Why Is South America So Poor Compared To North America?

South America’s relative poverty compared to North America is a complex issue stemming from historical, geographical, and institutional factors. This article, brought to you by COMPARE.EDU.VN, explores these factors and offers insights into why this disparity persists, aiming to shed light on economic indicators, resource allocation, and social disparities to understand the wealth gap. By examining the root causes, we can begin to address the challenges and create a path towards economic equity and improved living standards in South America using socioeconomic trends and comparative development analyses.

1. What Are The Historical Legacies Contributing To South America’s Economic Struggles?

South America’s economic struggles are deeply rooted in its colonial past, characterized by extractive institutions designed to benefit European powers rather than foster local development. This resulted in limited economic diversification and a focus on resource extraction, which continues to hinder long-term growth.

The colonial era significantly shaped South America’s economic trajectory. European powers established institutions primarily aimed at extracting wealth, such as precious metals and agricultural products, for their own benefit. This extractive system led to several long-term consequences:

Limited Economic Diversification: Colonial economies focused on producing raw materials for export to Europe, neglecting the development of local industries and manufacturing capabilities.
Dependence on Resource Extraction: This reliance on natural resources made South American economies vulnerable to commodity price fluctuations, hindering stable and sustainable growth.
Unequal Distribution of Wealth and Power: The colonial system created a highly unequal society with a small elite controlling most of the land and resources, while the majority of the population remained impoverished.
Weak Institutional Development: Colonial institutions were designed to serve the interests of the colonizers, not the local population. This led to a lack of strong, accountable governance structures and a weak rule of law.

After independence, South American countries struggled to overcome these legacies. Many continued to rely on resource extraction, and political instability and corruption further hampered economic development.

2. How Does Geography Influence South America’s Economic Development?

Geography significantly impacts South America’s economic development by presenting challenges such as dense rainforests, rugged mountains, and vast distances that hinder transportation and communication. These geographical barriers increase infrastructure costs and limit access to markets, thereby impeding economic integration and growth.

South America’s diverse geography presents both opportunities and challenges for economic development.

The Andes Mountains: This formidable mountain range runs along the western coast of South America, creating significant barriers to transportation and communication. The high altitude and rugged terrain make it difficult and expensive to build roads and railways, limiting access to markets and hindering economic integration.
The Amazon Rainforest: The Amazon rainforest, the largest in the world, covers a vast area of South America. While it is a vital ecosystem, it also presents challenges for development. The dense vegetation, high humidity, and disease vectors make it difficult to build infrastructure and establish settlements.
Deserts: The Atacama Desert in Chile and Peru is one of the driest places on Earth. The lack of water resources limits agricultural production and makes it challenging to support large populations.
Vast Distances: South America is a large continent with significant distances between major population centers. This makes transportation expensive and time-consuming, hindering trade and economic integration.
Tropical Climate: A large portion of South America lies within the tropics, which can lead to challenges such as disease outbreaks (e.g., malaria, dengue fever) and soil degradation.

These geographical challenges have contributed to South America’s economic struggles by increasing infrastructure costs, limiting access to markets, and hindering economic integration.

3. What Role Do Political Instability And Corruption Play In South America’s Poverty?

Political instability and corruption undermine economic progress in South America by deterring investment, weakening institutions, and diverting resources away from essential public services. This creates an environment of uncertainty that hinders long-term planning and sustainable development.

Political instability and corruption have long been significant impediments to economic development in South America. These factors undermine investor confidence, distort resource allocation, and hinder the effective functioning of institutions.

Political Instability: Frequent changes in government, coups, and social unrest create an uncertain environment that discourages investment. Businesses are hesitant to invest in countries where political conditions are unpredictable, as their investments may be at risk. Political instability also disrupts economic activity, as governments may be unable to implement consistent policies or maintain law and order.
Corruption: Corruption takes many forms, including bribery, embezzlement, and patronage. It distorts resource allocation, as funds intended for public projects or social programs are diverted into the pockets of corrupt officials. Corruption also undermines the rule of law, as it creates an environment where laws are not enforced fairly or consistently. This can lead to a lack of accountability and impunity for those who engage in corrupt practices.
Weak Institutions: Political instability and corruption weaken institutions, such as the judiciary, the police, and regulatory agencies. These institutions are essential for enforcing contracts, protecting property rights, and ensuring fair competition. When institutions are weak, it becomes difficult for businesses to operate effectively, and the economy suffers.
Reduced Investment: Political instability and corruption deter both domestic and foreign investment. Investors are reluctant to put their money into countries where there is a high risk of political turmoil or corruption. This lack of investment can stifle economic growth and prevent the creation of jobs.
Diversion of Resources: Corruption diverts resources away from essential public services, such as education, healthcare, and infrastructure. This can have a significant impact on the well-being of the population and hinder long-term economic development.

