News around the World - South America

South America, home to 12 countries and 385 million people that speak over 300 different languages. From the world’s most biodiverse rainforest on fire to drug-related goods being found on a daily basis, the current situation in South America is less than optimum, but possibly even more dramatic is the current socioeconomic and political series of events unfolding in the continent

South America as a whole has recently come out of an economic crisis and started to recover in 2017. However, current situations throughout Latin America have again begun to deteriorate, in Peru, congress has been dissolved, while Honduras has been accused of accepting bribes and protests in Haiti threaten to overthrow the government. This political unease throughout the continent has been summed up by the head of the Inter-American Dialogue who stated: “Wherever you look, there's a lot of uncertainty and turmoil.” This economic unrest comes after a decade of overall success throughout South America, in the first decade of the century, in which the middle class has experienced a rapid expansion leading to an increase in the size of the work force and thus an overall increase in output. 

The current situation comes as a result of a stall in the economies of South America, "We're seeing a serious downturn in economic growth just about everywhere.” This stall in growth is due to the nature of exports that are coming out of South America, as most of the countries specialise in agricultural products, which are generally volatile in price, the economy’s growth aligns itself with the volatility of the cost of goods that it sells. This can be seen most dramatically in Venezuela, where the economy has halved in output since 2013 as a result of the drop in oil prices. This has led to over 10% of the population leaving the country which only further strains the economy.

 

Besides the economic downturn, the events currently unfolding in South America can also be pinned on the weak political institutions in place throughout the continent. There is an overall lack of regulation and the justice systems in place are extremely weak. This combination encourages corruption throughout countries, as can be seen in Peru, where the majority of congress is led by a party loyal to a former corrupt president. Citizens throughout Latin America, in an effort to combat this corruption, have taken to the streets in order to protest, but this is generally in vain. To add to the growing instability, the incredible amounts of illegal money from drugs and other goods that floats throughout economies in the continent further intensify the corruption and have led to a rise in violence throughout countries.

Overall, the political instability, economic downturn and poor management by regional and national institutions have led to worsening conditions throughout most of South America and the fact that all these countries are situated in close proximity, only adds to the threat of further detriment due to the ease of an economic flow over effect between nations.

Author - Wenkang Nathan Du