Latin America Essays - Development Economics, International Trade

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