Economic history of Latin America

The north–south axis of Latin America, with the little east–west continental area, meant that movement of people, animals, and plants was more challenging than in Eurasia, where similar climates occur along the same latitudes.

[2] The sizes of indigenous populations, their organizational complexities and their geographical locations, especially the existence of exploitable resources in their vicinities had a major impact on where Iberians at contact, chose to settle or avoid in the late fifteenth and early sixteenth centuries.

[10] In northern Mexico, the southern part of South America, and in Amazonia, there were populations of semi-sedentary and nomadic peoples living in small groups pursuing subsistence activities.

In the tropical rain forests of South America, the Arawakan, Cariban, and Tupian peoples lived, often pursuing slash-and-burn agriculture and moving when soil fertility declined after a couple of planting seasons.

[20] In Peru silver mining benefited from its single location in the zone of dense Andean settlement, so that Spanish miner owners could utilize the forced labor of the prehispanic system of the mita.

These furnaces were cheap, and “it was the preferred technique of the poor individual miner or of the Indian labourer who received ore as part of his wage.”[26] However, certain historians argue that the process of smelting was extremely destructive to the natural land surrounding the mines.

The Chichimec War lasted over 50 years, with the Spaniards finally bringing the conflict through supplying the indigenous with food, blankets, and other goods in what was terms "peace by purchase," securing the transportation routes and Spanish settlements from further attack.

Brazil, Venezuela and islands in the Caribbean, cultivated sugar on a huge scale, using a labor force of African slaves traded to the tropics as an export commodity from Africa, dating from the earliest period of Iberian colonization until the mid nineteenth century.

Most manufactured goods for elite consumers were mainly of European origin, including textiles and books, with porcelains and silk coming from China via the Spanish Philippine trade, known as the Manila Galleon.

At independence in the early nineteenth century, Spanish America and Brazil had no foreign investment or direct, legal contact with economic partners beyond those allowed within controlled trade.

[citation needed] Latin America's political independence proved irreversible, but weak governments in Spanish American nation-states could not replicate the generally peaceful conditions of the colonial era.

[58][59] Britain sought to end the African slave trade to Brazil and to the Spanish colonies of Cuba and Puerto Rico and to open Latin America to British merchants.

Given the lack of navigable river systems, which had facilitated economic development of the United States, the innovation of railroad construction overcame significant topographical obstacles and high transaction costs.

"[67] In some cases, railway lines did not produce such wide-ranging economic changes, with directly linked zones of production or extraction to ports without linkages to larger internal networks.

Brazil, Venezuela, Colombia, Guatemala, El Salvador, and Costa Rica became major coffee producers, which disrupted traditional land tenure patterns and necessitated a secure workforce.

Silver declined as a major export, but lesser minerals such as copper and tin became important starting in the late nineteenth century, with foreign investors providing capital.

Following independence, most Latin American countries tried to attract immigrants, but only after political stability, increased foreign investment, and decreasing transportation costs on steamships, along with their speed and comfort in transit did migrants go in large numbers.

[93] In the post–World War I period, Germany was eclipsed from trade ties with Latin America and Great Britain experienced significantly losses, leaving the United States in the dominant position.

[102] With the outbreak of World War II in 1939, Latin American trade with Germany ceased due to the insecurity of the sea lanes from German submarine activity and the British economic blockade.

In Bolivia, the 1952 revolution under Victor Paz Estenssoro overturned the small group of businessmen controlling tin, the country's main export, and nationalized the industry, and decreed a sweeping land reform and universal suffrage to adult Bolivians.

Under its second director, Argentine economist Raúl Prebisch (1950–1963), author of The Economic Development of Latin America and its Principal Problems (1950), CEPAL recommended import substitution industrialization, as a key strategy to overcome underdevelopment.

Most funded projects are economic and social infrastructure, including "agriculture, energy, industry, transportation, public health, the environment, education, science and technology, and urban development.

Frei had defeated Allende in the previous presidential election (1964) in good part because he promised significant reform without serious structural change to Chile, while maintaining rule of law.

[127] As Latin American countries became more open to foreign investment and export-led growth in manufacturing, the stable post-war financial system of the Bretton Woods agreements, which had depended on fixed exchange rates tied to the value of the U.S. dollar was ending.

Creditors were eager to invest in Latin America, since in the mid-1970s real interest rates were low and optimistic commodity forecasts made lending a rational economic decision.

President José López Portillo (1976–82) broke with long-standing treasury practice of not taking on foreign debt, and borrowed extensively in U.S. dollars against future oil revenues.

Mexico's economy had crashed in 1982, and it began shifting its long-term economic policies to reform finances in 1986, but even more significant change came under the government of Carlos Salinas de Gortari (1988–1994).

Although trade barriers fell with GATT and the WTO, the requirement that all member states be treated equally and the need for all to agree on terms meant that there were several rounds of negotiations.

Other agreements include Mercosur was established in 1991 by the Treaty of Asunción as a customs union, with member states of Argentina; Brazil; Paraguay; Uruguay and Venezuela (suspended since December 2016).

A report by the Global Knowledge Partnership on Migration and Development (KNOMAD) estimates for 2017 that remittances to Mexico would be $30.5 billion, Guatemala $8.7B; Dominican Republic $5.7B, Colombia $5.5B; and El Salvador $5.1B.