4. How Has Economic Policy Affected South America’s Economic Performance?

Economic policies such as protectionism and import substitution industrialization have historically hindered South America’s economic performance by limiting competition, stifling innovation, and creating inefficiencies. These policies often led to unsustainable debt levels and vulnerability to external shocks.

Economic policies have played a significant role in shaping South America’s economic performance. Historically, many South American countries adopted policies that, while intended to promote development, ultimately hindered their economic growth.

Protectionism and Import Substitution Industrialization (ISI): In the mid-20th century, many South American countries pursued protectionist policies and ISI strategies. These policies aimed to protect domestic industries from foreign competition by imposing high tariffs and quotas on imported goods. The goal was to promote local manufacturing and reduce reliance on foreign imports. However, these policies often led to inefficiencies, lack of innovation, and high costs for consumers. Protected industries became complacent and were unable to compete in the global market.
Debt Crisis of the 1980s: The ISI policies led to increased government spending and borrowing, which contributed to the debt crisis of the 1980s. Many South American countries were unable to repay their foreign debts, leading to economic stagnation and hardship.
Neoliberal Reforms: In response to the debt crisis, many South American countries adopted neoliberal reforms in the 1990s. These reforms included privatization of state-owned enterprises, deregulation, and trade liberalization. While these reforms led to some improvements in economic efficiency and growth, they also had negative consequences, such as increased inequality and social unrest.
Commodity Dependence: South America’s heavy reliance on commodity exports has made it vulnerable to fluctuations in global commodity prices. When commodity prices are high, South American economies tend to boom, but when prices fall, they experience economic hardship. This boom-and-bust cycle has hindered long-term sustainable development.
Lack of Diversification: Many South American economies have failed to diversify their production and export base. This lack of diversification makes them more vulnerable to external shocks and limits their growth potential.

5. How Do Social Inequalities Contribute To South America’s Persistent Poverty?

High levels of social inequality in South America limit economic mobility, restrict access to education and healthcare, and perpetuate poverty across generations. These inequalities undermine social cohesion and hinder inclusive economic growth.

Social inequalities are a pervasive issue in South America and contribute significantly to its persistent poverty. These inequalities manifest in various forms, including income disparities, unequal access to education and healthcare, and discrimination based on race, ethnicity, and gender.

Income Inequality: South America is one of the most unequal regions in the world in terms of income distribution. A small percentage of the population controls a large share of the wealth, while a significant portion lives in poverty. This income inequality limits economic mobility and perpetuates poverty across generations.
Unequal Access to Education: Access to quality education is often limited for the poor and marginalized populations in South America. Children from low-income families may not have access to good schools, qualified teachers, or resources needed to succeed academically. This lack of educational opportunities limits their future prospects and perpetuates the cycle of poverty.
Unequal Access to Healthcare: Access to healthcare is also unequal in South America. The poor and marginalized populations often lack access to basic healthcare services, leading to higher rates of illness and mortality. This can have a significant impact on their ability to work and earn a living.
Discrimination: Discrimination based on race, ethnicity, and gender is also a significant issue in South America. Indigenous populations, Afro-descendants, and women often face discrimination in education, employment, and other areas of life. This discrimination limits their opportunities and perpetuates poverty.
Limited Social Mobility: High levels of social inequality in South America limit social mobility. It is difficult for people from low-income families to climb the economic ladder, regardless of their talent or effort. This lack of social mobility can lead to frustration and resentment, and can undermine social cohesion.

6. What Impact Does Resource Dependence Have On South America’s Economies?

Resource dependence exposes South America’s economies to volatile global commodity markets, leading to boom-and-bust cycles that hinder stable economic growth. This dependence also crowds out investment in other sectors and delays diversification.

Resource dependence has a profound impact on South America’s economies, leading to boom-and-bust cycles, crowding out investment in other sectors, and hindering diversification.

