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GS101 Week 11, Lecture 1.docx

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Global Studies
Timothy Clark

Global Studies Week 11, Lecture 1 East Asia and Latin America Comparative Perspective What Happened: How to Explain Second Great Divergence  Inequality and underdevelopment o Undeveloped countries that were successful had larger unequal population countries such as Mexico, Colombia, and Brazil  The Importance of Land Reform o Initial land distribution and growth, the countries that were more successful capitalist society from rural— o Autonomous Versus Oligarchic States  Land and State Autonomy—we have states that are not controlled by different segments of society such as in South America o Public Investment and Education  National Versus Elite Priorities o The Role of the United States  The Cold War effect- USA supported land reform in East Asia, due to immediate threat of communism supported more radical in Asia but in Latin America opposed radical movement  An Uncomfortable question: Is sustained and Rapid Economic development compatible with democracy? Why is democracy has not produced, economic development has created democracy The Fall of ISI and the Neoliberal Critique  Why did ISI fail (Import Substitution Industrialization)—policy of meaning you have to enforce production by denying imports o Inefficiencies and limited market  did not have to compete with other markets did not have to improve,  many countries small had satisfied needs for goods and had nowhere else to sale because no international markets o Stagnation and Instability  Producing products that were uncompetitive in international market, then had no one else to sell to after own country  No new wealth was being created  Caused more west wing actions and radical movements o Deficits and Debt  As growth slowed, governments borrowed more money to create new industries and stimulate growth (especially 1970’s)  Money came from OPEC and Volcker Shocks (oil producers), brought more money to oil producing countries. OPEC money gets recycled into developing countries, Paul Volcker—concerned about USA inflation his solution was increase interest rates and therefor borrowing is more expensive  Mexico Declares Bankruptcy in August 1982; Fourteen Latin American Countries follow suit (Domino Theory)  Causes IMF to step in, responsible for debt and bankruptcy in developing world Latin America Net Financial Flows as a Percentage GDP By 1983, 3-4 of Latin America had loan arrangements with IMF Upper Credit Tranche (Strong Conditionality)—Latin America seen as large risk by IMF Washington Consensus (Neoliberalism) 1970-1980s it emerged Fiscal Austerity: (means cutting spending), Latin America must start spen
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