The vital facts and statistics on Latin America's most significant economies
Argentina
Area 2,766,890 sq km
Population 39.8m
GDP $270bn (PPP: $772bn)
GDP growth 5.7%
GDP per head $6,790 (PPP: $19,420)
Inflation 10.5%
Unemployment 13.6%
External debt $118bn
Briefing
Roughly the size of India, Argentina is the only South American country with a net positive immigration rate – 0.4 per 1,000 population (the UK is about 2.17 per 1,000).
Since the 2001 financial crisis, in which Argentina incurred the largest sovereign debt default in history, the economy has recovered rapidly. By 2006, the country had paid off its entire $10bn debt to the International Monetary Fund (IMF). Argentina now has its first elected female president, Cristina Fernández [de Kirchner], who succeeded her husband at the end of 2007.
The cultural sector in Buenos Aires, the third largest city in Latin America, generates 7% of local output and 4% of jobs. Annual investment in cultural activities is $180m and the city hosts a design month and fashion month every year.
National investment in science and technology was 0.65% of GDP in 2007, set to increase to 1% by 2010.
Buenos Aires is home to the Metropolitan Design Centre (CMD), a public institution created to help companies, designers and entrepreneurs improve their competitiveness on the strength of design and innovation.
Strengths
Rich natural resources, a highly literate population, an export-oriented agricultural sector and a diversified industrial base. Rising foreign investment and exports, falling poverty.
A popular outsourcing destination for the IT industry, due to low wages and investment in skills.
Latin America’s leader in ‘human development’. In 2007 Argentina ranked 38th out of 177 in the UN’s Human Development Index, which takes into account life expectancy, income and education (the UK is 16th).
A world leader in compressed natural gas (CNG) technology. Argentina produces 35% of natural gas vehicles (NGV) worldwide and exports are rising.
A flourishing film industry, which now produces 60 movies annually.
Weaknesses
Double-digit inflation and slowing GDP growth. Billions of dollars are still owed to private investors. Energy shortages have led to rationing of gas supplies to businesses.
Use of drugs in urban areas is increasing.
Brazil
Area 8,514,877 sq km
Population 191.9m
GDP $1.27trn (PPP:$1.97trn)
GDP growth 4.5%
GDP per head $6,600 (PPP: $10,290)
Inflation 4.1%
Unemployment 11.5%
External debt $230.3bn
Briefing
Roughly the size of the mainland US, Brazil is the world’s fourth largest democracy. It is the largest energy consumer in Latin America (10th in the world). It produces enough oil to meet more than 90% of its needs, although due to rising prices many motorists run vehicles on plant-derived alcohol. In November 2007 state-run company Petrobras announced the world’s biggest oil find since 2000.
Workers Party leader Luíz Inácio ‘Lula’ da Silva was elected in 2002 and has survived several corruption scandals. In 2006 he raised the minimum wage by 8.5% – twice the rate of inflation.
Brazil has about 30% of the world’s remaining rainforest but 2005 was the second worst year for deforestation: more than 26,000 sq km. Since then, clearing has fallen by nearly 75% and millions of square miles have been given to traditional communities.
Brazil has scooped numerous design prizes. Architect Marcio Kogan of São Paulo won awards in both best new commercial and residential sections in the 2007 International Design Awards (IDA). Nokia has sent a senior design manager to Rio to set up a studio to explore local influences.
Strengths
A vibrant global image. In 2014, Brazil will be able to sell itself to the world when it hosts football’s World Cup.
A strong export market, thanks to a worldwide boom in goods such as iron ore, sugar, ethanol and soy beans. Brazil has the highest GDP in Latin America and is the world’s ninth largest economy in terms of purchasing power. It joins Russia, India and China as one of the four rapidly developing economies known as BRIC.
Brazil leads Latin America in corporate responsibility. Despite the destruction of the rainforest, it is a world leader in sustainable products.
Weaknesses
At the end of 2007, the government deficit was close to 2% of GDP. This may discourage ratings agencies from elevating its debt to investment grade. It is the only BRIC country still to achieve this rating.