Boom-and-Bust Cycles: South America’s economies are highly dependent on the export of natural resources, such as oil, minerals, and agricultural products. When global commodity prices are high, these economies experience a boom, with increased revenues and economic growth. However, when commodity prices fall, these economies experience a bust, with decreased revenues, economic stagnation, and social unrest.
Dutch Disease: Resource dependence can lead to a phenomenon known as Dutch Disease, where the booming resource sector crowds out other sectors of the economy. The influx of foreign currency from resource exports can lead to an appreciation of the exchange rate, making other exports more expensive and less competitive. This can hinder the development of manufacturing and other industries.
Lack of Diversification: Resource dependence can also hinder economic diversification. When a country relies heavily on resource exports, there is less incentive to invest in other sectors of the economy. This lack of diversification makes the economy more vulnerable to external shocks and limits its growth potential.
Environmental Degradation: The extraction and export of natural resources can lead to environmental degradation, such as deforestation, pollution, and depletion of natural resources. This can have negative consequences for the environment and the health of the population.
Governance Challenges: Resource wealth can also lead to governance challenges, such as corruption, rent-seeking, and political instability. The control of valuable natural resources can create incentives for corruption and rent-seeking, as individuals and groups compete for access to these resources.

7. How Do Education And Human Capital Affect South America’s Economic Development?

Inadequate education and human capital limit South America’s ability to innovate, compete globally, and develop higher-value industries. Improving education and skills training is crucial for fostering sustainable economic growth and reducing poverty.

Education and human capital are essential for economic development. They enable individuals to acquire the skills and knowledge necessary to participate in the workforce, innovate, and contribute to economic growth.

Low Levels of Education: South America has historically lagged behind other regions in terms of education levels. Many South American countries have high rates of illiteracy and low levels of educational attainment. This lack of education limits the ability of individuals to find good jobs, start businesses, and participate in the knowledge economy.
Poor Quality of Education: Even when individuals do have access to education, the quality is often poor. Many schools lack adequate resources, qualified teachers, and modern teaching methods. This results in students who are not well-prepared for the workforce or higher education.
Skills Gap: There is a significant skills gap in South America. Many employers report that they cannot find workers with the skills they need to fill open positions. This skills gap hinders economic growth and prevents South American countries from competing in the global market.
Lack of Investment in Human Capital: South American countries have historically underinvested in education and training. This lack of investment has contributed to the low levels of education and the skills gap.
Brain Drain: Many highly educated and skilled South Americans emigrate to other countries in search of better opportunities. This brain drain deprives South American countries of valuable human capital and hinders their economic development.

8. What Are The Key Institutional Weaknesses In South America’s Economic Framework?

Key institutional weaknesses in South America include weak rule of law, corruption, inefficient bureaucracy, and lack of secure property rights. These issues undermine investor confidence, discourage entrepreneurship, and hinder long-term economic development.

Strong and effective institutions are essential for economic development. They provide the framework for a well-functioning market economy, protect property rights, enforce contracts, and ensure fair competition.

Weak Rule of Law: The rule of law is weak in many South American countries. This means that laws are not always enforced fairly or consistently, and that there is a lack of accountability for those who violate the law. This can lead to corruption, crime, and a lack of investor confidence.
Corruption: Corruption is a widespread problem in South America. It takes many forms, including bribery, embezzlement, and patronage. Corruption distorts resource allocation, undermines the rule of law, and hinders economic development.
Inefficient Bureaucracy: The bureaucracy in many South American countries is inefficient and burdensome. This can make it difficult for businesses to obtain permits, licenses, and other necessary approvals. This can discourage entrepreneurship and hinder economic growth.
Lack of Secure Property Rights: Property rights are not always secure in South America. This means that individuals and businesses may not be able to own and control their property without fear of expropriation or other forms of interference. This can discourage investment and hinder economic development.
Weak Contract Enforcement: Contract enforcement is weak in many South American countries. This means that it can be difficult to resolve disputes and enforce contracts. This can discourage trade and investment and hinder economic development.

9. How Do Trade Policies Affect South America’s Economic Integration And Growth?

Restrictive trade policies and a lack of regional integration have limited South America’s ability to access global markets and benefit from economies of scale. Promoting trade liberalization and deeper regional integration is essential for boosting economic growth.

Trade policies play a crucial role in shaping economic integration and growth. Open and liberal trade policies can promote economic growth by increasing competition, encouraging innovation, and facilitating the transfer of technology and knowledge.

