MIDDLE AND SOUTH AMERICA

1
MIDDLE AND SOUTH AMERICA
2
5,900 miles long 7.9m sq. miles 35 countries
tot. pop. 500 million
3
Large Brazil 162m Mexico, 98m Medium 40m
Argentina, 39m Small 10m El Salvador, 6.2 Very
small Many Islands
4
Middle America (Mexico, Central Am. Caribbean)
5
Greater Antilles Lesser Antilles
6
South America
7
Middle and South America

• Very diverse region
• Climatically

8
(No Transcript)
9
Middle and South America

• Very diverse region
• Geomorphology

10
Amazon basin river Patagonia, Pampas, Guiana
Highlands, Brazilian Highlands, Atacama, Orinoco
and Paraná rivers
11
Middle and South America

• Very diverse region
• Agriculturally

12
(No Transcript)
13
Middle and South America

• Very diverse region
• Culturally and Demographically

14
2 major population axes
15
Current population patterns reflect history of
region
16
(No Transcript)
17
(No Transcript)
18
Native Indians Mestizos Europeans Africans Asians
Mulattos (African/European) Asian/Africans Mestizo
s/African/Asian
19
(No Transcript)
20
Middle and South America

• Reasons for high Population growth
• Economic (labor for agriculture)
• Catholic Church (family planning philosophy)
• Cultural mores --Validation through prolific
  reproduction
• Contraception and family planning reducing birth
  rates
• Central America highest
• Caribbean Lowest
• South America middle
• Doubling rate still 40 years

21
Middle and South America

• Population Issues
• Primate city structure
• Concentrates growth
• Concentrates problems (congestion, pollution,
  shanty towns)
• Lack of opportunities in other cities

22
(No Transcript)
23
(No Transcript)
24
(No Transcript)
25
Middle and South America

• Legacy of underdevelopment
• Neocolonialism
• Dependence on raw material exports
• Profits invested outside the region
• (foreign ownership, locally powerful elites)
• Corruption
• Political and economic

26
Middle and South America

• History of Development
• Prior to 20th century cash crop agriculture and
  commodity extraction
• Early 20th century political protests against
  elite dominance
• Emergence of socialist democracies
• Efforts to change economic system
• More manufacturing, better jobs, more wealth
  distribution
• E.g., Mexico, Argentina

27
Middle and South America

• Import substitution strategy
• How to grow your manufacturing sector?
• Replace imported products with same products made
  at home
• Use government money to build factories
• Some nationalization of strategic industries also
• Use of tariff barriers to protect new growing
  industries
• Makes imports more expensive home produced goods
  more competitive

28
Middle and South America

• Results?
• Did create jobs in short term ( 15 years)
• Long term didnt work
• (i.e., no long term and continuous growth of
  manufacturing)
• Why?
• Quality of the goods was poor
• State owned factories faced little competition
• Privately owned factories faced little
  competition
• Local markets too small
• Potential consumer base too small

29
Middle and South America

• The potential pitfalls of Import Substitution
• Contradiction within the model
• Once market saturation is reached, stagnation
  tends to set in
• Few opportunities for reinvestment, expansion,
  and innovation
• Lack of political and economic will to remove
  tariff barriers at the appropriate stage
• Explain with diagrams
• End result continued dependence upon exports of
  raw commodities

30
Middle and South America

• By late 1960s
• Obvious it was not working
• More radical socialist and communist movements
  emerge
• Surge of government oppression
• Rise of military supported or military
  dictatorships
• E.g., 3,000 killed in Chile 14,000-18,000 in
  Argentina tens of thousands tortured

31
Middle and South America

• New Governments needed legitimacy
• Ie., needed to create new economic growth to
  justify restrictions on society, violence etc.
• Confluence of events
• Problem Little investment available in the
  region
• Eurodollars and Petrodollars
• Economic recession in U.S. and W. Europe
• Shift to the Right in U.S. and U.K. political
  leaders
• (Ronald Reagan, Margaret Thatcher)
• Support for large investment flows into the region

32
Middle and South America

• Countries borrow huge flows of money (from major
  international banks) to invest in the region
• invest . leads to more economic growth
  .leads
• more profit more tax revenues .ability to
  pay off the initial investment
• Simple?
• Dependent upon success of initial investment

33
Middle and South America

• Projects spectacularly unsuccessful
• Many were ill-conceived (e.g., trans-Amazon
  highway)
• No markets for resulting products
• Not enough skilled labor
• Technical and managerial faults
• Corruption

