Latin American Economic Evolution: From Revolution to Democracy

Latin American Economic Evolution

Phase 1: Industrial Revolution's Impact

• The Industrial Revolution led to changes in Latin American economies.
• Industrialization caused a strong demand for food and raw materials.
• Economic growth in the 20th century, driven by export-import activities, brought about social transformations, including:
  • Modernization of the upper class
  • Emergence of new professions and services
  • Political changes, diminishing the role of strongmen, with the elite becoming more interested in national politics.
• Political authority was sought in two forms: elite landowners and governments taking direct control of reform.

Phase 2: Expansion of Growth

• Increased exports improved the economy.
• European migration met labor demands.
• Cities grew due to work opportunities and rural-urban migration.
• Democracy was challenged by the lower classes.
• National elites adapted policies to remain in power.

Phase 3: Import Substitution Industrialization (1930-1960)

• Reduction of imports.
• Unit prices fell.
• Political systems faced great pressure.
• The working class increased in size.
• The Latin American economy began to produce manufactured goods.
• Forms of capitalism emerged, including business and industrial bourgeoisie.
• Industrial growth occurred.
• State interventionism increased.
• Populist, semi-authoritarian regimes represented class interests and aimed to resolve conflicts.

Step 4: Stagnant Growth Based on Import Substitution (1960-1998)

• A time of crisis.
• Economic and political problems arose.
• Replacement import industrialization occurred.
• An incomplete industrial structure developed.
• Industrialization did not lead to complete independence.
• Domestic demand for manufactured goods remained low.
• Pressure increased, leading to military coups.
• High-ranking bureaucrats were appointed.

Step 5: Crisis, Debt, and Democracy

• Economic growth depended on loans from the East in the 1970s, linked to petroleum production and prices.
• Debt increased due to loans, under duress of merchandise and navigation of loans, and rising interest rates.
• An economic crisis ensued.
• Foreign markets were opened to reduce debts in the 1980s, but this increased debt.
• A return to democracy saw citizens claiming rights.
• The far-left political sector fell into crisis.
• A significant portion of the population was poor, with high-income inequality.
• Inclinations toward authoritarianism, intermediate-level directorial, and incomplete democracy were present.