Protectionism: Historically, many South American countries have pursued protectionist trade policies, imposing high tariffs and other barriers to trade. These policies were intended to protect domestic industries from foreign competition, but they often led to inefficiencies, lack of innovation, and high costs for consumers.
Lack of Regional Integration: South America has been slow to integrate its economies regionally. While there have been some efforts to promote regional trade agreements, such as Mercosur and the Andean Community, these agreements have often been hampered by political disagreements and protectionist policies.
Dependence on Commodity Exports: South America’s heavy reliance on commodity exports has made it vulnerable to fluctuations in global commodity prices. When commodity prices are high, South American economies tend to boom, but when prices fall, they experience economic hardship. This boom-and-bust cycle has hindered long-term sustainable development.
Lack of Diversification: Many South American economies have failed to diversify their production and export base. This lack of diversification makes them more vulnerable to external shocks and limits their growth potential.
High Transportation Costs: High transportation costs can hinder trade and economic integration. South America’s rugged terrain and long distances make transportation expensive and time-consuming.

10. What Are The Success Stories And Lessons Learned From Other Developing Regions?

Success stories from other developing regions, such as East Asia, demonstrate the importance of export-oriented policies, investment in education, and strong institutions. Applying these lessons could help South America accelerate its economic development.

East Asia’s economic transformation provides valuable lessons for South America. Countries like South Korea, Singapore, and Taiwan have achieved remarkable economic growth by adopting policies that promoted export-oriented manufacturing, invested heavily in education and human capital, and developed strong and efficient institutions.

Export-Oriented Policies: East Asian countries embraced export-oriented policies, focusing on producing goods for export to the global market. This forced them to become competitive and efficient, and it allowed them to benefit from economies of scale.
Investment in Education and Human Capital: East Asian countries invested heavily in education and training, creating a highly skilled workforce that could compete in the global market.
Strong Institutions: East Asian countries developed strong and efficient institutions, including a well-functioning legal system, a stable macroeconomic environment, and a transparent and accountable government.
Land Reform: Some East Asian countries implemented land reform programs, which redistributed land from large landowners to small farmers. This increased agricultural productivity and reduced inequality.
Government Support for Industry: East Asian governments played an active role in supporting industry, providing subsidies, tax breaks, and other incentives to promote economic development.

These factors contributed to East Asia’s economic success, and they offer valuable lessons for South America. By adopting similar policies, South America could potentially accelerate its economic development and improve the living standards of its population.

11. What Specific Policies Can South America Implement To Improve Its Economic Outlook?

South America can improve its economic outlook by implementing policies that promote diversification, enhance education, strengthen institutions, and foster greater regional integration. These measures can create a more stable and prosperous economic environment.

To improve its economic outlook, South America can implement a range of specific policies across various areas.

Promote Economic Diversification: Reduce reliance on commodity exports by investing in manufacturing, services, and technology sectors. Offer incentives for businesses to develop new products and services, and support research and development to drive innovation.
Enhance Education and Human Capital: Increase investment in education at all levels, from primary school to higher education. Improve the quality of education by training teachers, providing resources, and modernizing teaching methods. Promote vocational training to equip workers with the skills needed for the job market.
Strengthen Institutions: Improve the rule of law by ensuring that laws are enforced fairly and consistently. Combat corruption by increasing transparency and accountability. Streamline bureaucracy to make it easier for businesses to operate.
Foster Regional Integration: Deepen regional trade agreements to increase trade and investment within South America. Harmonize regulations and standards to facilitate cross-border business. Invest in infrastructure to improve transportation and communication links between countries.
Attract Foreign Investment: Create a welcoming environment for foreign investment by reducing regulatory burdens and protecting property rights. Offer incentives for foreign companies to invest in South America, such as tax breaks and investment guarantees.
Promote Entrepreneurship: Support small and medium-sized enterprises (SMEs) by providing access to finance, training, and technical assistance. Create a regulatory environment that is conducive to entrepreneurship.
Manage Commodity Revenues Wisely: Establish sovereign wealth funds to save commodity revenues for future generations. Use commodity revenues to invest in education, infrastructure, and other long-term development projects.
Address Social Inequality: Implement policies to reduce income inequality, such as progressive taxation and social safety nets. Improve access to education and healthcare for marginalized populations.

