Latin America Essay, Research Paper

In attempting to establish the current state of development in Latin America,

historical chronology serves as the foundation necessary for a comprehensively

logical position. Latin American development has evolved in distinct phases,

which lead to the present day standings of the politics and peoples throughout

the region. The culmination of distinct historical attributes: conquest,

colonialism, mercantilism, captalism, industrialism, and globalism, serve as the

developmental path from the past, to allow an understanding of the current state

of development. In overview of this, as perceived by Latin American governments,

the four primary areas of concern as reported from the 1994, ?Summit of the

Americas? held by heads of 34 countries, were as follows: (1) preserving and

strengthening the community of democracies of the Americas, (2) free trade area

of the Americas (FTAA), (3) eradicating poverty and discrimination in the

hemisphere, (4) education (Americas Net). Each issue examined by members of the

summit involves aspects of politics and economics. The desired changes in Latin

American society can be shown connected to these two subject areas, as held by

authors Skidmore and Smith, ?From modernization theory we take the casual

premise that economic transformations induce social changes which, in turn, have

political consequences.?(Skidmore and Smith, 10) The understanding of

historical background, an awareness of current political goals, and the

incorporation of modern political and social theory allow an increasingly

accurate depiction of the state of development in Latin America to be

constructed. Development, largely defined as bringing to a more advanced or

effective state, stands often as the product of the successful management and

collaboration of economic, social, and political areas. The current state of

development should therefore gauge today?s level of success in creating a more

advanced and effective state. In considering these criteria, development in

Latin America may best be described as progressively transitional, continually

improving, yet still lacking stability and permanence in structure. This

apparent lack is causing disfunctionalism of governmental bodies to be

successfully consistent in altering the povertized sectors of society. The

ultimate pattern perpetuates the social stratifications of Latin America, which

only continue to erode the workings of development at large. To break such a

cycle, successful structural functionalism under governments of stability and

permanence must be achieved. Economics: Economics holds key importance in an

array of political and social workings in all areas of the world. The factor

making this sector a central component in successful development is that

economics often serves as the catalyst between developmental areas. Even in

basic terms as proposed in the modernization theory employed by authors Skidmore

and Smith, economics alters the society, and this in turn will play a crucial

factor in political outcomes, ? Latin America has occupied an essentially

subordinate or dependent position, pursuing economic paths that have been

largely shaped by the industrial powers of Europe and the United States. These

economic developments have brought about transitions in the social order and

class structure, and these changes in turn have crucially affected political

change.?(Skidmore and Smith, 42) Keeping this in mind, one applies this

background knowledge to the region of Latin America. Historically, the markets

and economies of Latin America have functioned with near absolute dependence on

the needs and conditions of foreign markets. Largely, this economic relationship

is referred to as dependency theory. This dependence was instilled from the

incipient colonization efforts of Spain and Portugal, which operated on the

monarchial duty of mercantilism; all efforts were done in honor of the mother

country alone. With the fall of colonialism and the onset of independent

government, two major transitions occurred. First, the newly independent

governments advanced peoples of European blood and descent into the majority of

political positions and a new upper class was established, ?Given these new

economic incentives, landowners and property owners were no longer content to

run subsistence operations on their haciendas; instead they sought opportunities

and maximized profits? (S+S, 45); this would later affect economics, politics

and society as a whole. Second, entry into a development period attempting a new

model of growth, focused primarily upon the creation and balance of imports and

exports. The outcomes of this period varied for different countries of Latin

America, mainly dependent upon the resources found inside their borders and the

desire of the outside world to invest within. Investment served as both the

promise and poison of this period. With the Industrial Revolution altering

production priorities around the world, less developed areas were sought to act

as a production center of natural and raw materials, ?Between 1870 and 1913

the value of Britain?s investments in Latin America went from 85 million

pounds sterling to 757 million pounds in 1913 ? an increase of almost ninefold

in four decades.? (S+S, 43) The importance of this transition is found in the

fact that investment in Latin America was made only to develop industry, which

produced raw materials necessary to fuel the industrial revolution in Europe and

the United States. The next phase of economic development was spurred primarily

