South America

E

Energy

Petroleum and natural gas are the principal sources of energy in South America. More primitive sources, such as firewood and charcoal, however, are used widely in industry, sometimes in making iron and steel or in refining sugar. Dependence on petroleum and natural gas is of concern because only Colombia and Venezuela are self-sufficient in petroleum. Distributional needs are met with fairly extensive petroleum and gas pipeline systems in Argentina, Venezuela, and Colombia and lesser systems elsewhere. Nevertheless, most pipeline systems in South America transport crude oil and gas to export terminals, rather than to internal markets. Coal, available in relatively small reserves, was important to the early development of rail and water transportation and industry in Chile, Argentina, Brazil, and Colombia, but has long been superseded in importance as an energy source. Alcohol derived from sugarcane is an important automotive fuel in Brazil. Hydroelectric power has become a viable alternative to thermal-electric power only since the 1950s. The development of hydroelectric power began in Brazil, Chile, and Colombia; installed hydroelectric capacities now constitute more than 60 percent of electricity-producing capacity in Paraguay, Brazil, Uruguay, Colombia, and Bolivia. Hydroelectric power is also important in Peru, Chile, Ecuador, Suriname, and Argentina, where installed hydroelectricity-generating capacity accounts for more than 40 percent of all generating capacity. Hydroelectric development ranges from small installations used by provincial towns to the enormous facilities built in the middle and upper Paraná Basin and the upper and lower reaches of the São Francisco River.

F

Transportation

Although a great variety of forms of transportation are in common use, the road and railroad networks are of primary importance because of the bulk and value of their freight and the number of passengers carried. Motor-vehicle traffic dominates in most parts of the continent. Railroads and coastal and river ships remain relatively more important in Argentina, Brazil, and Chile than elsewhere, but even in these countries the bus, truck, and automobile are the principal modes of transporting goods and passengers. Air transport has developed rapidly since the end of World War II, and an important network exists in South America. Railroads suffered from underdevelopment in the early 20th century, mainly because of the historic lack of settlement of the continent's interior; for instance, the railroad systems, which had matured by 1930, were largely used for commodity movement between immediate hinterlands and the port cities. National rail and highway networks are dense only in southeastern Brazil and in the Pampas of Argentina and, to a lesser extent, in the populous areas of Uruguay, Chile, Colombia, and Ecuador. The construction of roads has been most important since the 1950s. Venezuela and coastal Peru have a good system of surfaced roads; in Paraguay and Bolivia the road networks are not as good. The Andean countries have been extending roads into the interior for decades, and Brazil has spanned parts of the Amazon Basin with roads. The national road systems, like the airway systems, have begun to accelerate economic integration of distant interiors with the long-established industrial and commercial core areas of the various countries. In the mid-1990s many South American countries looked to private investors to improve their nations' road networks.

G

Trade

Most of South America's trade is intercontinental, with the United States, Western Europe, and Japan the major trading partners. Petroleum and its derivatives are the principal components of foreign trade. Brazil and Venezuela dominate the continent's export trade, and Brazil accounts for much of the imports. Intracontinental trade has been fostered since the 1960s by regional trade associations, beginning with the formation of the Latin American Free Trade Association (LAFTA) (now known as the Latin American Integration Association). Commodities such as wheat, cattle, wine, and bananas are principal items of intracontinental trade, and manufactured goods are of growing importance.

Nevertheless, the continent's external trade in agricultural and mining commodities remains more important than the internal trade of these commodities. South America contributes significantly to world trade in petroleum, coffee, copper, bauxite, fish meal, and oilseed; trade in these and other primary goods is essential to the underwriting of the continent's economic development.

