News of the South

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News of the South
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Latin American US Relations

• 1947 Rio Pact leads to OAS
• Cold War
• Post WWII alphabet soup
• OAS Organization of American States
• 1948 in Bogota
• Regional cooperation with non-intervention
• Has been voice of anti-imperialism

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ECLA

• Economic Commission for Latin America
• UN agency 1948
• Raul Prébish Argentina economist
• Look at economic problems on a continental basis
• Colleagues could compare issues
• Prébisch ECLA thesis

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Prébisch ECLA Thesis

• Dependency theory
• Export-orientation led to bad development and
  doomed to the periphery
  
• Solution
• International commodity agreements
• Industrialize
• Protectionism
• Import substitution

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Import Substitution

• Strategy to promote local businesses (usually
  small scale) that produce goods which are usually
  imported
  
• Keeps money in the country
• Better path towards sustainability
• Export-based
• Larger corporations
• Less local control

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Kennedy Plan

• 1961 Alliance for Progress
• Economic development with social reform
• Countries submitted detail plans for funding
• Try to develop the middle
• Counter insurgency
• No more Cubas
• Much more military aid

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Alliance for Progress

• Difficult proposition
• Elected governments develop economy at same time
  instituting social reforms
  
• Chile Frei couldnt accomplish land reform it
  fell to the more radical Allende
  
• Brazil Janio Quadros (1961) tried and fell to
  military no social reform
  
• Venezuela more successful based on oil
• Colombia to be a showcase but little land reform
• Conflict between promoting democracy and
  preventing Cubas
  
• Failed policy by 1970

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1970s

• 1973 OPEC price hike
• Big jump in a basic commodity
• Loans from private banks they had the oil money
  to loan
  
• Tried to increase exports to pay loans Prébisch
  out
  
• Late 1970s credit extravaganza
• Banks had money plentiful loans
• Easy credit
• High interest

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Decade of Crisis

• 1982 The partys over
• Mexico cant pay back, Brazil follows
• Borrowed to pay back loans
• 5 6 of GDP to service loans
• IMF enforced austerity
• Latin American GDP fell 8.3 per capita
• Hit the poorest the worst

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Recent History

• Last 12 years
• Democratic politics
• Market economics reign supreme
• Passing of Cold War

• US
• Bush debt relief plan ends decade of crisis
• Bush and end of civil wars
• NAFTA FTAA
• 1994 first hemispheric meeting since 1967

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Problems

• Financial crises 1995 1998
• Growth down by 40
• Unemployment soared
• Renewed doubts about ability to compete
• Democratic setbacks Not Mexico
• Peru implodes Fujimori
• Colombia downward spiral
• Venezuela - Chavez

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Neo-Liberalism

• NAFTA starts under Bush I
• US, Canada, and Mexico
• Promises to expand
• Languished under fears in US and Latin America
• Most recent history of
• Growing external debt
• Export specialization
• Unequal exchange rates
• Lower purchasing power
• Domestic markets insufficient to overcome bad
  development

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FTAA

• Free Trade Area of the Americas
• Languished under Clinton
• Possibly resurrected under Bush II
• Brazil flexing muscles
• Dependent on Fast Track
• Deals can be made by executive
• Congress votes on entire package
• No amendments

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Vocabulary
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History 230-M