Latin America s Political Pendulum March 30, 2017
Because Mexico, Central and South America were dominated by languages derived from Latin, people began to refer to the area as "Latin America."
Latin America The name was promoted by the French. 1830 s the French said this area was populated by a Latin Race.
Latin America Therefore the people of this region should align with Latin Europe instead of Teutonic Europe Slavic Europe Anglo Saxon America.
Latin America Latin America" was first used in 1861 in La revue des races Latines Promoted by Napoleon III during the French invasion of Mexico in 1861.
Is this Area Really Latin America?
The United Nations Description Latin America and the Caribbean
Latin America and the Caribbean
What is Latin America? The broadest definition is all of the Americas south of the United States.
Latin America Northern border of Mexico to the southern tip of South America 19 sovereign states and several territories 7, 412,000 sq. miles or 13% of Earth s land surface 626 million people( 2015) Combined GDP of 5,573,397 million USD
Latin America s Political Pendulum
Latin America s Political Pendulum The Political Pendulum The resurgence of the left A more aggressive foreign policy Commodity Super Cycle: From boom to bust Economic stagnation and political turmoil The era of pragmatism Policy Options for the U.S.
Today s Topics The Latin American Pendulum Two important forces that act on the pendulum Demographics Latin American History
WHAT IS A POLITICAL PENDULUM?
Waves and Reverse Waves
DEMOGRAPHICS
Ethnic Groups Latin America is one of the most diverse regions in the world. The specific composition of the groups vary from country to country. Some of the groups are: European Mestizo Amerindians African Mulattoes
Ethnic Groups
Ethnic Groups
Languages
Religion
Ten Largest Cities
Education Latin America has made great progress in educational coverage in the last 10-20 years. Almost all children attend primary school and access to secondary education has increased considerably.
Education Quality issues such as poor teaching methods, lack of appropriate equipment and overcrowding exist throughout the region. These issues lead to adolescents dropping out of the educational system early.
Education Currently, more than half of low income children or people living in rural areas fail to complete nine years of education. Out of 17 million students in higher education, Brazil, Mexico and Argentina account for 10 million.
Crime and Violence Most dangerous regions in the world 1980s-90s homicide rates increased by 50% 69% of the victims are men 15-19
Crime and Violence Countries with highest homicide rates (2014) Homicides per 100,000 Honduras 75 El Salvador 64 Venezuela 62 Jamaica 36 Belize 34 Guatemala 31 Colombia 28
Crime and Violence Countries with highest homicide rates (2014) Homicides per 100,000 Trinidad & Tobago 26 Brazil 25 Puerto Rico 19 Dominican Republic 17 Mexico 16 Costa Rica 10
Crime and Violence Countries with the lowest homicide rates (2014) Homicides per 100,000 Chile 4 Peru 7 Argentina 8 Uruguay 8 Ecuador 8 United States 4.9 2015 FBI
The Economist 2014
Population Source: CELADE/ECLAC population estimates and projections, 2007.
Population
Population
Population When there is a large pool of workers with a small number of dependents to support it creates a situation that is highly favorable for economic growth. This is called the Demographic Dividend
Population Ratio of Dependents to Workers Dividend 1 Above 66/100 90/100 80/100 70/100 Unfavorable economic growth
Population Ratio of Dependents to Workers Dividend 3 Below 66/100 63/100 64/100 65/100 Becoming unfavorable for economic growth
Population Ratio of Dependents to Workers Dividend 2 Below 66/100 65/100 60/ 100 55/100 Demographic Dividend Most favorable for economic development
Population Ratio of Dependents to Workers Dividend 1 not favorable for economic growth Dividend 2 favorable for economic growth Demographic Dividend Dividend 3 favorable but moving toward slowed economic growth
Population Demographic Dividend Mexico 1950 80 Children 10 Old age support 2015 40 Children 15 Old age 90/100 55/100 Dividend 1 Not favorable for economic growth Dividend 2 Demographic Dividend
Source: CELADE/ECLAC population estimates and projections, 2007.
Dividend 2
HISTORY
Pre-Columbian Latin America has been populated for several millennia, possibly for as long as 30,000 years. Highly developed civilizations flourished at various times and places.
Pre-Columbian Aztec Mayan Inca
Colonial The major sea powers in Europe Spain, Portugal and England Sent expeditions to the New World to build trade networks and colonies.