In 1996, a UN study said Brazil had the world’s most unequal wealth distribution. Half the land is owned by 1% of the population. Average income in the north east is 40% of the typical wage in the south east.
The International Finance Corporation ranks Brazil 122nd of 178 economies in terms of ease of doing business. This is discouraging private investment, fuelling corruption and encouraging people to bypass regulations.
Chile
Area 756,950 sq km
Population 16.8m
GDP $178bn (PPP: $241bn)
GDP growth 5.1%
GDP per head $10,590 (PPP: $14,339)
Inflation 3.8%
Unemployment 8.8%
External debt $49.2bn
Briefing
Once Latin America’s strongest economy, Chile plunged into recession in 1999. Under the moderate socialist governments of Richard Lagos and now Michelle Bachelet, it has recovered and grown rapidly.
The economy is highly dependent on natural resources. Chile is the world’s largest producer of copper, which, along with pulp and paper and the fishing industry, accounted for 54% of exports in 2007. Almost 75% of Chileans live in the central heartlands, also home to orchards and vineyards.
Investment in R&D was 0.7% of GDP in 2007. The government has formed a Council on Innovation and Competition to identify and promote new sectors and industries. Tax reforms should encourage investment in innovation. By 2010 the government aims to put more than $2.2bn into projects that encourage the private sector to invest in public assets.
Chile has the highest percentage of broadband subscribers in South America (6% of the population in 2006; Argentina is next on 4%).
Strengths
Record copper prices have bolstered Chile’s economy. The government has been very successful in negotiating free trade agreements – it has 54, giving it access to markets of 3bn people. In 2006 it established one with China, now its second biggest trading partner after the US.
A reputation for strong financial institutions. Chile has the strongest sovereign bond rating in South America.
Poverty has fallen faster than anywhere else in Latin America. Extreme poverty fell by a third between 2003 and 2007. Income distribution is becoming more equal. In 2007, the richest 10% took 38.6% of national income – slightly less than in the US.
Weaknesses
In 2007, price increases were well above expectations. Food was primarily to blame, thanks to international price rises and a harsh winter.
Miners and forestry workers went on strike last year. Unions are protesting over unequal wage distribution.
A shortage of people with technical qualifications. In most countries, the ratio is ten technical graduates to every one professional graduate; in Chile it’s the reverse.
Colombia
Area 1,141,748 sq km
Population 47.6m
GDP $169bn (PPP: $462bn)
GDP growth 5.8%
GDP per head $3,550 (PPP: $9,690)
Inflation 4.5%
Unemployment 13.6%
External debt $43.3bn
Briefing
Colombia is infamous as the world’s leading producer of cocaine. Up to 90% of the cocaine on US streets begins life there. Washington has sent Colombia $5bn in aid since 2000. Much of it is spent destroying coca plantations, but the overall area of growth has not fallen significantly, as farmers simply relocate.
Conflict between the government, leftist guerrillas and right-wing paramilitaries has uprooted 3m people in the past decade.
Álvaro Uribe, elected president in 2002, won a landslide second term in 2006. His success in demobilising the right-wing paramilitaries was marred by revelations about his party’s connections to them.
As a percentage of GDP, Colombia has the second largest IT sector in Latin America, with more than 3,000 software companies.
Strengths
A leading producer of coffee, petroleum, textiles and flowers. Colombia’s economy is growing faster than the regional average. Foreign direct investment and capital inflows have doubled since 2001 and inflation fell from 18% in 1997 to 5% in 2007.
Tourism has nearly tripled in five years. Eco-tourism is thriving, thanks to the many national parks.
Violence and kidnapping are falling. Once the murder capital of the world, Medellín’s murder rate in 2007 was lower than Washington DC.
Weaknesses
Terrorism. Left-wing guerrilla group FARC is estimated to hold more than 700 hostages.
An overburdened transport infrastructure. As citizens feel safer to travel and tourism grows, investment in roads and ports is needed.
