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3. Peru

Projected annual growth: 5.5%
2010 GDP: $85 billion*
2050 projected GDP: $735 billion

Referred to as South America’s rising star, Peru is enjoying its longest economic expansion on record, averaging 7 percent growth from 2003-2010.Growth is expected to remain robust in coming decades, with HSBC forecasting the country to jump 20 places to become the 26th largest economy by 2050.

The Andean nation, which was ravaged by a 20-year armed conflict with Maoist Shining Path guerrillas between 1980-2000, has successfully managed to bounce back thanks to a leap in private investment. The country’s pro-business government has played a key role in this, encouraging decentralization and greater transparency.

As the world’s second-largest producer of copper and silver, Peru has attracted substantial investments in mining, which accounts for 60 percent of its exports. The resources sector has attracted more than $18 billionin investment, mostly foreign, over the last 15 years.

But the mining boom has not come without resistance. Authorities have faced opposition from Peru’s indigenous groups in the Amazon region and Andean mountains, who argue that the mining projects are wiping out their ancestral lands.

There’s also a large, unwanted contributor to the economy: drug trafficking. In 2010, Peru overtook Colombia as the leading producer of coca leaf, the source for cocaine. According to the AFP, drug trafficking generated$22 billion in 2009,nearly 17 percent of Peru's gross domestic product.

* Based on 2000 U.S. dollars

Photo: David Madison | Getty Images