Latin American economies have had their ups and downs in the past. Different policies and ways to improve the economy have flourished and some have failed miserably. Some simply did not last as long as they thought it would. Things like import substituting industrialization had a huge impact on Latin Americas economy. World War 2 opened a lot of doors for Latin America in terms of trade and industrialization. They gained access to imports from Europe, Japan and the US. The US wanted to acquire raw materials from Latin America. With all these opportunities popping up, Latin people got a chance to really start industrializing. The idea of a newer economic philosophy called import-substituting industrialization. “Import- Substituting Industrialization (ISI), derived from dependency theory, because the dominant economic policy of the post-World War II period” (Hillman 152). Industrial production went up more than 30% between 1938-1945 because of Import- Substituting Industrialization and helped Latin America make a healthier economy that could sustain itself. “If income was concentrated at the top of the distribution, then the lower income groups would not constitute a market for local production; in this case, the benefits of exports would not initiate a self-sustaining process of economic growth,” (Hillman 152). The Latin countries changed their economic philosophy because of the uneven distribution of land and wealth and income equality were running rampant. Import-Substituting Industrialization in these countries started a self-sustaining process of economic growth. In between the 1950’s and the 1970’s, Import-Substituting Industrialization was very successful. “Industrial Production grew at the rates of 5.2 percent, 6.3 percen...
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...eso was equivalent to one American dollar so the peso money supply depended on the quantity of dollars that the currency board possessed so that the government could not print any more to pay for its deficits. The problem was that dollars flowing outwards would decrease the money supply and the government could not pay for its budget deficits since they could no longer print any money. In 1994, the Mexican government lessened the value of a peso. Because of this, they lost a ton of trades and investments. Neo liberalism had the worst effect on Mexico “wages declined 40 to 50% in the first year of NAFTA while the cost of living rose by 80%. Over 20,000 small and medium businesses have failed and more than 1,000 state-owned enterprises have been privatized in Mexico. As one scholar said, ‘Neoliberalism means the neo-colonization of Latin America.’” (Martinez, Garcia).
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