Mid-term examination – essay portion
From the time Latin America was colonized, its economy has been largely based off of agriculture. This was also true of North America, but only up until the late 1800s. The problem with Latin America has always been timing. After independence became a new trend in Latin America, these countries were left to fend for themselves and develop their own economic strategies. Unfortunately, the development of these strategies took too long and happened too late for them to be able to follow the international trends in trade. Since independence, there have been three phases of economic development in Latin America: export-led growth, inward-looking development, and the promotion of nontraditional exports. During each phase, certain countries have fared better than others based on what was emphasized in each strategy as well as the never-ending effects of the commodity lottery.
During colonial times, agricultural trade and development of Latin America was controlled by Europe. Unfortunately, the countries were very isolated because they could often only export their agricultural products to the country that had colonized them. This was especially true of Brazil, who only was allowed to trade with Portugal during colonial times. When these countries began to gain independence, they failed to make their own industry truly competitive because they lacked the capital with which Europe had always provided them. Unfortunately, this meant that Latin America continued to be highly dependent on Europe because they began borrowing money from them, especially from Great Britain. Any agricultural development in the 1800s resulted from slavery, because Latin America lacked the labor force necessary to cultivate some of its key products such as sugar. Due to the commodity lottery, which basically means that each country cultivated certain things just because of their location, certain countries produced and exported certain products. For much of Central America, this product was and is the banana, which has directly resulted in the poverty of Central American countries. In other countries, it was wheat and nitrates (Chile), tobacco (Colombia), hides, salted beef, and wool (Argentina), guano (Peru), sugar (Cuba and the Dominican Republic), coffee (Brazil), and cacao (Venezuela). This greatly differed from North America because the large land mass allowed them to cultivate a large variety of key products instead of just one or two. North America also followed the economic strategies (listed above) that Latin America did, but the difference was that they began to follow them first and had more success with them because of their abundance of capital. Latin America had bad timing when taking on these strategies because 1) the export-led growth was a good strategy but not appropriate for Latin America by the end of the 1800s because industrialization was already occurring in other parts of the world 2) inward looking development began with the Great Depression and they spent too long focusing on this and 3) they didn’t decide to begin the promotion of nontraditional exports until after their giant financial crisis of the 1980s. Due to this lack of appropriate economic strategy, agriculture has greatly suffered in Latin America and it has been extremely difficult for them to industrialize and keep up in technology with North America and Europe. In recent years, Brazil has become one of the leaders in agricultural exports due to no-till farming and university input aided progress.
When speaking of “land reform” in Latin America, this refers to the call for providing the lower classes with land instead of allowing all of the land to the stay in the hands of a few powerful elite members of each country. This would allow for a renaissance in subsistence farming and provide the lower classes with the opportunity for social mobility, therefore lessening the outrageous gap between the...
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