The economy of the South American continent represents the economy of the 12 nations and 3 territories of the continent housing a total population of about 410 million. Initially, after attaining independence, most South American nations used the Import Substitution economic policy. The policy was implemented from the 1930s to the 1980s. It was implemented with the objective of growing domestic businesses which were at that time not competitive and at par with international industries. However, the policy led to a debt crisis in the continent and the countries fell farther behind the Western countries in economic development.
The real growth of the South American economies began in the 1990s when the countries adopted the Free-Market economy system which helped the countries overcome the debt crisis. At present, agriculture, mining, and forestry are the major South American industries.
Located on the northern coast of South America, Venezuela is the fourth richest nation in South America both in terms of GDP per capita at $15,102 and GDP (PPP) at $468.6 billion USD. The country is bordered by Colombia, Brazil, and Guyana. Trinidad and Tobago lie offshore to the north-east. The country encompasses an area of 916,445 square km and houses a population of 31 million.
The petroleum and the manufacturing sectors form the pillars of the Venezuelan economy. Almost 50% of the country’s GDP is from the export of petroleum which accounts for 95% of total exports. The country’s economy suffered a major setback in the 1980’s due to the collapse of oil prices. Other major industries and exports of the country include cement, steel, automobiles, electronics, and aluminum. The agricultural sector in the country only contributes about 3% to the GDP. The US is the biggest trading partner of the country.
Suriname, located on South America’s northeastern Atlantic coast, occupies an area of 165,000 square km and houses a population of 566,000. Brazil, Guyana, and French Guiana border Suriname. The country has the fifth highest GDP per capita among the South American nation at $15,179 USD. The country, however, ranks 11 among the 12 countries of the continent in terms of GDP (PPP).
The bauxite industry dominates Suriname’s economy and accounts for 15% of the country’s GDP and 70% of the export revenue. Shrimp, bananas, and rice are the other major exports of Suriname. The country also has significant oil and gold reserves which are still underexploited.
As mentioned in the table below, the top 5 South American countries by GDP (PPP) include Brazil, Argentina, Colombia, Venezuela, and Chile. Since the economies of the three countries in the list are already discussed above, here is the list of the remaining two five countries in the top 5 by GDP (PPP).
Colombia, located in the northwest of South America, is the third richest country in South America in terms of GDP (PPP). The country occupies an area of about 1,141,748 square km and has a population of 42,888,592 (as of 2005).
The main export item of Colombia which makes up 45% of all exports of the country is petroleum. The next big sector is the manufacturing industry. The country also has the world’s fastest growing information technology sector and the largest shipbuilding industry outside Asia. The country is going through a period of economic boom with a rapid increase in GDP and decrease in poverty levels.
Brazil, the largest country in South America by both size and population, is also the richest country in the continent in terms of GDP (PPP) at $3,081billion USD. The country is the fourth richest nation in South America by GDP per capita at $15,211 USD. Brazil has a long coastline along the Atlantic Ocean and is bounded by most of the South American countries with the exception of Chile and Ecuador.
The economy of Brazil is the 8th largest in the world by GDP (PPP) and can be described as an inward-oriented economy. The country’s economy suffered a major setback in 2013 and entered a recession the next year. It is currently recovering from the recession. The service sector contributes 67.0% of the GDP and the industrial sector accounts for 27.5%. Agriculture accounts for a mere 5.5% of the country’s GDP.
Spanning an area of 2,780,400 square km, Argentina is the 8th largest country in the world. It is the third richest country in South America in terms of GDP per capita at $20,170 USD and the second largest country in the continent by GDP (PPP) at $879.4 billion USD. The country is located in the continent’s southern part where it is bordered by Chile, Brazil, Bolivia, Paraguay, and Uruguay. It has an extensive coastline along the Atlantic Ocean to the east. As of 2010, the country had a population of 40,117,096.
The economy of Argentina is based on the country’s rich natural resources, export-oriented agriculture, an educated population, and a diversified industrial sector. The economic performance of the country has gone through several ups and downs in the past few decades. Currently, it is classified as a middle emerging economy. High rates of inflation, unequal distribution of wealth, and a high technical debt are barriers to the economic growth of the nation. The leading industries in Venezuela include beverages, motor vehicles, and auto parts, leather, textiles, food processing, pharmaceuticals, cement, furniture, etc.
Uruguay is the second richest South American nation in terms of GDP per capita which is $21,570 USD and it ranks 9th in the continent in terms of GDP (PPP) at $73.25 billion USD. The country is located in South America’s southeastern region where it occupies an area of about 176,000 square km. The population of the country is 3.42 million.
Uruguay has a stable economy with a literate workforce and an export-oriented agricultural sector serving as the pillars of the country’s economy. Beef and wool are the most powerful export-oriented industries in the country. Some mining activities are also carried out. Plastics are the most significant manufactured exports of the country. The telecommunications sector is also well-developed. Travel and tourism contribute to 9.4% of the country's GDP.
The richest economy in terms of GDP per capita ($23,969 USD) in South America, Chile occupies a long and narrow strip of territory between the Pacific Ocean and the Andes mountain range in southern South America. It is the fifth richest country in the continent in terms of GDP (PPP) at $436.1 billion USD. Peru, Bolivia, and Argentina are the immediate neighbors of Chile. The country covers an area of about 756,096.3 square km. As of 2012, it has a population of 16,341,929.
Chile is one of the most prosperous and stable economies of the continent and the World Bank ranks the Chilean economy as a high-income economy. It is the world’s 30th most competitive country. As of 2012, the largest economic sectors by GDP in Chile are mining, business and personal services, wholesale, retail trade, and manufacturing. Only 4.9% of the GDP is contributed by the agricultural and allied sectors.
The Richest Countries In South America
|Rank||World Rank||Nation||2016 (IMF) GDP per capita||World Rank||Country||2016 GDP (PPP) billions of USD|