Its drug-dominated image. To bring in the 4m visitors needed by 2010 to achieve tourism targets, the country must convince the world of its improved security.
Ecuador
Area 256,370 sq km
Population 13.8m
GDP $45bn (PPP: $65bn)
GDP growth 1.7%
GDP per head $3,260 (PPP: $4,710)
Inflation 3.5%
Unemployment 11%
External debt $17.6bn
Briefing
A relatively small country, Ecuador has the highest population density in South America. About half of all Ecuadorians live in the valleys of the Andean highlands.
Since adopting the US dollar in 2000, Ecuador’s economy has stabilised and grown, but political unrest endures. Street protests have toppled three presidents since 1997. In 2007, Rafael Correa won a mandate to write a new constitution reflecting his ‘21st-century socialism’. He has hinted he will intervene heavily in the economy, including big oil companies.
GDP growth has slowed due to weakness in the oil sector, the main source of foreign revenue since 1973. The country is the world’s largest exporter of bananas.
Strengths
Ample petroleum reserves. Production volumes are predicted to increase.
For its size, Ecuador is the world’s most biodiverse country – with just 0.2% of total land surface, it hosts 18% of bird species. Tourism, much of it eco-tourism, is the third-biggest investment earner.
Environmental awareness is growing. Organisations such as the Rural Reforestation and Progress Network train in sustainable agriculture.
Weaknesses
GDP growth lags far behind other Latin American nations.
Lack of refining capacity means Ecuador must import expensive petrol and lubricants and could be a net loser if oil prices rise further.
Ecuador has fallen behind in environmental conservation and UNESCO has added the Galapagos to its World Heritage in Danger list.
Average time taken to set up a company in Latin American countries
| Average time taken to set up a company in Latin American countries |
Days |
| Argentina |
 32 |
| Brazil |
152 |
| Chile |
27 |
| Colombia |
43 |
| Ecuador |
92 |
| Mexico |
58 |
| Paraguay |
74 |
| Peru |
98 |
| Venezuela |
116 |
Mexico
Area 1,972,550 sq km
Population 110.0m
GDP $900bn (PPP: $1.29trn)
GDP growth 3.1%
GDP per head $8,200 (PPP: $11,840)
Inflation 3.8%
Unemployment 3.9%
External debt $182bn
Briefing
Mexico City is the largest city in Latin America, with a population of 8.4m.
Mexico is the world’s sixth-biggest oil producer – despite owning less than 1% of proven oil resources. It has been classed by Goldman Sachs as one of the ‘Next 11’ up-and-coming countries.
In 2006, Mexico launched itself as a ‘nearsourcing’ destination for UScompanies. Labour costs are much lower and more than 300 flights per day connect the two nations. Mexico is home to 25% of all US citizens abroad, more than any other country.
Like Brazil, Mexico has strong capabilities in the audio-visual sector.
A government programme to promote the IT industry aims to increase its size to $15bn annually by 2013.
The Museum of Mexican Design in Mexico City opened its doors in 2006 and is regarded as one of the region’s finest collections.
Strengths
The Mexican Space Agency (AEXA) was approved by the senate in February 2007. This should bolster areas such as telecommunications and disaster prevention.
The National Autonomous University (UNAM), the largest in Latin America, is a centre for high-quality research in the sciences and the only Latin American university to reach the top 200 in the Times Higher Education Supplement rankings.
Mexico is a surprising forerunner in the Climate Change Performance Index 2008. In 2007, a climate change mitigation strategy was adopted, including a plan to plant 250m trees.
Mexico’s movie industry is booming. In the 2007 Academy Awards, 16 nominations went to films by Mexican directors. The Guadalajara Film Festival is the world’s most prestigious showcase for Spanish-language films.
Weaknesses
The Cantarell oilfield, once the world’s biggest offshore field, is running out. Oil doesn’t dominate the economy to the extent it once did, but it still provides nearly 40% of government revenues.