34
Middle and South America

• Debt Crisis and Structural Adjustment Programs
• Early 1980s not working
• Money spent
• No economic return
• Global recession in 1980
• Strengthening value of the dollar
• Countries not able to pay back their debts
• Beginning of structural adjustment programs (SAPs)

35
(No Transcript)
36
(No Transcript)
37
(No Transcript)
38
Middle and South America

• Structural adjustment programs (SAPs)
• Programs specified by the IMF (international
  monetary fund) that countries need to implement
  to reschedule debt payments
• Specifics
• Increase integration with global economy
• Ie., allow more foreign investment with less
  government regulation
• Reduce the size of government
• Sell state owned industries (those nationalized
  during earlier periods)
• Remove regulations of foreign ownership
• Cut social programs and policies
• Aimed at wealth redistribution

39
Middle and South America

• Record of SAPs is mixed
• Positives
• Promoted some types of growth
• Mostly in extractive sectors (attractive to
  foreign investors)
• Higher rates of economic growthat least during
  1990s
• Helped middle classes but with economic
  polarization also

40
Middle and South America

• Record of SAPs
• Negatives
• Have not reduced the debt burden
• Income disparity has increased
• ( people living in poverty increased from 35 to
  39)
• Wages in many countries are ½ of what they were
  in 1980
• Public funding for education and health care has
  declined
• Makes it harder to develop over long term
• Problem
• SAPs are fiscal measure designed to increase
  economic growth for debt repayment
• Not policies designed to generate economic
  development

41
Middle and South America

• Some examples of SAPs (from Knox and Marston,
  2004)
• Brazil
• 60 increase in gasoline prices
• Reduce minimum wage to 50 a month
• Debt increased from 57B to 250B between 1980
  2000
• Global debt
• 1.5 trillion owed by low and middle income
  countries to high-income countries (unlikely to
  be ever paid back)
• Interest flows 250B to Western banks
• 41B in new loans

42
Middle and South America

• Recent Developments
• Enterprise zones
• Eg., Maquiladores
• MERCOSUR (the Southern Common Market)
• Argentina, Brazil, Uruguay and Paraguay
• Political Stability

43
(No Transcript)
44
Middle and South America

• Political Stability
• All have democratically elected governments
• (except Cuba)
• Democratic institutions relatively fragile
• Outside interference
• Soviets Cuba, Bolivia, Grenada, Nicaragua
• U.S. propping up governments Cuba, Nicaragua,
  Haiti, Chile
• U.S. toppling governments (indirectly) Chile,
  Guatemala
• U.S. supporting insurgencies against elected
  Govs Nicaragua
• Recent Invasions Panama, Grenada

45
Middle and South America

• Corruption
• Elite backed alliances
• (military, rural landowners, wealthy urban
  citizens, foreign MNCs and sometimesU.S.
  Government)
• Regular scandals
• Alberto Fujimori (Peru brought some peace and
  prosperity for some but very authoritarian
  leadership human rights abuses )
• Carlos Salinas (Mexicofled with 300m)
• Role of Government (either on left or right) very
  extensive

46
Middle and South America

• Drug Trade
• Middle America and Northwest South America
• (cocaine, heroin, marijuana)
• Growers are small farmers
• Profits to drug barons
• Government, left and right wing paramilitaries,
  police, national armies all involved
• U.S. role funds to militaries with history of
  human rights abuses

47
Environmental Issues

• Major Issues
• Tropical rainforest destruction
• Began in 16th century
• Rapid increases since 1950
• 75 of C. Americas forests are gone
• 2.5 annual loss (1,600 sq. miles/yr)

48
Environmental Issues

• Amazon
• Loss rate 9m hectares/yr
• Size of Indiana/yr
• 3 main culprits
• Logging companies
• From Burma, Indonesia, Malaysia, The Philippines
  and S. Korea
• Bought up rights to harvest the fine Tropical
  Woods

49
Environmental Issues

• Cattle Grazing
• US fast food industry
• Clears about 65 of the total
• Pastures for beef cattle to be imported to the US
  and elsewhere
• Population Growth
• Rural landless laborers
• Urban poor
• In search for land and a better life

50
Tropical Deforestation Impacts

• Global warming
• Rainforests absorb carbon dioxide and release
  oxygen
• Biodiversity
• ½ the species on the plant
• 45 of medicines are first identified in nature
• E.g., aspirin
• Health of the planet
• Biodiversity is an important indicator