by the Great Depression, and two World Wars. What both of these events

demonstrated was that if Latin America continued economic dependence to such an

extreme upon foreign markets then internal unrest would be felt by every

external, international unrest. For young markets and weak governments, such an

outlook could not be considered. Thus, a major economic trend developed under

the encompassing title of ? primary product import substitution,? which in

response to these realizations encouraged the creation and promotion of national

industry. To redirect market sectors toward the production of finished products,

not merely raw materials, as previously produced, ? By producing industrial as

well as agricultural and mineral goods, the Latin American economies would

become more integrated and self-sufficient. And, as a result, they would be less

vulnerable to the kinds of shocks brought on by the worldwide depression.? (S+S,

53) The final phase, following generalized periods of success and growth lead to

the inevitable realization that the world market was becoming exponentially

imbalanced. Impracticalities in the idea of Latin America becoming a world

trading partner of finished goods soon showed themselves as unemployment began

to rise from less demand on manual labor and wages failed to rise with prices on

the world market of more highly industrialized countries. Beyond wages however

was the more important loss of purchasing power from their goods, ?Over time,

the world market prices of Latin America?s principal exports underwent a

steady decline in purchasing power.? (S+S, 56) For the same amount of products

used in the past, less capital goods were being purchased. This marked the point

of entry for many countries into failing economies and debt. Governments, in

desperation, were at a point of decision, and the new answer came in the form

of, debt-lead growth and corporatism. Simultaneously, there was an international

trend of opening markets to practices of free trade. As governments

de-nationalized industry and took on increased loans from the IMF and World

Bank, inflation ensued throughout the economy, ?Between 1970 and 1980 Latin

America increased its external debt from $27 billion to $231 billion, with

annual debt-service payments (interest plus amortization) of $18 billion.? (S+S,

58) In exchange for debt relief, the IMF imposed restrictions on Latin American

economies, which were largely termed as ?structural adjustments.? These

practices were being followed at first, yet the initial periods of time proved

to burden primarily the lower classes and by-pass the elites, whose prosperity

was secured outside of the country?s direct economy. The long-term result of

economic reform has been the lowering of inflation, ?Excluding Brazil, average

inflation throughout the region dropped from 130 percent in 1989 to 14 percent

in 1994.? (S+S, 60) Brazil Brazil did not heed the advice of the IMF and did

not choose to undergo the stringent economic reforms of the 1970?s and 80?s.

Although the generalized trend was a lowering of deflation in the 1990?s,

Brazil fell short from that scenario and inflation soared. As reported by

Skidmore and Smith, the rate of inflation found in 1993 was 2490 percent

annually. In that same year a new finance minister was named, Fernando Cardoso,

with his title came a $122 billion foreign debt. (My Brazil) In 1994, a new

anti-inflation program was developed and this began to show results. Entitled,

the ?Real Plan,? its stringent economic reforms lead to improvements,

??consumer prices increased by 2% in 1998 compared to more than 1,000% in

1994.?(CIA World Fact Book) After initial improvements, Brazil became a victim

of the 1998 world economic crisis, which began in Asia, spread to Russia and

from there hit Brazil. Due to these pressures placed on the Brazilian currency,

interest rates were hiked 50%, and according to the CIA, investment fled the

country, ?Approximately $30 billion in capital left the country in August and

September.?(CIA World Fact Book) After receiving $41.5 billion in relief from

the IMF, Brazil entered a new phase of economic reform to incorporate both a

devaluation of the currency and a free floating exchange rate, ?On 13 January

1999, Central Bank officials announced a one-time 8% devaluation of the real,

and on 15 January 1999, the currency was declared to be freely floating.? The

immediate results from this are unable to be realized at such an early stage,

yet companies are leaving neighboring nations and heading for Brazil due to the

Brazilian devaluation, as reported in a recent ?Business Week? article, ?

The 35% slide of the Brazilian real against the Argentine peso is luring one

manufacturer after another north to Brazil.?(Business Week)The current

government under Cardoso can only speculate the outcome for now. Cuba Cuba has

served as a classic example of the problems and downfalls of a dependent market

system. The main commodity produced worldwide by Cuba is sugar, and being a

primary product, the price fluctuates internationally. Beyond traditional

factors that play into the economy of Cuba, one had remained fairly consistent

over the last two decades until 1992, when the collapse of the Soviet Union

ended any allied funding toward Cuba, ?By 1992 all Russian Economic and

military aid was gone. Oil shipments fell 86 percent from 1989 to 1992, while

food imports dropped 42 percent in almost the same period.? (S+S, 291). And,

as reported by the CIA, ?Havana announced in 1995 that GDP declined by 35%

during 1989-93, the result of lost Soviet aid and domestic inefficiencies.?