Treaty of Tordesillas 1494
Colonial Native culture and religion were forbidden under Spanish rule. The Spanish even went as far as burning the Maya Codices ( books). These codices contained information about astrology, religion, Gods, and rituals.
War of Spanish Independence (1808 14) Spain and France were allies in the 18 th century After the French Revolution, Spain was invaded by France
Latin American Independence Most of Latin America achieved its independence by 1825.
American Independence Prior to 1765 England treated the colonies with benign neglect Smuggling had been tacitly accepted for over 100 years Britain s government expenditures were four times higher than revenue
American Independence After the Seven Year s War ended in 1763 Great Britain s national debt doubled London clamped down on smuggling and instituted more taxes Parliament passed the Stamp Act in 1765 Tea Act of 1773
Age of the Caudillos The nineteenth century has been considered the "Age of Caudillos" A caudillo was a military-landowner who possessed political power and exercised it in an authoritarian manner.
Age of the Caudillos A Latin American ruling class arose that avoided avoided Spanish and Portuguese models in their quest to reshape their societies. This elite looked towards other Catholic European models in particular France for a new Latin American culture, but did not seek input from indigenous peoples.
Age of the Caudillos The export of natural resources provided the basis of most Latin American economies in the nineteenth century. This led to the development of wealthy elite. It resulted in a sizable gap between rich and poor.
Age of the Caudillos In Brazil, for instance, by 1910, 85% of the land belonged to 1% of the population. Gold mining and fruit growing, in particular, were monopolized by these wealthy landowners. These "Great Owners" completely controlled local activity were the principal employers and the main source of wages. This led to a society of peasants.
Age of Liberalism 1800s 1930s The Age of Liberalism political regimes were democratic, in theory, and were either presidential or parliamentary. It was a time of political instability led by caudillos and oligarchs who wanted to preserve old social hierarchies.
Age of Liberalism 1800s 1930s The political landscape was occupied by conservatives who believed that the preservation of the old social hierarchies served as the best guarantee of national stability and prosperity, and liberals who sought to bring about progress by freeing up the economy and individual initiative.
Age of Liberalism 1800s 1930s Insurrections were common. They were violently suppressed. 100,000 were killed during the suppression of a Colombian revolt between 1899 and 1902
Age of Liberalism 1800s 1930s Some states did manage to have some of democracy: Uruguay, Argentina, Chile, Costa Rica and Colombia. The others were clearly oligarchist or authoritarian although some enjoyed support from a majority in the population.
Age of Liberalism 1800s 1930s All of these regimes sought to maintain Latin America's lucrative position in the world economy as a provider of raw materials. Latin America produced around 80 percent of the world's silver in the 16th through 19th centuries.
Age of Liberalism 1800s 1930s A time of war as nations struggled to find their national identity Brazil took large swaths of land from its neighbors Paraguayan War(1864 70) Argentina, Brazil and Uruguay War of the Pacific (1879-84)Chili defeated Bolivia and Peru. Mexican Revolution
Age of Liberalism 1800s 1930s Mexican Revolution 1910-1920
Age of Liberalism 1800s 1930s 1910 1920 Mexican Revolution The Mexican Constitution of 1917 First Constitution to set out social rights Put restrictions on the Catholic Church Provided for a free and secular education Instituted Land reforms Empowerment of the labor sector
Age of Liberalism 1800s 1930s Foreign Intervention 1823 United States Monroe Doctrine 1846 Mexican War 1861 Spain, England and France landed in Veracruz in order to seize unpaid debts from Mexico
Age of Liberalism 1800s 1930s Foreign Intervention The United States continued to directly defend its interests in the region. Big Stick Doctrine Platt Amendment Colombia U.S. supported the Panamanian insurrection and back independence so the Panama Canal could be built. Central American incursions to defend American commercial interests Banana Wars
Age of Liberalism 1800s 1930s This was a time of world trade Buenos Aires was known as the Paris of the West. Era of large amounts of foreign debt from wars and downturns in the market
The Great Depression World demand for raw materials drastically declined hurting the economies of Latin America. This led to the First Reverse Wave.
First Reverse Wave
20th Century 1980-2000 Lost Decade of the 1980s Latin American countries reached a point where their foreign debt exceeded their earning power and they were not able to repay it. Latin America was in a crisis The West responded, in 1989, with the Washington Consensus
Washington Consensus Washington Consensus 1990s -2000 A standard reform package promoted for crisiswracked developing countries. One size fits all.