12. How Can International Cooperation Assist South America’s Economic Development?

International cooperation can assist South America’s economic development through financial aid, technical assistance, and knowledge sharing. These partnerships can help strengthen institutions, promote sustainable development, and improve overall economic stability.

International cooperation can play a crucial role in assisting South America’s economic development through various channels.

Financial Aid: Developed countries and international organizations can provide financial aid to South American countries to support economic development projects. This aid can be used to finance infrastructure projects, education programs, healthcare initiatives, and other development priorities.
Technical Assistance: Developed countries can provide technical assistance to South American countries to help them improve their institutions, policies, and practices. This assistance can include training for government officials, advice on economic policy, and support for regulatory reform.
Knowledge Sharing: Developed countries can share their knowledge and experience with South American countries to help them address their economic challenges. This can include sharing best practices in areas such as education, healthcare, and economic development.
Trade and Investment: Developed countries can promote trade and investment with South American countries by reducing trade barriers and providing investment guarantees. This can help South American countries to increase their exports and attract foreign investment.
Debt Relief: Developed countries can provide debt relief to South American countries that are struggling to repay their debts. This can free up resources for economic development and help to reduce poverty.
Capacity Building: Developed countries can support capacity building in South American countries by providing training and resources to help them develop their human capital and institutions. This can help South American countries to become more self-sufficient and less reliant on foreign aid.
Sustainable Development: International cooperation can promote sustainable development in South America by supporting projects that protect the environment, promote renewable energy, and improve resource management.

13. What Role Do Natural Resources Play In South America’s Economic Future?

While natural resources can provide significant revenue, South America must avoid over-reliance and focus on value addition, diversification, and sustainable management to ensure long-term economic prosperity and environmental protection.

Natural resources play a complex role in South America’s economic future, offering both opportunities and challenges.

Economic Opportunities: South America is rich in natural resources, including oil, minerals, and agricultural products. These resources can generate significant revenue for South American countries, which can be used to finance economic development projects, reduce poverty, and improve living standards.
Boom-and-Bust Cycles: Reliance on natural resources can lead to boom-and-bust cycles, as commodity prices fluctuate on the global market. When commodity prices are high, South American economies tend to boom, but when prices fall, they experience economic hardship.
Dutch Disease: Resource dependence can lead to Dutch Disease, where the booming resource sector crowds out other sectors of the economy. The influx of foreign currency from resource exports can lead to an appreciation of the exchange rate, making other exports more expensive and less competitive.
Environmental Degradation: The extraction and export of natural resources can lead to environmental degradation, such as deforestation, pollution, and depletion of natural resources.
Governance Challenges: Resource wealth can lead to governance challenges, such as corruption, rent-seeking, and political instability.

To ensure that natural resources contribute to long-term economic prosperity and environmental protection, South American countries need to adopt policies that promote value addition, diversification, and sustainable management.

Value Addition: South American countries should focus on processing and manufacturing natural resources locally, rather than simply exporting them as raw materials. This can create jobs, increase export revenues, and reduce reliance on commodity price fluctuations.
Diversification: South American countries should diversify their economies by investing in manufacturing, services, and technology sectors. This can reduce their vulnerability to external shocks and promote sustainable economic growth.
Sustainable Management: South American countries should manage their natural resources sustainably, ensuring that they are not depleted or degraded. This can include implementing environmental regulations, promoting responsible mining practices, and investing in renewable energy.

14. How Can South America Leverage Technology And Innovation For Economic Growth?

Leveraging technology and innovation can transform South America’s economies by increasing productivity, fostering new industries, and improving competitiveness. Investing in digital infrastructure, promoting tech education, and supporting innovation hubs are essential steps.

Technology and innovation are powerful drivers of economic growth. They can increase productivity, foster new industries, and improve competitiveness.

Digital Infrastructure: South American countries need to invest in digital infrastructure, such as broadband internet and mobile networks, to connect businesses and individuals to the global economy.
Tech Education: South American countries need to promote tech education, providing training and resources to help individuals develop the skills needed for the digital economy.
Innovation Hubs: South American countries need to support innovation hubs, where entrepreneurs, researchers, and investors can come together to develop new technologies and businesses.
Government Support: South American governments can play a role in supporting technology and innovation by providing funding for research and development, offering tax breaks for tech companies, and creating a regulatory environment that is conducive to innovation.
Collaboration: South American countries can collaborate with each other and with developed countries to share knowledge and best practices in technology and innovation.