(CIA World Fact Book) This was the ultimate and shattering example of how too

much dependence upon any one market is unsound. This of course was only in

addition to the struggles endured from the US embargo already in place. Skidmore

and Smith goes on to report that in 1990, Cuba had a $6 billion debt. At the end

of the decade little improvement has been found, as in 1998 export earnings were

reported to have declined by 22%. (CIA World Fact Book). Most analysts speculate

that until Cuba is accepted into the capitalist West and expands from primary

products, the cycle will only continue to fail. Politics: An examination of

politics should logically follow economics, as the two are intrinsically

influential upon one another, as presented earlier. In considering economic

ramifications throughout Latin America, the prospects of colonialism begin such

a view. Latin America is an interesting case study due to the existence of

indigenous cultures in place throughout the region who were exploited by

European settlers and have attempted to culminate and blend as a single society

in the current day. The three primary civilizations of note, Mayan, Aztec, and

Incan, were each overcome by the conquistadors initially from both, Spain and

Portugal. Each region, being carved as a vice royalty to a distantly respective

monarchy, bowed to the pressures and duties of mercantilism. The colonies were

to serve the motherland and the motherland alone. The workings of the social

stratifications of Latin America begin as the European colonizers and indigenous

peoples develop a class society founded on the premise of dominance through

European ancestry. These class divisions were embodied in three separate

categorical races: peninsulares, whites born in Spain; criollos, whites born in

the new world; mestizos, the mixed Spanish and Indian blood race, and the few

indigenous peoples that survived the plague of disease brought on by the

Europeans. So began the complex social stratifications embodied within every

facet of culture and politics. With the defeat of the Spanish Armada,

symbolically the power of Spain was diminishing and thus, the ambitions of the

colonies were increasing. Charles III was the last in a succession of rulers,

which attempted to consolidate control over the colonies. This was attempted by

both re-designing the administrative system governing the colonies and allowing

free trade to occur from any of the ports to Spain, as contained in, the

?Declaration of Free Trade.? The unsatisfied colonies were finally forced to

loose allegiance to the crown when Napoleon removed King Ferdinand and placed

his brother upon the throne. Many see this as the fateful move, which lead to

colonial independence, ?Without Napoleon?s interevention the Spanish

American colonies might all have remained Spanish until well into the nineteenth

century, as did Cuba.?(S+S, 29) Napoleon?s action may not have caused the

rebellions alone, yet they served as an impetus for change. This change came all

too often tin the form of revolts and rebellions, yet slowly, the provinces

gained their independence and a new era of struggling to establish legitimacy

and stability in the established world order began. The economic troubles of

these early governments had begun before the leaders had even fully been

initiated into office and this economic frailty would follow these governments

for decades to come. The militant warfare and fighting of the nineteenth century

was due mainly to a combination of factors consisting of social stratifications

and economic inadequacies. These inadequacies lead to a period of military rule

throughout most of Latin America; some of this was phased in and out as others

forms official dictatorships, with an iron grip upon the people, Within a year

or so after the October 1929 stock market crash in New York, army officers had

sought or taken power in Argentina, Brazil, Chile, Peru, Guatemala, El Salvador,

and Honduras.? (S+S, 52). As economic troubles expanded, the role of the

military in government decreased, ?In this context of economic crisis, Latin

America turned way from authoritarianism ? and, in many cases, toward

democracy.? (S+S, 60) Generally the expanded middle class began demanding for

greater accountability within the government. This trend increased throughout

the twentieth century and today Latin America boasts an all time high in

democratically elected governments, with the continued exclusion of Cuba, and

this period of democracy may set the precedence for forms of government and

success in fulfilling the desires of a people. Argentina The governmental

situation within Argentina has been marked with considerable amounts of upheaval

and violence, even when gauged by Latin American norms. Within the decade of the

nineties much focus has been given to events in Argentina?s past, primarily

concerns, which focus upon the Dirty War. As President of the country, Menem had

begun a series of attempts to punish human rights offenses, which had occurred

prior to his tenure. This action prompted mass riots and several rebellions,

which posed serious threats and questions toward the legitimacy of government.

