FREE ESSAY ON THE CURRENT STATE OF DEVLOPMENT IN LATIN AMERICA

THE CURRENT STATE OF DEVLOPMENT IN LATIN AMERICA

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 Rua 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. 
Bibliography
Works Cited
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