Mexico’s Economy
The Mexican Gross domestic product measured in purchasing power parity in 2006 was estimated at $1.34 trillion and $10,600 per capita of Gross Domestic Product. Since then, GDP has been growing though at a slow rate of 4.8 per annum. The inflation rate was been measured at 3% in 2007 using to Consumer price index and has since grown due to the global food crisis witnessed in 2008 that saw prices of commodities surging upwards. The labor force has recorded 45.38 million people with human development index reported at 0.829 and an education index at 0.86. The unemployment rate as of 2007 was recorded as 3.7% with poverty levels estimated at 13.5% of the total population. The exchange rate as of December 31, 2008, was 13.93MXN per 1 USD however, with the deteriorating economic performance of the US economy; it has continued gaining value against the dollar. The government budget is estimated to be the US $ 196.5 Billion (revenue) with a public debt of 20.7% of GDP and external debt of $ 178.3 Billion in 2006.
Chile’s Economy
Chile’s GDP measured in purchasing power parity was estimated at $ 246, 482 while measured using per capita, it was estimated at $ 14,688 per annum in 2008. The economic growth as in the third quarter of 2008 was at 4.8% and with the economic stimulus plan of $ 4Billion that is intended to quash the current meltdown in the economy, economic growth is estimated to grow at 2-3 percent. The total population of Chile is estimated at 16,763,470 with the human development index as in 2008 being 0.874 high. Labor force as in 2007 was at 6.97 million with 7% of the population being unemployed. The poverty index is estimated that 13.7% of the population is living below the poverty line. Inflation measured using the consumer price index was estimated to be 6.5 percent in 2007 and was expected to rise with the current economic meltdown.
US Economy
During the fourth quarter of 2008, GDP in the United States decreased at an annual rate of 3.8 per annum. According to the Bureau of Economic Analysis; the real GDP of the third quarter decreased by 0.5 per annum. However, the data on fourth-quarter estimates are based on incomplete data and a comprehensive estimate for the fourth quarter is set to be released on 27th February 2009 that would be based on more comprehensive data. According to the Bureau of labor statistics, unemployment was as high as 7.6% approximately 11.6 million people in January 2009. Over the past year, the unemployment rate is said to have risen by 2.7% points and continues to rise. According to the Bureau of Economic Analysis, both the gross purchase price index and personal consumption expenditure rose by 4.2%. On the other hand, the consumer price index (CPI) a measure of inflation indicated that CPI had grown by 5.0%. In international trade, the US trade balance stood at -$39.9 billion in December 2008 with total exports estimated at $133.8 billion and imports estimated at $173.7 billion, therefore, resulting in a deficit of $ 39.9 billion. In the third quarter of 2008, the US current account balance stood at -$174.1 down from -$ 180.9 billion in the second quarter of 2008. This shows some improvement in the account balance. Corruption in the US has been minimal, though; the financial crisis in Wall Street in 2008 was highly attributed to corruption and mismanagement in the stock market (Bureau of Economic Analysis)
Chile’s Economic Miracle
The story behind Chile’s economic miracle is coined from Milton Freidman’s theory of liberalization used by Augusto Pinochet to introduce liberal economic reforms in Chile. With the advice from various economists in Chile, Pinochet introduced and implemented a set of economic reforms that boosted the economic performance of Chile tremendously. These included Deregulation and privatization. The miracle occurred in two phases with the first phase (1973-1982) flopping due to the fixed exchanged system at that time. However, the second miracle (1985-1989) took the country by storm with the introduction of devaluation that boosted exports of Chile thereby ending the existing depression in the country.
Since the introduction of these reforms, Chile has been performing extremely well and is ranked first in Latin America’s economies. This performance is a result of economic liberalization, Stabilization of inflation, and privatization of government-owned companies that were introduced by Pinochet. As a result of liberalization, prices of goods and services were determined by forces of demand and supply thereby allowing the economy to function competitively without the influence from the government. The stabilization of inflation resulted in competitive prices in the market that encourage both production and consumption of commodities. As a result, economic activities such as investments increased tremendously thereby increasing economic growth. Privatization on the other hand enhanced efficiency in production leading to increased supply of goods and services and elimination of monopoly. To date, these reforms introduced by Pinochet are still upheld thereby explaining why Chile’s economy is performing so well (Wesson 4).
Economic Crisis in Argentina
Many analysts have different views on what caused the economic crisis in Argentina in 2001. Others argue that it was a result of IMF poor policies on Argentina and other countries while others argue that it was a result of corruption in Argentina’s government. However, the crisis can be attributed to Argentina’s fixed exchange policy. Argentina fixed its Peso’s exchange rate to the US dollar that is $ 1 was equal to 1 Peso. This made the Peso surge in value with the US dollar during the 1900’s economic boom. Consequently, Argentina’s export became expensive as a result of the high value of its currency relative to its imports. Considering Argentina’s trading partners who had a low value of their currency, trade was hampered as Argentina’s exports were expensive. In the long run, its economy began to experience a downward trend due to low economic activities thereby causing the worst Economic crisis in Argentina (Staff and agencies, Guardian p 1)
Works Cited
Bureau of Economic Analysis. Overview of the U.S. Economy: Perspective from the BEA Accounts. Web.
Staff and agencies. Timeline: Argentina’s economic crisis. How did Argentina get into this mess? The Guardian.
U.S. Bureau of Labor Statistics. Inflation and Prices, Unemployment. Web.
Wesson, Robert G. Politics, Policies, and Economic Development in Latin America. Hoover Press, 1984 p 4.