Paraguay
Area 406,752 sq km
Population 6.2m
GDP $13bn (PPP: $29bn)
GDP growth 4.0%
GDP per head $2,100 (PPP: $4,620)
Inflation 8.8%
Unemployment 16.2%
External Debt $3.6bn
Briefing
Paraguay has been governed by the Colorado Party for 60 years. President Nicanor Duarte Frutos has been in power since 2003 but cannot stand in April’s election. The most popular candidate is Father Fernando Lugo, an admirer of Venezuela’s Hugo Chávez. More than two-fifths of the population live in rural areas and land distribution has caused conflict.
In 2004, attempts to implement free-market reforms prompted land invasions. In 2006, more than 50,000 demonstrators took over the capital, Asunción, to protest against Colorado rule.
For the past five years, Asunción has been ranked as the world’s least expensive capital by Mercer Consulting. But for locals earning an average of £110 per month, prices can be high.
Mobile phone coverage in the country now outstrips the fixed-line network.
Strengths
The Paraná river is the world’s greatest producer of hydroelectric power.
Prices for key exports such as beef and soy beans have risen over the past few years. Exports doubled between 2001 and 2006.
Private investment in mobile phone technology is strong. In 2007, Ericsson won a contract to expand Paraguay’s network.
Weaknesses
Nearly half of Paraguayans live on less than $2 a day and 38% are unemployed or under-employed. Landless families are increasing due to the commercialisation of agriculture, population growth and forest clearances. Many live in shanty towns.
Paraguay has one of Latin America’s highest maternal mortality rates. Up to a third of the population may not have access to regular healthcare.
Paraguay’s black market may be worth five times as much as the official economy.
Any name can be trademarked within Paraguay, even if it is a prominent brand. Calvin Klein had to go to court with the ‘owner’ of his name.
Recipients of foreign direct investment in 2007
| Recipients of foreign direct investment (FDI) in 2007 |
US$bn |
| Brazil |
37.4 |
| Mexico |
36.7 |
| Chile |
15.3 |
| Colombia |
8.2 |
| Argentina |
2.9 |
Peru
Area 1,285,220 sq km
Population 29.2m
GDP $111bn (PPP: $227bn)
GDP growth 5.4%
GDP per head $3,820 (PPP: $7,770)
Inflation 2.3%
Unemployment 8.8%
External debt $27.8bn
Briefing
Around 60% of Peru is tropical rainforest – only Brazil and the Democratic Republic of Congo have more. Peru is one of South America’s biggest coca producers.
A small elite of Spanish descent controls most of the wealth and political power. Foreign investors have given the country a wide berth.
President Alan García is popular because of his government’s quick response to the 2007 earthquake, but has been attacked over plans to sell parts of the Amazon to oil and gas companies. Watchdogs claim much of the timber exported from Peru is illegal, with the authorities’ connivance. In 2007, the US inserted a ‘timber annexe’ in its FTA with Peru, giving it 18 months to stiffen forestry regulations and penalties.
The government has earmarked $3.5bn for investment in infrastructure, healthcare and education. Programmes have been established to aid Andean farmers. But many local governments have proved unable to spend or invest the funds rapidly or effectively.
Government food schemes benefit more than one in three of the population. Average benefit per person is $2 per month.
Strengths
GDP growth is strong and inflation is the lowest in Latin America. Peru ranked among the world’s top ten reformers in a recent report.
Peru is the world’s second largest producer of silver, the third largest of copper and zinc, and fifth largest of gold. Exports from the agriculture, textiles and manufacturing industry have risen.
Steps to protect the rainforest may be paying off. Replanting programmes include one to reforest an area of over 100,000 sq km – about the size of South Korea – that had been almost cleared.
Weaknesses
While the Shining Path and Tupac Amaru guerrilla groups have been largely eradicated, the country is still blighted by murders, gang warfare and the drugs trade.
Progress in poverty reduction, concentrated in the coastal region and Lima, is slow and uneven. Rural areas have seen little change and in the Andean provinces of Apurimac and Ayacucho poverty rates are said to have increased by 10% since 2004.
