2007%E2%80%9310 recession in South America
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The Great Recession in South America, as it mainly consists of commodity exporters, was not directly affected by the financial turmoil, even if the bond markets of
Brazil Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
,
Argentina Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country in the southern half of South America. Argentina covers an area of , making it the second-largest country in South America after Brazil, th ...
,
Colombia Colombia (, ; ), officially the Republic of Colombia, is a country in South America with insular regions in North America—near Nicaragua's Caribbean coast—as well as in the Pacific Ocean. The Colombian mainland is bordered by the Car ...
and
Venezuela Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...
have been hit. On the other hand, the continent experienced a tough agricultural crisis at the beginning of 2008.
Food prices Food prices refer to the average price level for food across countries, regions and on a global scale. Food prices have an impact on producers and consumers of food. Price levels depend on the food production process, including food marketing an ...
have increased a lot, due to a lack of arable land. One of the main reasons for the loss of agricultural land was the high value offered by the production of
biofuel Biofuel is a fuel that is produced over a short time span from biomass, rather than by the very slow natural processes involved in the formation of fossil fuels, such as oil. According to the United States Energy Information Administration (E ...
s. However, second generation biofuel processes is slowly being implemented in order to extend the amount of biofuel that can be produced
sustainably Specific definitions of sustainability are difficult to agree on and have varied in the literature and over time. The concept of sustainability can be used to guide decisions at the global, national, and individual levels (e.g. sustainable livi ...
by using biomass consisting of the residual non-food parts of current crops, such as stems, leaves and
husk Husk (or hull) in botany is the outer shell or coating of a seed. In the United States, the term husk often refers to the leafy outer covering of an ear of maize (corn) as it grows on the plant. Literally, a husk or hull includes the protective ...
s. Other crops that are not used for food purposes ( non food crops), such as
switchgrass ''Panicum virgatum'', commonly known as switchgrass, is a perennial warm season bunchgrass native to North America, where it occurs naturally from 55°N latitude in Canada southwards into the United States and Mexico. Switchgrass is one of the ...
, grass,
jatropha ''Jatropha'' is a genus of flowering plants in the spurge family, Euphorbiaceae. The name is derived from the Greek words ἰατρός (''iatros''), meaning "physician", and τροφή (''trophe''), meaning "nutrition", hence the common name ...
, whole crop
maize Maize ( ; ''Zea mays'' subsp. ''mays'', from es, maíz after tnq, mahiz), also known as corn (North American and Australian English), is a cereal grain first domesticated by indigenous peoples in southern Mexico about 10,000 years ago. Th ...
, and
miscanthus ''Miscanthus'', or silvergrass, is a genus of African, Eurasian, and Pacific Island plants in the grass family, Poaceae. ; Species * ''Miscanthus changii'' Y.N.Lee – Korea * ''Miscanthus depauperatus'' Merr. – the Philippines * ''Miscanthus ...
could be used to produce biofuels without starving the population that are dependent on food products. Industry waste products (i.e.,
woodchips Woodchips are small- to medium-sized pieces of wood formed by cutting or chipping larger pieces of wood such as trees, branches, logging residues, stumps, roots, and wood waste. Woodchips may be used as a biomass solid fuel and are raw material ...
,
skin Skin is the layer of usually soft, flexible outer tissue covering the body of a vertebrate animal, with three main functions: protection, regulation, and sensation. Other cuticle, animal coverings, such as the arthropod exoskeleton, have diffe ...
s and
pulp Pulp may refer to: * Pulp (fruit), the inner flesh of fruit Engineering * Dissolving pulp, highly purified cellulose used in fibre and film manufacture * Pulp (paper), the fibrous material used to make paper * Molded pulp, a packaging material ...
) from fruit pressing would also replace the need to waste arable land for biofuels; possibly improving the South American economy. Food prices, rising since 2002, ascended from 2006, reaching a peak during the first quarter of 2008. In one year the average price of food rose by about 50%. Then South American countries were affected by both the global slowdown and the decrease in food prices due to the declining demand. In June 2008, the
Economic Commission for Latin America and the Caribbean The United Nations Economic Commission for Latin America and the Caribbean, known as ECLAC, UNECLAC or in Spanish and Portuguese CEPAL, is a United Nations regional commission to encourage economic cooperation. ECLAC includes 46 member States (2 ...
(ECLAC) declared it expected a 4% growth for 2009. However at the end of the year it predicted that the year 2009 would put an end to six years of prosperity during which
Latin America Latin America or * french: Amérique Latine, link=no * ht, Amerik Latin, link=no * pt, América Latina, link=no, name=a, sometimes referred to as LatAm is a large cultural region in the Americas where Romance languages — languages derived f ...
has benefited from high
raw material A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished goods, energy, or intermediate materials that are feedstock for future finished products. As feedst ...
prices.
Production Production may refer to: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (goods and services) * Production as a stati ...
in the region is likely to decline and
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for Work (human activity), w ...
to increase. However, the
Center for Economic and Policy Research The Center for Economic and Policy Research (CEPR) is a progressive American think tank that specializes in economic policy. Based in Washington, D.C. CEPR was co-founded by economists Dean Baker and Mark Weisbrot in 1999. Considered a left-lea ...
has estimated that the region may be able to cope with the global downturn with the right macro-economic policies, as these countries no longer depend on the U.S. economy.


