The Economic Factors Prevalent in Latin America

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The Economic Factors Prevalent in Latin America
There are numerous factors that heavily influence and affect the economy, and in Latin America, some of these are export dependence, import substitution, debt crises, and trade agreements.
Export dependence is the reliance of a country on exporting primary goods. The main export products of Latin America are from mining and agriculture. This is common in developing countries to boost their economy and in inserting their products into the global market.
Import substitution refers to the prioritization of the use of local goods and products over foreign goods to promote self-sufficiency of the country reduce the country’s dependence on imported products. This was adopted by Latin America from the 1930s to the 1960s. Despite the advantages of import substitution, it also has disadvantages such as unsustainability and isolation of Latin America resulting to stunted and limited economic growth.
Debt crises happened in the 1980s when Latin America borrowed financial resources from international markets that the gross domestic product (GDP) of the country is able to produce. A debt crisis leads to issues such as slow economic growth, unemployment, and poverty.
Free trade agreements such as NAFTA aims to abolish the investment barriers, such as tariffs between the involved countries. This promotes globalization and efficiency in exporting services and goods. Also, the liberalization of trading specifically a multilateral decrease in tariffs, and the increasing number of regional trade agreements also support this trend. These agreements will impact Latin America by facilitating the huge potential for economic development and performance that is fueled by international trading (Hannan, 2017).
Climate Change: Impacts on China and Japan
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