per annum between 1970 and 2013 making it the continents most rapidly developing economy.
Located in the northwestern part of South America, Ecuador has the fourth lowest GDP per capita in the continent at $11,036. The middle-income, developing economy of the country highly relies on agricultural commodities and petroleum for its survival. The GDP of the country exhibited an average annual growth of 4.3% between 2007 and 2012. Unemployment rates have also fallen significantly in the past few years. In 2001, the extreme poverty rate was at 40% but decreased to 17.4% by 2011.
Peru had the fifth lowest GDP per capita in 2016 at $13,018. It is an upper middle-income country with one of the world’s most rapidly growing economies. Although it still has one of the lowest GDP per capita in the continent, the Peruvian economy has an HDI of 0.74 which above-average in the region. The economy of the country is heavily reliant on exports. Self-sustainability and a more uniform distribution of income are encouraged in the country. As of 2015, 9% of the Peruvian population lives in extreme poverty. The unemployment rate has decreased steadily over the years.
The Poorest Countries In South America
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