Great Recession in South America

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Great Recession
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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, Argentina, Colombia and Venezuela have been hit.[1]

On the other hand, the continent experienced a tough agricultural crisis at the beginning of 2008.[2] Food prices 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 biofuels. However, second generation biofuel processes is slowly being implemented in order to extend the amount of biofuel that can be produced sustainably by using biomass consisting of the residual non-food parts of current crops, such as stems, leaves and husks.[3] Other crops that are not used for food purposes (non food crops), such as switchgrass, grass, jatropha, whole crop maize, and miscanthus could be used to produce biofuels without starving the population that are dependent on food products.[3] Industry waste products (i.e., woodchips, skins and pulp) from fruit pressing would also replace the need to waste arable land for biofuels; possibly improving the South American economy.[3] 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.[4] In June 2008, the Economic Commission for Latin America and the Caribbean (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 has benefited from high raw material prices.[5] Production in the region is likely to decline and unemployment to increase.[6][7] However, the Center for Economic and Policy Research 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.[8]

  1. ^ ""Subprime": lejos de A. Latina" (in Spanish). BBC Mundo. August 1, 2007. Archived from the original on 2009-01-13. Retrieved 2010-01-05.
  2. ^ Poverty Declines Slightly in Latin America and the Caribbean, in Spite of Global Financial Crisis Archived 2011-07-20 at the Wayback Machine, ECLAC Notes Nº 59 (9 December 2008)
  3. ^ a b c Oliver R. Inderwildi, David A. King (2009). "Quo Vadis Biofuels". Energy & Environmental Science. 2 (4): 343. doi:10.1039/b822951c.
  4. ^ "Latin America risks reverting progress in poverty reduction / Global financial crisis will affect region's trade with the rest of the world" (PDF). ECLAC. December 2008. Archived (PDF) from the original on 2011-07-20. Retrieved 2010-10-02.
  5. ^ "Preliminary overview of the economies of Latin America and the Caribbean 2008". ECLAC. December 2008. Archived from the original on 2011-07-20. Retrieved 2010-10-02.
  6. ^ "Growth in Latin America and the Caribbean Is Projected to Be 1.9% in 2009". ECLAC. 18 December 2008. Archived from the original on 20 July 2011. Retrieved 2 October 2010.
  7. ^ "Amérique latine : fin de six années de croissance soutenue" (in French). RFI. 2008-12-19. Archived from the original on 2009-02-01. Retrieved 2010-10-02.
  8. ^ "South America: Recession Can Be Avoided". CEPR. November 16, 2008. Archived from the original on January 18, 2009. Retrieved October 2, 2010.