Menem ceded pardons and the issue gradually subsided, yet this serves to show

how actions and inactions of past regimes affect the governments of today. The

continued power of military influence upon government remains evident in

Argentina today. In 1994, as held by Skidmore and Smith, the constitution was

reformed for proclaimed reasons of efficiency and transparency, although some

viewed it as a maneuver by which to prolong the rule of Menem. Menem was indeed

successful in prolonging his term by winning the elections of May 1995. Under

Menem, much of the Argentinian foreign policy mirrored that of the US, ??

Menem adopted a foreign policy in line with the United States (the foreign

minister, indeed, was reported to have quipped that Buenos Aires was seeking

?carnal relations with Washington).? (S+S, 113) In October of 1999 elections

were held once again, this time favoring candidate, Fernando de la Rъa

Bruno by receiving 48.5% of the popular vote over contender Maldonado.

(Elections in Argentina) Chile Chile mirrors the haunting past of Argentina, as

former criminal acts are now on the forefront of the modern political agenda.

Only since the nineties has Chile consistently begun to follow democratic

procedure. This procedure has of course, included investigations of past human

rights abuses. The source of the conflict has most often come down to a single

man, Pinochet. The role of the military in the Chilean government is still

heavily felt in many sectors of government, most notably the judiciary; thus the

struggle continues to design democracy amidst military tradition, precedence,

and pressure. These pressures overall are beast summed up by Skidmore and Smith,

?Chile?s newly restored democracy also faced formidable obstacle: an

ever-alert army still headed by an unrepentant Pinochet, a pro-military

judiciary, a rightist-dominated Senate, sporadic terrorism from left and right,

and the explosive issue of what to do about past human rights abuses ? with

its potential to ignite civilian-military conflict.?(S+S,145) The presidential

election of 1993 brought victory to Eduardo Frei, the son of a former Chilean

President. The economic security and growth felt throughout the Chilean economy

during the nineties was a stabilizing effect upon government as well. The

elections held in December and Jamuary of this year introduced candidate Escobar

to the presidency (Elections in Chile). Escobar ran on a platform to decrease

governmental intervention in economics and increase focus and spending on public

works. This marks a notable transition from past military rigidness faced by

businesses and industry. Poverty: Stemming from the ?dependencia theory,?

the source of poverty throughout Latin America might possibly be postulated in

any number of manners. The fact remains that at some point a world based totally

on agrarian and manual labor, was altered by the industrial revolution. Latin

America was certainly chosen to be the warehouse of supplies and materials, not

the boutique boasting finished products. Once an economic cycle begins, it

becomes difficult to alter; many years later, international powers have

faithfully held the same positions, including Latin America. The fate of third

world is largely determined by a lack of economic opportunity, which many might

contend is ultimately inaccessible due to a lack of education. Mexico With a

population of 85 million people, Mexico boasts one of the largest citizenries,

yet also one of the lower standards of living.(S+S, 4) Together, high numbers of

people, with low standards of living, has made Mexico a country plagued with

poverty, and with that, higher rates of crime. The mid nineties brought further

economic crisis to Mexico as NAFTA had unpredictable effects on the Mexican

economy, ?Fearful of the overvaluation of the peso, investors withdrew more

than $10 billion from Mexico within a week.? (S+S, 261) This of course led the

US to create an emergency aid package, necessary to prevent default on Mexican

debts. The ultimate concern has and continues to be the direct connection

between market conditions and the welfare of people at large, which only shows

grim results for now, ?Between 1963 and 1981, according to one study, the

proportion of Mexicans below the poverty line dropped from 77.5 to 48.5 percent;

