Summary of all articles and lectures on Latin America for the course in Development Regions. Written in simple English, so you do not have to translate for the exam. Perfect preparation for the exam!
Samenvatting Regions in Development: Artikelen en
Hoorcolleges
Latin America
Article Hoorcollege 1 – Introduction to the region
The transformation of modern Latin America, 1880s – 1990s
Latin America has undergone several economic, social and political changes since
the late 19th century. These changes have been very different across the region,
but there also have been equalities in development.
Important: Latin America in a context of global economic expansion.
Economic changes social changes political changes
Phase 1: Initiation of Export-Import growth, 1880 – 1900
Industrial changes in Latin America were affected by the industrial revolution in
Europe.
After its independence Latin America lost a lot of global connections autarky
instead of commercial farms, no mining, little manufacturing.
BUT: the industrial revolution in Europe caused demand for raw materials and
foodstuffs transition in Latin America, which becomes an export continent of
raw materials and food and an import continent for more technologically
advanced products (manufactured goods)
A lot of investments in Latin America (especially Britain)
Thus: an ‘export-import’ form of economic growth. It is an dependent form of
growth.
Liberalism grew in Latin America but it was different than in Europe. Nobody was
against is because it stimulates economic growth and free trade, but it had some
disadvantages (for example inequalities). The Latin American elite also saw itself
as inferior to the Europeans.
The growth of the export economies in Latin America also caused social changes:
1) modernization of the upper-class elite (became more European by for example
maximizing profit)
2) emerging of new professional or ‘service’ groups especially in the
commercial markets for example lawyers
Also political changes:
1) elite began to be interested in national politics pursue for political power
This evolves in two ways:
- Elite took direct control of the government (Chile, Argentina) not much
opposition oligarchic democracy
- Elite took indirect control by helping friendly militaries (dictators) into
power which favoured the elites.
Characteristics of both political possibilities:
- In both cases there is emphasis on social control and stability.
- Opposition groups were suppressed
- Centralization of power (nation-states)
- Local regions lost power
- Political stability was important for FDI and thus for economic growth
Phase 2: Expansion of the Export-Import growth, 1900 – 1930
Years of prosperity and wealth (for example Argentina). Export-Import grows
further. Two social changes:
1) emerging of an economic middle class.
,2) increase in import of migrant labour from abroad, especially Argentina.
Exception: Mexico, because they have a big peasant Indian population.
These new worker class organised themselves in labour unions. The nature of the
Latin American economies made this possible:
- Workers in the trade infrastructure where important for a countries direct
economic growth, so they had a good position
- Most workers were employees of small companies (still little
industrialization) and thus it was easy to start up a union.
Lot of strikes (just as in Europe, USA, Russia at that time). Elite responded
differently.
Another major change in 1900s- 1930s: the balance between rural and urban
sectors rapid urbanization (migrants and rural-urban migration).
The (new) worker classes didn’t gain much political power (most of them where
often seen as foreigners).
The elite wanted to have the support from the middle class and thus there were
some political reforms in the beginning of the 20 th century.
Emerging of ‘co-optative democracies’ elite and middle class both have
political power but the working class remains excluded. It was co-optative, but
still the lower classes had no vote.
In some countries a cadre of professional politicians was formed.
Latin America became more and more integrated in the world economy.
The liberalism wasn’t totally successful. Unsuccessful cultural borrowing was
found in many Latin American countries. European liberalism was imitated but
not adapted to local Latin American contexts.
European idea economic liberalism would bare a new economic class that at
some point could realize its own political ideas. But in Latin America the elite
didn’t want that and it didn’t happened:
- There was no large new economic middle class with an own political
instinct
- Still most people lived in the subsistence sector. Only a small group (for
example doctors, lawyers) saw itself different.
- There were still anti-liberal political ideas
- Economic liberalism is underpinned by faith in the rationale. But this was
not the case in Latin America.
Phase 3: Import-Substituting Industrialization, 1930 – 1960
The Great Depression had catastrophic effects on the Latin American economies.
Once again (just as the IR) changes in the industrial core of the world (Europa
and USA) had severe effects on Latin America.
Industrialization is needed.
The depression caused a lot of political unrest in Latin America military coups.
Latin American rulers had 2 possibilities to react to the world economic crises:
1) forging even closer commercial relationships with Europe to sustain and
expand exports (for example: Argentina wanted to serve the whole British beef
market)
2) industrialization. Several benefits:
- Greater economic independence (less import)
- The military supports this because of arms
- Latin America would become less vulnerable to economic shocks in other parts
of the world
- creating jobs for the working classes was getting bigger and more organized
Latin America doesn’t want an Industrial Revolution ‘import-substituting
industrialization’ (ISI) producing products that were first imported by Latin
American countries.
, It was a success with some problems (see below).
Social consequences of this movement were complex:
- Emerging of a new social class: the industrial bourgeoisie (were a
challenge to the already existing elites)
- The state stimulates ISI actively (not laissez-faire anymore) reducing
tariffs, raising the price of imported goods, increasing demands, direct
investments, etc.
- The working class grew in strength and importance (economic growth was
dependent on it)
The political expression of ISI took two forms:
1) continuation of the co-optative democracy now also the lower classes get a
(limited) vote
2) creation of multiclass ‘populist’ alliances alliances between the workers and
the entrepreneurs (merging interests)
These populist governments (yes, later governments) had two characteristics:
- They were at least semi authoritarian. Other interests where suppressed
and prevented from participation.
- Within the alliance there were still conflicts between the differenct groups
a charismatic leader was important to merge the interests, but without
one it was hard to sustain the alliances.
Phase 4: Stagnation in Import-Substituting growth, 1960 – 1980
1960s: economic crises in Latin America because of political and economic
causes.
Economic:
1) Industrialization trough ISI was structurally incomplete. Latin America
remained dependent on imports from Europa and the USA. Latin America
could produce their own products, but machinery and supplies to produce
these goods still needed to be imported. The dependency only changed in
form. It became an acute problem: the prices of export products kept
declining. For the same amount of exports Latin America only could buy a
smaller and smaller amount of imports.
2) the domestic demand for the manufactured goods was limited. Regional
trade blocks were not formed because of competiveness.
3) there was a relatively high degree of technology involved in ISI. Firms did
this because of competition. Two consequences: not a lot of demand (most
products were too expensive) and increasing unemployment (because of
technology involved)
military coups
The coups thought investments where needed and that’s why the rights of the
labour classes where crushed. Why this heavy hand to labour?
Unpopular anti-inflation policies needed to be taken and the military didn’t
want a revolution. (there was a lot of inflation) wages needed to be
reduced
These governments (military) were also anti-political politic parties were
suppressed.
These regimes where known as ‘bureaucratic-authoritarian states’:
- People with bureaucratic experience went into office (military, large
corporations)
- Political and economic exclusion of the working class
- reducing political activity
- Realising economic growth with more strict bands with developed
countries (dependency again!). Also relationships with large corporations,
banks, investors.
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