With respect to economic factors in Latin America History Essay

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Part A: With respect to economic factors in Latin America describes;
Export dependence
Latin America's economy has always depended on the export of commodities among the countries within the Latin America region, including countries in South America, North America, and the Caribbean region. The region is a mix of developed and developing countries, all of which depend on each other for various goods (Paus, 2019). The United States, for example, is a developed economy that has served as the biggest market for most of the Mexican oil and agricultural imports. Brazil is a manufacturing country whose economy dependents exporting manufactured goods to other countries within the region. Latin America’s economy is structured in such a way that different countries export particular commodities different from other member countries.
Import substitution
Import substitution is a trade policy that drums for reducing the dependency of a country on imported goods and services. The policy states that a country should try to minimize foreign dependence through producing its local industrialized products. In Latin America, import substitution policies were adopted between the 1930s until the late 1980s (Tavares, 2016). The countries that import substitution were countries with huge population and income, which provide an excellent platform for the consumption of local goods and services. Examples of countries with such factors include Mexico, Argentina, Brazil, Chile, Uruguay, and Venezuela. Poorer countries like Ecuador and Honduras, however, could only implement import substitution to a limited extent. It led to a change of governance in states where import substitution was implemented into more democratic ones. A section of economists claims import substitution failed in Latin America and led to the lost decade. However, others feel that it had a significant impact on the development of the countries.
Debt crises
The crisis originated in the 1960s and the 1970s. During this period, Latin American countries like Brazil, Argentina, and Mexico borrowed loans from international lenders, including the World Bank. In 1975, Latin America’s debt increased three times from $75 billion to beyond $315 billion in 1983, which was approximately 50% of the gross domestic product, GDP of the region. The interest rates increased from $12 billion to about $66 billion, which was beyond the countries repayment capabilities (Wionczek & Tomassini, 2019). The debt increase at that time went up to about a thousand percent. The crisis increased the poverty levels and expanded the gap between the rich and the poor. The effects of the crisis forced members from low-income families to engage in crime, prostitution as well as terrorism.
Unable to pay the loans, the affected Latin American countries sought help from the International Monetary Fund, IMF, to pay the loans. IMF, in turn, forced these countries to adopt policies that promote free trade capitalism hence further deepening the poverty itch. The IMF also coerced the affected Latin American countries to implement strategies that lowered spending in a bid to help them recover from the crises. The government policies on s...