Report
The big difference between South America and Southeast Asia: Productivity gains
South American countries are characterised by very low productivity gains, given their per capita income level. As long as this situation persists, per capita income levels will not catch up with those in the United States, for example. This low level of productivity gains in South America can be attributed to the inefficient use of public spending, the frequency of balance of payments crises and inflation episodes, and above all the low savings and investment rates. On the contrary, Southeast Asian countries have high productivity gains and are therefore on a trajectory of catching up with the United States in terms of per capita income. These high productivity gains in Southeast Asia are due to controlled inflation and high savings and investment rates.
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