20th Century Economic Development in Latin America: From Primary Exports to Industrialization
EVOLUTION OF ECONOMIC DEVELOPMENT IN 20TH CENTURY LATIN AMERICA
OECD and Economic Growth
The Organization for Economic Co-operation and Development (OECD) comprises mostly developed countries. Its focus is on economic growth and development, aiming to improve quality of life through advancements in health, education, and other areas.
Government Measures and Economic Development
Governments play a crucial role in economic development by implementing policies and regulations that foster growth and stability. These measures often involve legal frameworks and institutions that oversee economic activities.
Agricultural Production in Latin America
Several Latin American countries, including Brazil, Colombia, and Venezuela, have significant agricultural sectors focused on corn, livestock, and cereal production. Argentina is also a major producer of cereals.
Industrial Development and Natural Resources
Latin America’s abundance of natural resources has made it an important region for the global economy. Key industries include:
- Petroleum (U.S., Mexico, Venezuela)
- Natural Gas
- Metal mining (silver in Mexico, Chile, and Peru; copper and iron in Chile; tin in Bolivia)
Brazil, in particular, has experienced high levels of industrialization, similar to the United States.
Agricultural Activities and Geography
The diverse geography and climate of Latin America make it suitable for a variety of agricultural activities. Key examples include:
- Mexico: cotton, wheat, maize
- Central America: plantations of bananas, pineapples, cotton, coffee
KEY FEATURES OF THE REGION FROM A HUMAN GEOGRAPHY PERSPECTIVE
Underdevelopment and Growth
While Latin America is considered underdeveloped, it is not stagnant. The region experiences constant growth and development.
Urbanization in Latin America
Latin America is undergoing a significant urbanization process, with more people moving from rural areas to cities. Countries like Chile, Argentina, and Uruguay have high urbanization rates, leading to the growth of metropolises and megacities like Sao Paulo.
Economic Models and Development
1) Primary Export Model (Colonial Roots to Independence)
Latin America’s economic history is deeply rooted in its colonial past. After independence, the region primarily exported raw materials to developed countries, leading to dependence and integration into the global economy.
Modernization and trade led to the emergence of new social groups and political pluralism, paving the way for democratic development.
Industrialization was seen as a key aspect of modernization, leading to economic growth and an increase in public sector employment.
Challenges of the Primary Export Model
The primary export model, focused on outward-oriented development, faced several challenges:
- Incomplete development of modern transportation
- Reliance on natural resources for export earnings
- Labor mobilization issues
These challenges led to social problems and slow progress in social services, with Uruguay being a notable exception in Latin America.
2) Import Substitution Industrialization (ISI) Model (1930-1980)
The ISI model aimed to redefine Latin America’s relationship with the global economy by promoting domestic industrialization and reducing dependence on imported goods. This shift was partly driven by the Great Depression, which highlighted the need for government intervention in the economy.
Key aspects of the ISI model included:
- Counter-cyclical policies to mitigate economic crises
- Government-led industrialization efforts
- State intervention in the economy through measures like protectionism, financial diversification, and agricultural modernization
Effects of the ISI Model
The ISI model led to improvements in social welfare but faced criticism from both the right and the left. The right argued for less government intervention, while the left criticized the model’s continued dependence on developed countries and its failure to address social inequalities.