POL305Y1 Lecture Notes - Corporatism, Statism, Cuban Revolution
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Lecture#7-Military Rule and Statism in the Andes
i) Soldiers, Oligarchs and the popular Sectors
Andes Mountain divides the length of South America from top to bottom. They define the economy and
organization of Andes. It has Bolivia (de facto capital of this country is the Andes). Moreover, it is the
world’s largest capital city.
On the west size, there are coastal plains, there are valleys. The Amazonian lowlands as they
reach toward Brazil.
Andes are known for their weak institutions, strong class/ethnic divide esp. In the central Andes.
Low levels of economic growth are all factors.
Political and economic indicators (2010)
Poverty and the exclusion of indigenous people. There are also dictatorships. There is so much
inequality in these various countries.
Even though, they share the same structural indicators and circumstances, their history is very
Case Study: Peru: From Guano to Minerals
Dry Desert: Guano (Bird droppings) which is fertilized by the sun. Lots of nitrogen.
o Great fertilizer for crops and is what fueled the economy of Peru
In the early 1860s80% of Peru’s economy was dependent on the source.
By the 1880s, the end of Guano period b/c the bird could not keep up with the demand.
IN 1890, there were mini booms in the diversity of their economy (export booms)
1890s-1930s: Rubber from rubber trees, sugar from coastal plantations, cotton on their coast,
wool (sheep), copper in the mountains (with US investment), and then later, there was oil on
the coast of Peru with US and Canadian investment.
o The mini booms in each area had the country do well.
Great DepressionEconomy DID NOT TANK for them. Instead of ISI, Peru went through ELI
instead. (in cooperation with foreign investment)
Bolivia: Silver, Tin and Gas
One family controlled the monopoly on Tin where in 1929, their production was about 47 000
metric tons of Tin.
Early 1900s 15 000 metric tons.
Long history of revolt. Mining was central part of economy; you have militant workers when
they are mixed with urban people. The only country in Latin America to have revolution in 1952.
Great Depression destroyed the Tin industry and compared to other Tin industries in the world,
Bolivia had the lowest quality. Moreover their transportation costs were much too high.
What did they do in 1932?
o Attacked Paraguay.
1932-Chaco War (1932-1935)
Between Bolivia and Paraguay over control of the Northern part of the grand Chaco, which was
incorrectly thought to be rich in oil?
Critics of the war, was stating how Bolivia’s president was trying to cause a distraction.
This war pitted the two poorest countries against one another. There was a highly difficult time
to adapt to fight against the Paraguay army (thanks to the environment)
In 1935, Bolivia lost the section of Chaco to Paraguay but anyhow gained oil in the future.
The Chaco war saw the return of Paraguay Veterans fighting. They were good at what they did
since they were always attacked.
Bolivia eventually lost and 65 000 people were killed.
Ecuador: From Cacao to Bananas to Petroleum
Economic power comes from coast not highlands.
No guerilla fights, populism was big,
Ecuador did not want pollution from mining (recent events)
1880s: Cacao (to make chocolate) and the country was responsible for 15-20% of World’s
o Non labor and non capital intensive industry
Thrived along the coast, instead of promotion infrastructure, the government opted for the river
rather than building roads.
By 1915, other countries were growing cacao and so they lost out on the industry (brazil)
IN 1948, Bananas were produced with multinational companies. First period of sustained
economic growth in the country.
Ecuador did not have an industry till this time….small and medium farmers and it created more
demand for domestic market.
In the 1960s: the oil produced the third boom. Petroleum fields was transformed the country to
the third largest country of oil behind Venezuela.
IN 1972, there was pipeline from Amazon to coast. IN 1971, the country earned 43 million from
oil and by 1974; it was up to 350 million.