Managing Extremes

South America is characterized by extremes—lavish wealth and miserable poverty, dense urbanization and unexplored jungles, vast natural resources and innovative technological breakthroughs. To succeed in this region, managers must enter with an open mind and embrace the rich diversity.

Different countries

South America comprises 12 countries and one “overseas department” that can be roughly divided into three groups by language. Portuguese-speaking Brazil makes up about half the continent in size and population. Nine countries make up the Spanish-speaking group of South America, matching Brazil with a population of about 200 million. In the third group, at the far north, languages vary: the half a million people of Suriname speak Dutch, the 800,000 people of Guyana speak English, and the 250,000 people of French Guiana are actually French citizens.

Diverse populations

Besides indigenous peoples, South America is home to people from Africa, Asia, Europe, and the Middle East. More Japanese descendants live in Brazil than in any other place except Japan. The population density varies greatly. Each country of South America has sparsely populated expanses and one or two large population centers. Ecuador has the greatest population density with 138 people per square mile. Suriname, Guyana, and French Guiana have fewer than nine people per square mile.

Extremes of development

The per capita GDP of South American nations ranges from $4,000 in Paraguay to $14,300 in Chile, but the contrasts between the wealthy and poor are among the greatest on Earth. Every country falls between 40 and 60 by the Gini coefficient^[], compared to the 20s and 30s in Europe. In human development, the countries are ranked between 40 (Chile) and 111 (Bolivia) among some 200 nations. In rural areas utilities such as electricity or paved roads may not be available. Yet the region produces automobiles and launches satellites.

Gini coefficient—The Gini coefficient is a ratio that represents the distribution of wealth in a country, where higher numbers reflect a greater difference between rich and poor.

Geographical extremes

The region’s geography and climate are another source of its diversity. The Amazon is the Earth’s largest rainforest and Atacama in southern Chile is the Earth’s driest desert. The Andes is the Earth’s longest mountain range. La Paz, Bolivia is the world’s highest capital city. Cape Horn, Chile is only 805 km (500 miles) from Antarctica, and average temperatures are at freezing point throughout the winter. In contrast, half the countries of the continent are on or above the equator. Natural resources are equally varied, supporting a wide range of business types. Some of the land is rich in mineral resources, while others support large-scale agriculture.