Question

Identify a historical event that you feel, contributed the most to a country's economy in Latin American, and then engage in the discussion.

• Identify the event, when it occurred,
• Explain why you feel it contributed the most to the Latin American economy.
  • Did it impact the country's main economic resources, average income, GDP, Per capital GDP, health care situation, exchange rate, literacy rate, etc?
• Discuss the future impact that you feel this historical event may continue to have.
• Explore whether the influence was positive or negative, and explain why

Answer 1

The great depression of 1930 was an event which posed great challenge to Latin America.

The world economy collapsed and demand for raw materials declined and economies of Latin America suffered . Latin America turned towards import substitution industrialization.The aim of Latin America was to have self sufficient economy and have own industrial sector.President Roosevelt favored the nationalization of some .American companies in Latin America.

The great depression forced many Latin American governments to take important decisions in exchange rate , fiscal and monetary policies.This period marked the American transition towards inward development rather than export led growth.There was exchange rate devaluation .Brazil was affected a lot by great depression.Coffee export fell by 50 %. Foreign investments became zero.Sugar production was stopped.However living standards rose rapidly between 1930 to 1970 because of state intervention.Per capita income was comparable with Europe and Asia.There was extension of health care and education. All these were possible because of industrialization.

Reduced foreign demand for Latin American goods will cause gold and foreign exchange reserves to move out of the economy at a faster rate than gold and foreign exchange entered the economy.There will be deflation in the economy and exports might reach a lower level which might in turn lead to fall in employment..

The influence of the great depression was positive to the extent that industrialization started in Latin America and it became self sufficient.. However the decline of exports was a negative consequence of the great depression.