Countries


Brazil

While previously thought immune to the
global financial crisis Global means of or referring to a globe and may also refer to: Entertainment * ''Global'' (Paul van Dyk album), 2003 * ''Global'' (Bunji Garlin album), 2007 * ''Global'' (Humanoid album), 1989 * ''Global'' (Todd Rundgren album), 2015 * Bruno ...
, the
economy of Brazil The economy of Brazil is historically the largest in Latin America and the Southern Hemisphere in nominal terms. The Brazilian economy is the third largest in the Americas. The economy is a middle income developing mixed economy. In 2022, acc ...
shrank 3.5% in the fourth quarter of 2008, with industrial production in January 2009, 17.2% below that of January 2008. Growth for 2008 as a whole was 5.1%. Capital spending fell 9.8% in the fourth quarter while household consumption fell 2% from the third quarter. Another report, in ''
The Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'', showed drop in
gross domestic product Gross domestic product (GDP) is a money, monetary Measurement in economics, measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjec ...
of 13.6% in the 4th quarter of 2008 on an annualized rate and a drop in industrial production for December, 2008 to a rate 18.6% lower than December 2007, with a loss of over 700,000 jobs between November 2008 and February 2009.


Argentina

As the second-largest economy in South America and an important exporter of both machinery and agricultural goods,
Argentina Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country in the southern half of South America. Argentina covers an area of , making it the second-largest country in South America after Brazil, th ...
has been affected by the global slowdown. The country has been seeing slower economic growth recently, seeing its growth rate forecast reduced from nearly 7% in 2008 to 0% in 2009, and due to the steep drop in commodities prices, plus a long, damaging drought in the farm provinces, local economists believe the country may fall into recession. To combat the effects of the financial crisis, the government announced a $32 billion
stimulus A stimulus is something that causes a physiological response. It may refer to: *Stimulation **Stimulus (physiology), something external that influences an activity **Stimulus (psychology), a concept in behaviorism and perception *Stimulus (economi ...
package that is intended to create some 380,000 jobs and favor small and medium-sized businesses, with investment in
infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...
, gas pipelines and electricity generators, as well as the completion by 2010 of a new
nuclear power Nuclear power is the use of nuclear reactions to produce electricity. Nuclear power can be obtained from nuclear fission, nuclear decay and nuclear fusion reactions. Presently, the vast majority of electricity from nuclear power is produced b ...
plant. However, former President
Néstor Kirchner Néstor Carlos Kirchner (; 25 February 195027 October 2010) was an Argentine lawyer and politician who served as the President of Argentina from 2003 to 2007, Governor of Santa Cruz Province from 1991 to 2003, Secretary General of UNASUR and ...
, the husband of the current president,
Cristina Fernández de Kirchner Cristina Elisabet Fernández de Kirchner (; born 19 February 1953), often referred to by her initials CFK, is an Argentine lawyer and politician who has served as the Vice President of Argentina since 2019. She also served as the President ...
and leader of the ruling
Justicialist Party The Justicialist Party ( es, Partido Justicialista, ; abbr. PJ) is a major political party in Argentina, and the largest branch within Peronism. Current president Alberto Fernández belongs to the Justicialist Party (and has, since 2021, served ...
, said in a speech on February 17, 2009, that due to the international crisis, Argentina in 2009 will face "the most difficult year in the last century."


Ecuador

Ecuador Ecuador ( ; ; Quechua: ''Ikwayur''; Shuar: ''Ecuador'' or ''Ekuatur''), officially the Republic of Ecuador ( es, República del Ecuador, which literally translates as "Republic of the Equator"; Quechua: ''Ikwadur Ripuwlika''; Shuar: ''Eku ...
is seeking ways to default on
sovereign debt A country's gross government debt (also called public debt, or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit oc ...
s incurred under the government of
Gustavo Noboa Gustavo José Joaquín Noboa Bejarano (21 August 1937 – 16 February 2021) was an Ecuadorian politician. He served as the 42nd president of Ecuador from 22 January 2000 to 15 January 2003. Previously he served as the Vice President of Ecuador, ...
, which the present government deems to have been incurred illegally. If Ecuador defaults, it will be the first
developing country A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...
to default on sovereign debt since the crisis began.


Caribbean Islands

The
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
(IMF) said as soon as February 2008 that a U.S. slowdown would hurt the economies of the
Caribbean Islands Almost all of the Caribbean islands are in the Caribbean Sea, with only a few in inland lakes. The largest island is Cuba. Other sizable islands include Hispaniola, Jamaica, Puerto Rico and Trinidad and Tobago. Some of the smaller islands are re ...
, especially those in the Eastern Islands. Indeed, the
tourism Tourism is travel for pleasure or business; also the theory and practice of touring (disambiguation), touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tour (disambiguation), tours. Th ...
sector makes up a large part of the Islands' economies, so that they are heavily dependent on the number of U.S. visitors each year. However, the lower
inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...
and
currency depreciation Currency depreciation is the loss of value of a country's currency with respect to one or more foreign reference currencies, typically in a floating exchange rate system in which no official currency value is maintained. Currency appreciation ...
in several Latin American and Caribbean nations can have offset this impact of the financial crisis, sustaining the activity.


Timeline of the Great Recession across all continents


See also

* *
Great Recession in the Americas North America was one of the focal points of the global, Great Recession. While Canada has managed to return its economy nearly to the levels it enjoyed prior to the recession, the United States and Mexico are still under the influence of the wor ...
*
Great Recession in the United States The Great Recession in the United States was a severe financial crisis combined with a deep recession. While the recession officially lasted from December 2007 to June 2009, it took many years for the economy to recover to pre-crisis levels of ...
*


References

{{South America topic Economic history of South America S01 Economic policy in South America 2000s in South America 2010s in South America Economic crises in Argentina Economic crises in Brazil Economy of South America Recessions 2000s economic history 2010s economic history