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Globalization and the Challenge of Development 2.docx

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Global Studies
Timothy Clark

Globalization and the Challenge of Development East Asia and Latin American Comparative Perspective  Asian countries GDP increased, was less than Latin America first, then surpassed them and got closer to Europe What Happened?  Inequality and underdevelopment o because of inequality, some people began to pursue socialist means to create equality o the importance of land form  countries with more equal land distribution grow faster  autonomous versus Oligarchic States  land and state autonomy o autonomous state = not controlled by select few  oligarchy is ruled by the few o in Latin America, powerful people were able to control the land and influence the political system  public investment and education o national versus elite priorities  more education = more salaries, better quality products, more equitable distribution of income  most of the public investment is tailored to free university education, but only those who went to private schools from grade 8 - high school could go to these, (Latin America, tailored to elites)  whereas in South Korea and Taiwan, education was more towards public schools (because no land elite)  the role of the United States o the "Cold War" effect  U.S. was concerned about south Asian countries going to communism, so U.S supported Latin America  U.S. helped promote equality in south Asian countries, to keep them from going communist  an uncomfortable question: is sustained and rapid economic development compatible with democracy? o most weren't democracies during this economic growth o ex: South Korea and China were dictatorships when they went through economic growth  China in last 30 years (communist) The Fall of ISI and the Neoliberal Critique  why did ISI fail? o inefficiencies and limited markets  strong state protections, products weren't competitive across borders  because Latin America found no international market, once it had grown to support its own market, it couldn't grow any farther o stagnation and instability  produced stagnation in Latin America  political system began to destabilize, began to produce more left wing political movements (socialism) o deficits and debt  as growth began to slow, governments began to borrow more and more money to create new industries to try to stimulate growth  the OPEC and Volcker Shocks  came from OPEC oil producers, oil prices exploded and those countries with oil put their money into developed countries who then lent to the developing countries  Volcker shocks: Volcker was concerned about rising inflation in U.S. and his solution was increase interest rates, increases cost of borrowing, people will borrow less, inflation will decline  Mexico declares bankruptcy in August 1982; 14 Latin American countries follow suit
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