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Since the late 1960s several attempts have been made to form trading blocks or associations that would protect South American markets from outside competition while forming larger internal markets for South American goods. In 1969 the Andean Community (Bolivia, Chile, Colombia, Ecuador, Peru, and Venezuela) was formed with those goals in mind. By 1977, however, Chile had withdrawn from the union and most of the countries had reverted to exporting their most successful products, without regard for trade agreements and in open competition with one another. Since then several new regional groupings have emerged: the Group of Three (Colombia, Mexico, and Venezuela); the Southern Cone Common Market (known by its Spanish acronym, Mercosur); and the Association of Caribbean States (ACS), which includes Colombia, Suriname, and Venezuela. Trade groups such as these set preferential tariffs on certain goods to stimulate the flow of goods, services, and capital.

Following the establishment of the North American Free Trade Agreement (NAFTA) between Canada, Mexico, and the United States in 1994, several South American countries—principally Argentina, Chile, and Colombia—began pushing for an extended trade grouping. Brazil also advocated for a free-trade agreement incorporating all of South America. Such an agreement was finally reached in 2004 when the Andean Community joined with Mercosur to form the South American Community of Nations. The creation of this trade group—consisting of Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, and Venezuela—was seen as a major step toward the forging of a hemisphere-wide free-trade agreement, tentatively known as the Free Trade Area of the Americas. Negotiating an agreement of such broad scope will be difficult, however, given that membership often demands strict fiscal controls over inflation and other sensitive political and economic issues.

V

History

After 1453, when the Turks completed the conquest of the Byzantine Empire and won control of the eastern Mediterranean, the western nations, chiefly Portugal and Spain, were forced to seek a new route to Asia. The Portuguese, who had made a number of pioneering voyages southward in the Atlantic Ocean, sought the new route by probing the coast of Africa, reaching the Cape of Good Hope in 1486. In 1492 Christopher Columbus attempted to reach India by sailing due west across the Atlantic Ocean; but he landed in the present-day West Indies, opening up a new world to European commerce and civilization. For information concerning the pre-Columbian cultures of South America, see Native Americans of Middle and South America: History; Araucanian; Arawak; Carib; Chibcha; Guaraní; Inca; Pre-Columbian Art and Architecture; Quechua;Tiwanaku; Tupí-Guaraní.

After Columbus returned to Europe, Spain and Portugal became involved in controversy concerning land rights in the New World. The dispute was settled in 1493 by Pope Alexander VI, who allotted to Portugal all new territory east of a line in the Atlantic Ocean running due north and south 100 leagues west of the Azores and to Spain, all territory to the west of the line (see Demarcation, Line of). The demarcation line was later modified, with the result that Portugal obtained suzerainty over the eastern bulge of South America. This region subsequently became Brazil.

On August 1, 1498, during his third voyage, Columbus sailed to a point off the mouth of the Orinoco River and sighted the South American mainland. After cruising along the coast for several days he began to comprehend the continental character of the region.

A

Post-Columbian Explorers

The next European to reach the continent was Portuguese navigator Pedro Álvares Cabral. In April 1500 a fleet under his command anchored off the coast of present-day Brazil, which he claimed for Portugal. The Portuguese, who had meanwhile found their way to India by sailing around Africa, paid little attention for three decades to the territory found by Cabral. During this period the Spanish steadily intensified explorational and colonizing activities in the New World, devoting most of their effort during the first 20 years to the West Indies and Central America. Various explorers, chiefly navigators in the service of Spain, visited the northeastern coast of the continent in the early years of the 16th century. Noteworthy among these men were Spanish mariners Vicente Yáñez Pinzón, Alonso de Ojeda, and Pedro Alonso Niño; Spanish navigator and geographer Juan de la Cosa; and Italian-born navigator Amerigo Vespucci. Late in 1519 Portuguese mariner Ferdinand Magellan, then seeking a westward route to the East for the Spanish monarchy, explored the estuary of the Río de la Plata. He resumed his search in the next year, cruising southward. On November 28, 1520, having completed the passage of the strait that now bears his name, he simultaneously accomplished his mission and realized the dream of countless navigators.

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