Washington Consensus It was a set of 10 economic policy prescriptions promoted by Washington, D.C. based institutions : International Monetary Fund World Bank US Treasury Department
Washington Consensus Low government borrowing. Avoidance of large fiscal deficits relative to GDP Tax reform broadening the tax base and adopting moderate tax rates
Washington Consensus Privatization of state enterprises Deregulation: abolish regulations that impede the market Legal security for property rights.
Neoliberalism and the Washington Consensus During the 1990s Latin America failed to produce sustained growth and stability. The neoliberal economic policies of the Washington Consensus became increasingly unpopular for many Latin Americans.
Neoliberalism and the Washington Consensus Once praised as models of successful economic management, countries where the Washington Consensus was applied with the most vigor suffered the worst. Great Decisions 2017
The Resurgence of the Left In one country after another, citizens rejected promarket forces and looked for alternatives. In the 2000s leftist countries emerged. They were committed to social policies and addressing inequality.
The Resurgence of the Left They were anti American They rejected parts, if not all, of the Washington Consensus. This swing of the pendulum to the left is known as the Pink Tide.
Pink Tide
The Pink Tide Venezuela 1999 Hugo Chavez takes control of the country He imposes state control over the economy He sends subsidized oil to Cuba, and impoverished nations of Central America and the Caribbean.
The Pink Tide Venezuela Oil prices climbed from less than $10 a barrel to over $100. Chavez used this income to expand access to: Public services Education and health
The Pink Tide Bolivia 2005 Evo Morales becomes the country s first indigenous president A new constitution is drafted recognizing indigenous rights, nationalizing the natural gas industry and legalizing coca.
The Pink Tide Ecuador and Nicaragua 2006 Rafael Correa becomes president and aligns with Chavez s socialism. 2006 Nicaragua, leftist Daniel Ortega, returns to power.
The Pink Tide Moderates Not all nations on the left were authoritarian Some nations respected democratic institutions, the rule of law, the role of the private sector and the importance of foreign investment. Basically they accepted most of the Washington consensus but with more social programs
The Pink Tide Moderates Chile increased social spending but kept most pro market policies of Pinochet(1973-90) Brazil, under Lula, implemented a pragmatic economic policy that boosted Brazilian companies and lifted millions out of poverty Argentina, under the Kirchner s, fashioned a policy between Lula and Chavez.
Latin American Countries not Part of the Pink Tide Colombia remained conservative and was a close ally of the United States. Mexico became conservative under the leadership of Vicente Fox (2000-06) and Felipe Calderon(2006-12). Mexico became intertwined with the U.S. economy after NAFTA.
The Pink Tide and Economic Growth During this time, 2003-2013, Latin America was in its Demographic Dividend. Trade with China went from little over $ 12 billion in 2003 to more than $ 289 billion ten years later. The demand for commodities produced by most South American countries including soy, minerals, oil and others increased dramatically, lifting international prices and generating a massive influx of resources.
The Pink Tide and Economic Growth 2003 2013 Unprecedented economic growth in South America due Economies grew by 3.6% annually GDP per capital rose by 2.4% Poverty rate fell from over 40% to 25% Extreme poverty fell from nearly 25% to 12%
The Commodity Bust The commodity boom began to slow down in 2014 as Chinese demand decreased. Since 2014 economic growth has been lower than the world average Poverty has increased and recent social progress programs are weakening.
New Leader Emerge New leaders are emerging who promote economic growth and strengthen democratic institutions Mauricio Macri, Argentina s new president, has launched economic reforms and restored relationships with the U.S. and Europe
New Leaders Emerge Michel Temer in Brazil and Pedro Kuczynski in Peru and are making economic reforms promoting pro market economies
... political changes taking place in the region are more related to economic conditions and the natural erosion of long-term incumbents than ideology. Foreign Policy Association. Great Decisions 2017
Economics Factors Influencing the Pendulum Demographic Dividend History Accustomed to hierarchal authoritarian rule not democracy Reliance on exported raw materials and commodities
Factors Influencing the Pendulum Will Latin America s pendulum continue to swing from democracy to extremes on the left and right? What can Latin America do to prevent these extreme movements of the pendulum?
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Latin America s Political Pendulum