Understanding Latin America's International and Economic Relations with Import Substitution Industrialization Model
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Prior to analyzing the ISI (Import Substitution Industrialization) model, it’s benefits as well as its shortcomings, a small introduction of how it came to be and why must be provided. As a product of the 1930s economic crisis and wear and tear of the liberal model, ISI appears in Latin America as another economic option, proposed by ECLA (Economic Commission for Latin America, dependent of the UN) as a means of bringing Latin America out of stagnation and work towards industrialization to eliminate its dependency on agriculture which was seen as vulnerable.
There are two critical ways in which this model must be examined, theoretically as well as its concrete outcomes and policy implications within Latin American states. By looking at these, one is able to further understand the center-periphery international relations as well as Latin American approaches to economic development.
Theoretically speaking, ISI has been one of the main issues examined by the Structuralist model amongst others such as terms of trade, the effect of agrarian structure as a block to economic progress as well as inflation. This theoretical paradigm describes the social and political relations after the Second World War. Raúl Prebisch, an Argentinian economist and head of ECLA (which later incorporated the Caribbean), and Celso Furtado, a famous Brazilian economist, are those who contributed to the structuralist interpretation and study to highlight Latin American development, or lack thereof. This theory shows that development and underdevelopment are deeply intertwined; it believes that the developed countries, such as the US post-WWII and England prior to, have helped maintain underdevelopment within the periphery through IDL (international division of ...
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... of ownership subsists, attempts to solve the problem of the Indian will remain forgotten in the denunciation process. He argues that the land was originally communal, and that the ‘conquistador’ introduced feudalism, which continues until today, disrupting the rhythm of national progress in the form of gamonalismo and the latifundio. Against the existing selfish gamonalista, communities constitute a lucid protest and a necessary reaffirmation of the righteous.
As a conclusion, although Structuralist and Dependency theories are aware of the land tenure system and the repercussions it has had on society as well as the center-periphery relations. The rise of inequality and underdevelopment that is found within these two schools, they fail to include the involvement of the indigenous and the effect these processes have had on the Incaica society and economic structure.