By leveraging technology and innovation, South America can transform its economies, increase productivity, and improve its competitiveness in the global market.

15. What Are The Socioeconomic Factors That Must Be Addressed To Reduce Poverty In South America?

Addressing poverty in South America requires tackling socioeconomic factors such as inequality, access to education and healthcare, and social inclusion. Policies that promote equitable distribution of resources and opportunities are essential for sustainable poverty reduction.

Poverty is a complex issue with deep roots in socioeconomic factors. Addressing poverty requires a multi-faceted approach that tackles these underlying factors.

Inequality: Reducing inequality is essential for poverty reduction. This can be achieved through progressive taxation, social safety nets, and policies that promote equal access to education, healthcare, and other essential services.
Access to Education: Improving access to quality education is crucial for breaking the cycle of poverty. This can be achieved by increasing investment in education, improving the quality of schools, and providing scholarships and other forms of financial assistance to low-income students.
Access to Healthcare: Improving access to healthcare is essential for preventing illness and improving the health of the population. This can be achieved by increasing investment in healthcare infrastructure, training healthcare professionals, and providing affordable healthcare services to all.
Social Inclusion: Promoting social inclusion is essential for ensuring that all members of society have the opportunity to participate in economic and social life. This can be achieved by combating discrimination, promoting gender equality, and empowering marginalized groups.
Job Creation: Creating jobs is essential for providing people with the income they need to escape poverty. This can be achieved by promoting economic growth, supporting entrepreneurship, and investing in skills training.
Social Protection: Providing social protection is essential for protecting vulnerable populations from poverty. This can be achieved through social safety nets, such as unemployment insurance, cash transfers, and food assistance programs.

By addressing these socioeconomic factors, South America can make significant progress in reducing poverty and improving the living standards of its population.

South America’s economic journey is complex and multifaceted, shaped by historical legacies, geographical challenges, and policy choices. While the region faces significant hurdles in achieving economic parity with North America, understanding these factors is crucial for devising effective strategies for sustainable development. COMPARE.EDU.VN provides comprehensive insights and comparisons to help you make informed decisions and understand the dynamics shaping the world around us.

Ready to delve deeper into comparative analyses and make informed decisions? Visit COMPARE.EDU.VN today. Our platform offers detailed comparisons and expert insights to guide your choices, whether you’re evaluating educational opportunities or making purchasing decisions. Let compare.edu.vn be your trusted source for comprehensive comparisons. Contact us at 333 Comparison Plaza, Choice City, CA 90210, United States or reach out via WhatsApp at +1 (626) 555-9090.

FAQ: South America’s Economic Challenges

1. Why is South America considered poorer than North America?

South America’s relative poverty stems from a combination of factors, including a history of colonial exploitation, challenging geography, political instability, and dependence on commodity exports.

2. How did colonialism affect South America’s economic development?

Colonialism led to extractive institutions that focused on resource extraction for European powers, hindering local industrial development and creating lasting economic disparities.

3. What geographical challenges does South America face?

South America’s geography, characterized by dense rainforests, rugged mountains, and vast distances, increases infrastructure costs and limits access to markets.

4. How does political instability contribute to poverty in South America?

Political instability deters investment, weakens institutions, and diverts resources away from essential public services, creating economic uncertainty.

5. What impact do economic policies have on South America’s economy?

Historically, protectionist policies and import substitution industrialization limited competition and stifled innovation, leading to unsustainable debt levels.

6. How do social inequalities perpetuate poverty in South America?

High levels of social inequality limit economic mobility, restrict access to education and healthcare, and perpetuate poverty across generations.

7. What is the impact of resource dependence on South American economies?

Resource dependence exposes South America to volatile global commodity markets, hindering stable economic growth and delaying diversification.

8. How do education and human capital affect South America’s economic development?

Inadequate education and human capital limit South America’s ability to innovate, compete globally, and develop higher-value industries.

9. What institutional weaknesses exist in South America’s economic framework?

Key weaknesses include a weak rule of law, corruption, inefficient bureaucracy, and lack of secure property rights, undermining investor confidence.

10. What policies can South America implement to improve its economic outlook?

Policies promoting diversification, education enhancement, institutional strengthening, and greater regional integration can create a more stable and prosperous economic environment.