An Exporter’s Intro to South America
South America has twelve nations, ranging in population from 191,908,000 in Brazil to 456,000 in Suriname. All of these nations except two, Bolivia and Paraguay, have a sea coast. The United States is a major trade partner for every country in South America.
Focusing on Emerging Markets
Experts categorize a country’s stage of economic development based on its citizens’ purchasing capacity, commercial infrastructure, and sophistication of the business sector. (1 pp. 256 – 269) The three categories are:
Developing economies are countries with low per capita income, low growth, and limited infrastructure. Such countries in South America include:
- Bolivia
- Ecuador
- Guyana
- Paraguay
- Suriname
- Uruguay. (Uruguay is classified as a developing economy with the potential to become an emerging market.)
Emerging markets were formerly developing economies, but have achieved rapid economic growth. Of 27 emerging markets worldwide, one, Mexico, is in North America, and these six are in South America:
- Argentina
- Brazil
- Chile
- Colombia
- Peru
- Venezuela
Advanced economies have high per-capita income, competitive industries, and well-developed commercial infrastructures. There are no advanced economies in South America.
“Emerging markets are some of the fastest growing economies in the world and represent countries that are experiencing a substantial economic transformation. Such economies are home to approximately 80 percent of the world’s population,” according to S. Tamer Cavusgil, The John W. Byington Endowed Chair in Global Marketing at the Broad School (University of Michigan). “Their tremendous economic expansion has fueled much of the recent wave of globalization. They remain the primary destinations for not only exports but popular markets for direct investment and offshoring activity,” he says. (2)
Most export products target more affluent customers; therefore developing economies are not suitable export markets, and so this report will evaluate only the emerging market economies in South America.
Overview of Emerging South American Markets
South American nations in the emerging market category of economic development include two Atlantic coast countries, Brazil and Argentina; one on the Caribbean, Venezuela; two Pacific coast countries, Peru and Chile; and Colombia, which has both Caribbean and Pacific coastlines.
Click on the following links for more information on each country:
Table 1: Table of per capita GDP (PPP) and Stage of Economic Development for the Nations of South America
Source: GDP data from the CIA World Factbook at https://www.cia.gov/library/publications/the-world-factbook/. Economic Development Status from Cavusgil, Knight, and Riesenberger, International Business, Pearson Hall, 2008, p.258.
|
Name |
GDP (PPP*) per capita (2008 est. in U.S. dollars) |
Ranking by GDP (PPP*) per capita (2008 est. in U.S. dollars) |
Stage of Economic Development |
| Chile | $14,900 |
1 |
Emerging |
| Argentina | $14,200 |
2 |
Emerging |
| Venezuela | $13,500 |
3 |
Emerging |
| Uruguay | $12,200 |
4 |
Developing** |
| Brazil | $10,100 |
5 |
Emerging |
| Colombia | $8,900 |
6 |
Emerging |
| Suriname | $8,900 |
7 |
Developing |
| Peru | $8,400 |
8 |
Emerging |
| Ecuador | $7,500 |
9 |
Developing |
| Bolivia | $4,500 |
10 |
Developing |
| Paraguay | $4,200 |
11 |
Developing |
| Guyana | $3,900 |
12 |
Developing |
| * The GDP (PPP) per capita is Gross Domestic Product (value of all goods and services produced) adjusted based on Purchasing Power Parity (cost of a certain basket of goods) and divided by the total population. (1 p. 267) ** Uruguay is classified as a developing economy with the potential to become an emerging market. (1 p. 261) |
|||
Table 2a: Overview of South American Nations
|
Name |
Area |
Population July 2008 est. |
Currency |
| Argentina | 2,766,890 km2 (1,068,302 sq mi) |
40,677,348 |
Argentine peso |
| Bolivia | 1,098,580 km2 (424,164 sq mi) |
9,247,816 |
Boliviano |