but from 1982 to 1992, under the pro-market reforms, it rose again to 66

percent. (S+S, 262) Haiti Considered to be the poorest country in the Western

hemisphere, Haiti serves as the ultimate of lowered living standards, ? With a

population of about 6.7 million, Haiti has a per capita income of approximately

$370. (S+S, 301) Originally colonized by the French, Haitian slave labor from

Africa eventually took over government. Following a political history of

violence and rebellion, Haiti still remains on the outer edges of political

stability. Aid amounts given to Haiti are high, yet the actual dispersion of

these funds is halted often if the government shows signs of internal fracturing

or corruption. Here is a list of aid currently being given to Haiti: United

States $458 million European Union $467 million Canada $133 million France $121

million Germany $76 million Japan $28 million Switzerland $20 million Holland

$12 million Other $140 million Multilateral Inter-American Dev. Bank $761

million World Bank (International Dev. Association) $377 million International

Monetary Fund $131 million U.N. Dev. Program $38 million Other U.N. $50 million

$2.8 billion (Center for International Policy) Education: Education is able to

be shown in direct correlation to one?s standard of living and thus, this

becomes a central issue on both the political and social agendas of Latin

America. The low budgets of Latin American governments often leave public works,

including education, on the bottom rung of priorities. Money is needed to

attempt to solve problems caused ultimately by a lack of education, instead of

being spent on education itself, thus this creates a problem of a self

perpetuating nature. Only in the twentieth century has this cycle of poverty and

dependence been actively pursued by increasing the quality and standards of

education, and political activism has been a central mode through which such

changes might be made. Peru Peru is highlighted under education to understand

the multi-facted uses of education in Latin America. Far from traditional

educational institutions, agrarian education as well as environmental education

has a far more valuable impact in these countries. ?Perumujer? is an NGO,

which spreads literacy throughout farming regions, yet more importantly, adds

components of conservancy and ecological education which not only allow the

Peruvians to farm more efficiently, yet bring higher yields of food using

smaller land area. Many of the storms throughout Latin America cause mudslides,

which kill thousands each year; most often this is due to barren hillsides,

which have been inappropriately farmed. Education in many countries focuses on

applicable and pertinent living skills and this can make an impact with

unlimited benefits. Costa Rica This island country is one general exception to

the trends of education in Latin America and thus is used as an example of

possible success in the educational sector. Over the last ten years, Costa Rica

has boasted a 93% literacy rating, far above the averages held by many tropical

neighbors.(Info Costa Rica.com) This exists as the most literate population in

Central America. In 1869 the Costa Rican government, having generated large sums

of wealth from the coffee industry made education mandatory and free. Then

having one the lower literacy rates, one in ten could read and write; Costa Rica

sets an uplifting trend that has developed over time. Not having a university

until 1940, Costa Rica now proudly has four such places of study and continues

to devote more money toward education annually. Students, under President

Figueres, are now required to take English, tying Costa Rica more closely into

the new economy and increasing success for tourism. (Info Costa Rica.com) In an

analysis of the structures in place in the areas of economics, politics, poverty

reduction, and education, one sees that the state of development in Latin

America is not neglected for sure-sighted tactics are consistently being

employed. The point of interest is that within all of these categories, most

political stability has not fully developed until the onset of the final decade

of the twentieth century. Development in Latin America is a priority and

examples of successes are amply available, even in the midst of setbacks. In

summation, the development of Latin America is progressively transitional. With

time, continued effort, and constant pursuit of democratic principles, the

development of Latin America will succeed.

Elections in Argentina by Wilfried Dirksen, 2000 http://www.agora.stm.it/elections/election/argentina.htm

My Brazil by Sergio Koreisha, 1997 http://darkwing.uoregon.edu/~sergiok/brasil.html

CIA World Fact Book: Brazil, 2000 http://www.odci.gov/cia/publications/factbook/br.html#econ

CIA World Fact Book: Cuba, 2000 http://www.odci.gov/cia/publications/factbook/cu.html

Business Week (International Edition), January 17, 2000 ?Adios, Argentina ?

Companies are Leaving for Brazil.? Elections in Chile by Wilfried Dirksen,

2000 http://www.agora.stm.it/elections/election/chile.htm Center for

International Policy; Haiti: Democrats vs. Democracy by Robert E. White http://www.us.net/cip/democrac.htm

Peru Mujer: Peruvian Literacy project http://www.literacyonline.org/explorer/peru_over.html

Info Costa Rica.com: Overview, Education http://www.infocostarica.com/education/general.html