While Peru’s imports are increasing by more than 20% a year, exports are slowing down – economic growth has been led by increasing demand for products within the country. Many fear this could lead to high inflation.
Uruguay
Area 176,215 sq km
Population 3.3m
GDP $24bn (PPP: $43bn)
GDP growth 4.0%
GDP per head $7,300 (PPP: $12,780)
Inflation 7.2%
Unemployment 12.2%
External debt $10.8bn
Briefing
Uruguay has only one large city – Montevideo, home to roughly 44% of the population, with a further 12% in the surrounding area. According to Mercer Consulting, it’s the Latin American city with the highest quality of life.
In 2004, Tabaré Vázquez of the Broad Front coalition defeated the Colorado Party to become the first left-wing head of state. He announced a $100m emergency plan to help the poor, restored relations with Cuba and promised to investigate the disappearance of opponents of the military dictatorship in the 1970s and 1980s.
Uruguay is known for its advanced education and social security systems and liberal laws on social issues.
It was the first Latin American country to recognise same-sex civil unions.
Uruguay was the first Latin American country to export software. It also exports architectural and design services to Latin America, the US, Asia and Europe.
Strengths
A strong financial and banking industry. The ‘Switzerland of Latin America’ has become a popular outsourcing destination for the insurance industry, among others.
A solid reputation among investors. Uruguay is one of only two South American countries with an investment-grade sovereign bond rating. Its political and labour conditions are rated among the freest on the continent. Transparency International reports that it is the second least corrupt country in Latin America, after Chile.
Weaknesses
Poor relations with Argentina, a key trade partner. Argentine protesters say pollution from a $1.2bn cellulose mill – the biggest single investment in Uruguay’s history – will destroy crops and hurt tourism. The protests have cost Uruguay hundreds of millions of dollars.
Emigration. Up to 20% of Uruguayans now live abroad. During the past two decades, about 500,000 people, mostly young and highly qualified, have left the country, so Uruguay is not reaping the benefits from billions of dollars of investment in education. Combined with a low birth rate and high life expectancy, it means the country has the highest proportion of elderly people in the hemisphere.
Venezuela
Area 916,445 sq km
Population 27.8m
GDP $268bn (PPP: $239bn)
GDP growth 4.0%
GDP per head $9,650 (PPP: $8,620)
Inflation 19.6%
Unemployment 15.1%
External debt $45.4bn
Briefing
Venezuela is one of Latin America’s most urbanised countries, with most people living on the northern coastal strip. The economy is booming thanks to the high price of oil, which accounts for about 90% of export earnings and 30% of GDP.
The World Values Survey consistently ranks Venezuelans among the happiest people in the world.
The controversial Hugo Chávez was elected in 1998, promising ‘21st century socialism’. Having survived a coup, protests, strikes and a referendum on his rule, Chávez won a third term at the end of 2006. In December 2007, a narrow defeat in a referendum meant he must step down in 2013.
Strengths
A network of neighbourhood councils has given the poor a greater sense of citizenship. Government figures say the percentage of the population living in poverty has fallen from 43% in 1999 to 27.5% in 2007.
Eco-tourism is a growing source of revenue. Many large cattle ranches supplement their income with lodges and wildlife excursions. Most have strict conservation standards and some have set up breeding programmes for endangered species.
Weaknesses
The manufacturing sector has declined; the exchange rate favours imports but makes life hard for Venezuela’s manufacturers and farmers. Imports rose four-fold between 2003 and 2007, but GDP expanded by only 50% in this period.
The highest inflation rate in the region. In November 2007, prices rose by 4.4%, taking the annual rate to 21%. Despite controls, food prices rose by 29%. The government fixed prices on more than 100 items in 2003. Many have remained frozen and producers claim they can no longer make a profit.
Income distribution is now less equal. While public spending has increased dramatically, much goes on arms purchases, bureaucracy and infrastructure.
Article first published in Design Council Magazine, Issue 4, Summer 2008