MIDDLE AMERICA II (CHAPTER 4: 216-235)

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MIDDLE AMERICA II(CHAPTER 4 216-235)
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(No Transcript)
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Natural Resources
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MAQUILADORAS
Tijuana
Ciudad Juarez
Nogales
Chihuahua
Reynosa
Matamoros
Monterrey
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GDP PER CAPITA ALONG THE US-MEXICAN BORDER
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MAQUILADORAS

• Initiated in the 1960s as coupon houses
• Assembly plants that pioneered the migration of
  industries in the 1970s
• Today
• gt4,000 maquiladoras
• gt1 million employees

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MAQUILADORAS

• Modern industrial plants
• Assemble imported, duty-free components/raw
  materials
• Export the finished products
• Mostly foreign-owned (U.S., Japan)
• 80 of goods reexported to U.S.
• Tariffs limited to value added during assembly

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MAQUILADORAS

• Maquiladora products

• Electronic equipment
• Electric appliances
• Auto parts
• Clothing
• Furniture

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MAQUILADORAS

• ADVANTAGES
• Mexico gains jobs.
• Foreign owners benefit from cheaper labor costs.
• EFFECTS
• Regional development
• Development of an international growth corridor
  between Monterrey and Dallas - Fort Worth

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NAFTA

• Effective 1 January 1994
• Established a trade agreement between Mexico,
  Canada and the US, which
• Reduced and regulated trade tariffs, barriers,
  and quotas between members
• Standardized finance service exchanges

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NAFTA
How has Mexico benefited from NAFTA?
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MEXICO AND NAFTA

• Foremost, it promises a higher standard of
  living.
• NAFTA creates more jobs for Mexicans as US
  companies begin to invest more heavily in the
  Mexican market.
• Mexican exporters increase their sales to the US
  and Canada.
• Is that the entire story?

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WAGE RATES COMPARED
20.21
25
17.38
20
15
10
1.55
2.87
5
0
Assemblers
Skilled Labor
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U.S. TRADE WITH CANADA MEXICO

• Canada remains as the United States largest
  export market.
• Since 1977, Mexico has moved into second place
  (displacing Japan).
• 85 of all Mexican exports now go to the United
  States.
• 75 of Mexicos imports originate in the United
  States.

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ECONOMIC TRENDS (Central America the Caribbean)

• Agriculture
• Industry
• Services
• Tourism
• Environmental Issues
• Deforestation

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POST COLONIAL DEPENDENCY

• Neocolonialism
• Policies of developed states that enable them to
  dominate economies of former colonies
• Disjunctive Development
• Investments
• Loans

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PRIMARY SECTOR DEPENDENCE

• El Salvador
• Agriculture accounts for 24 of GDP and 40 of
  the labor force and contributes to 60 of
  exports.
• Economic losses because of guerrilla sabotage
  total 2 billion since 1979.
• Honduras
• Agriculture accounts for more than 25 of GDP,
  employs 62 of the labor force, and produces
  two-thirds of exports.
• Economic loss because of natural disaster

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PRIMARY SECTOR DEPENDENCE

• Dominican Republic (49 Agriculture)
• Sugarcane, coffee, cotton, cocoa, and tobacco
• Jamaica (22.5 Agriculture)
• Sugar, bananas, and rum (Hurricane Gilbert -1988)
• Cuba (20 Agriculture)
• Sugar, tobacco, citrus, and coffee

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ALTITUDINAL ZONATION
Middle South Americas Vertical Climate Zones
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ALTITUDINAL ZONATION
Middle South Americas Vertical Climate Zones
TIERRA CALIENTE (Hot Land) Bananas, Cocoa, Sugar,
Rice
2500
750 m
Sea Level
Sea Level
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ALTITUDINAL ZONATION
TIERRA TEMPLADA (Temperate Land) Coffee, Rice,
Corn, Sugar
6,000
1800 m
2000
600 m
Sea Level
Sea Level
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ALTITUDINAL ZONATION
TIERRA FRIA (Cold Land) Corn, Wheat, Potato
12,000
3,600 m
6,000
2,000 m
2000
600 m
Sea Level
Sea Level
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ALTITUDINAL ZONATION
Middle South Americas Vertical Climate Zones
TIERRA HELADA (Frost Land)
12,000
3,600 m
6,000
2,000 m
2000
600 m
Sea Level
Sea Level
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THE TOURISM OPTION

• Antigua and Barbuda
• Direct contribution of 13 to GDP and affects
  growth in other sectors
• The Bahamas
• Tourism alone provides 50 of GDP and directly or
  indirectly employs 40 of the population.
• Cuba
• Growing industry

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ENVIRONMENTAL CONCERNS

• Tropical Deforestation
• 3.5 million acres of woodland in Central America
  disappear each year!

What are the causes of tropical deforestation?
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CAUSES OF TROPICAL DEFORESTATION

• Clearing of rural lands to accommodate meat
  production and export
• Rapid logging of tropical woodlands to meet
  global demands for new housing, paper, and
  furniture
• Population explosion forests are cut to provide
  crop-raising space and firewood

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THE PUERTO RICAN MODEL

• One of the most dynamic economies in the
  Caribbean region
• Industry has surpassed agriculture as the
  dominant sector of economic activity.
• Encouraged by duty free access to the US by tax
  incentives (US firms have heavily invested in
  Puerto Rico since the 1950s)

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MIDDLE AMERICA II(CHAPTER 4 216-235)