| Brazil | 8,511,965 km2 (3,286,488 sq mi) |
191,908,598 |
Brazilian real |
| Chile | 756,950 km2 (292,260 sq mi) |
16,454,143 |
Chilean peso |
| Colombia | 1,138,910 km2 (439,736 sq mi) |
45,013,674 |
Colombian peso |
| Ecuador | 283,560 km2 (109,483 sq mi) |
13,927,650 |
United States dollar |
| Guyana | 214,999 km2 (83,012 sq mi) |
1,165,673 |
Guyanese dollar |
| Paraguay | 406,750 km2 (157,047 sq mi) |
6,831,306 |
Paraguayan guaraní |
| Peru | 1,285,220 km2 (496,226 sq mi) |
29,180,899 |
Peruvian nuevo sol |
| Suriname | 163,270 km2 (63,039 sq mi) |
475,996 |
Surinamese dollar |
| Uruguay | 176,220 km2 (68,039 sq mi) |
3,477,778 |
Uruguayan peso |
| Venezuela | 912,050 km2 (352,144 sq mi) |
26,414,815 |
Venezuelan bolívar |
Source: Based on table from http://www.wikipedia.com which used data from the CIA World Factbook at https://www.cia.gov/library/publications/the-world-factbook/
Table 2b: Overview of South American Nations
|
Name |
Form of Government |
Capital |
Official Language(s) |
| Argentina | Federal presidential republic |
Buenos Aires | Spanish |
| Bolivia | Republic | La Paz | Spanish, Quechua, Aymara |
| Brazil | Federal presidential republic |
Brasília | Portuguese |
| Chile | Republic | Santiago | Spanish |
| Colombia | Presidential republic |
Bogotá | Spanish |
| Ecuador | Presidential republic | Quito | Spanish |
| Guyana | Semi-presidential republic |
Georgetown | English |
| Paraguay | Constitutional presidential republic | Asunción | Spanish, Guaraní |
| Peru | Presidential republic |
Lima | Spanish, Quechua |
| Suriname | Constitutional democracy | Paramaribo | Dutch |
| Uruguay | Constitutional republic | Montevideo | Spanish |
| Venezuela | Federal presidential republic |
Caracas | Spanish |
Source: Based on table from http://www.wikipedia.com which used data from the CIA World Factbook at https://www.cia.gov/library/publications/the-world-factbook/
For more information on each of these markets, consult these websites (which were used to prepare these summaries):
- U.S. Department of State’s Country Commercial Guides on each country. In about 100 pages, each guide covers these topics: Doing Business in <name of country>; Political and Economic Environment; Selling U.S. Products and Services; Leading Sectors for U.S. Export and Investment; Trade regulations and Standards; Investment Climate; Trade and Project Financing; Business Travel; Contacts, Market Research and Trade Events; and Guide to Our Services.
- The CIA’s World Factbook. Information here is updated bi-weekly and includes summary an statistics regarding the geography, people, government, economy, communications, transportation, and military of each country as well as a summary of “transnational issues.”
- The World Bank’s Country Briefs. These reports begin with encyclopedia-like sections of Quick Facts, General Overview, and Economy and also contain thorough information on development programs and progress.
- Michigan State University’s globalEDGE website. The homepage describes the Country Insights pages as, “…your source for statistical data for 201… In addition to statistics, historical, economic, and political conditions are available”.
- UHY International’s Doing Business Guides (by country). UHY is an international business advisory, consulting and accounting network, with teams operating across 211 offices in 72 countries worldwide. This guides include nut and bolts information about the business environment, foreign investment, setting up a business, labor, taxation, accounting and reporting.
Sources
1. Cavusgil, S. Tamer, Knight, Gary and Riesenberger, John R. International Business: Strategy, Management, and the New Realities. Upper Saddle River, NJ : Pearson/Prentice Hall, 2008. ISBN-13: 978-0-13-173860-7.
2. Eli Broad College of Business, Michigan State University,. Broad College of Business. Michigan State University. [Online] 2007. [Cited: December 7, 2009.] http://www.bus.msu.edu/information/news.cfm?newsid=907.
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