Economia brazil, ecuador, chile

        MESURING ECONOMIC DEVELOPMENT

How does this affect me? How am I involved? These kinds of questions are always present in your head while speaking, reading, or listening about another country. Truth is the world is like a puzzle; everything needs to fit in perfectly otherwise it wont work. On this essay I will compare Brazil, Ecuador and Chile in the following five economic development aspects: Inflation, GDP per capita, exports of goods and services, unemployment and GINI index. However, we must know that the economic development of a country is not measured on how much money they make but on all of the previous aspects and more.

Firstly, I drive you into the inflation of the three countries. In the three countries inflation occurred due to a lost of money they couldn’t cover with the money extracted from taxes. For instance in brazils hyperinflation, between 1981 and 1997, Brazil borrowed lots of money and wasn’t able to pay it back because the income wasn’t enough to cover all the expenses. This caused an increase of 2700 percent on the consumer’s price level index. On the other hand, Chile suffered an earthquake in 1985. This earthquake spawned expenses that couldn’t be covered so the country had to ask for money who was later paid as soon as the country increased consumers price level index. This is why countries have to be careful on how much money they ask for and they require knowing how they will pay it back.

As we pass inflation, we get to the GDP per capita. All countries have recessions, and most of the time is due to an unexpected event. This can be proved by Ecuador’s recession in 1998 in which, due to a drought, its agricultural sector enter bankruptcy an petroleum decreased its price. As this factors were the ones who maintained Ecuador stable losing them will end up in nothing but a bad situation for Ecuador. Not to mention that after brazils inflation problems even bigger problems came out in 1997 when the Brazilian real was devaluated by the IMF. Brazil had its own problems. After defeating inflation with a technique called “Plano Real”, the same technique led to high interest rates and to consequent debt spiral. By the end of this recession its GDP per capita fell to 4286 USD. This is to say it is essential for every country to have a plan B or to be prepared for what might happen. In addition the current country with the highest GDP per capita is Chile with 9854 USD.

When it comes to agricultural exportation, Latin-American countries lead the race. However there is always a head of the leaders. In this case it is Brazil exporting more than 150 billions of dollars in 2014. Followed by Chile exporting 59 billions and in the third place Ecuador exporting only 14 billion. However it is not easy. Everything can happen. For instance, in 2008 with the financial crisis, not only all the three countries enter a recession period, but also as the US lost money. This led to a diminution of importation on the US. In other words the US couldn’t buy from any of these countries causing a decrease on the exportations income. Leaving reducing brazils income by 14 billion dollars, Ecuador’s income by 600 million dollars and Chiles income by 3 billion. Latin America might lead the race in agricultural exports but if the other countries stop buying from them they will face crisis.

...