Latin America’s Wild Economic History, Explained | The Wealth of Nations

Latin America’s Wild Economic History, Explained | The Wealth of Nations

We start in 1875 by this time nearly
every country in Latin America has declared independence from Portugal and
Spain. at this point Argentina and Uruguay
fueled by a growing export industry lead Latin America’s economic development
workers in these two countries are only 25% less wealthy than their American
counterparts Mexico opens its doors to foreign
investment for the first time in decades money pours in from the UK France and
the US by the turn of the century foreign investment in Mexico rivals
investment in the United States this creates massive but unequal growth from 1895 to 1897 Argentina is the
wealthiest country in the world per capita in 1901 Cuba created a constitution and
finally found independence however they were forced to cede massive powers to
the United States and in 1903 Panama backed, funded and
protected by the United States declares its independence from Colombia.
It also seats massive powers to the US including control of the Panama Canal for the past 100 years Latin America’s
economy expanded based on its exports to Europe. When the world entered the first
world war in 1914 Europe began demanding fewer exports and economies of Latin
America began to suffer. Many countries respond by nationalizing foreign owned
industries and social reform. Ironically around this time Central
America begins to transition their legal system to allow for greater ownership of
private property. In 1929 the world was struck by the
Great Depression global exports crashed having a catastrophic effect on the
region Chile, Peru and Bolivia are on record as being the hardest hit
economies in the entire world in 1929 Argentina left the gold standard
and devalued their currency giving them a competitive edge in global markets as
a result their experience was mild in comparison to the rest of the world.
Starting in the 1930s Latin America begins to believe that they have become
too dependent on foreign trade they start placing high tariffs on foreign
goods subsidizing and even nationalizing industries the hope was that over time
they would build up their own industries, by replacing foreign products with
locally produced goods 1943 would be a landmark year for
nationalist movements in the region Venezuela would take hits first step
toward nationalization of the oil industry 50%, of all profits from oil
would go directly to the government. This was followed by a series of laws to
increase the discovery of new oil fields meanwhile Argentina would have its
second coup which would bring Juan Peron to power.
Peron would enact sweeping reforms including price controls nationalization
of major industries and would eventually close off Argentina from nearly all
imports of foreign goods by 1950 Argentina once called the United
States of South America had a GDP per capita of just half of the country it
was once compared to. And in 1952 Puerto Rico becomes a Commonwealth giving it
stronger ties to the u.s. starting in 1955 Argentina would stage a coup
against Juan Peron this would be the first of a number of undemocratic
changes in leadership that would take place over the next 30 years each leader
would have their own convoluted idea of how to run the economy in 1959 Fidel
Castro would lead a communist revolution and assume control in Cuba they would
allow themselves with the USSR who had sent aid and buy sugar from the
Caribbean island that up to 11 times the global prize in 1960 Venezuela joins
OPEC as a founding member tax laws incentivize American businesses to
manufacture goods in Puerto Rico the Commonwealth begins producing textiles
and eventually graduates to biotechnology and petrochemical products starting in 1973 oil prices begin to
skyrocket and in 1976 Venezuela fully nationalizes their oil industry since
the 1930s industrialization programs for many Latin American countries were still
planned and funded by the state the debt piled up and when the price of oil
collapsed in 1980, so did the debt market and in 1982
Mexico declared it could no longer pay its debts. The debt crises would spread
through nearly every country in the region. The economic damage was so
catastrophic that the 1980’s would henceforth be known as Latin America’s
“lost decade”. The International Monetary Fund was forced to intervene with mixed
results. They convinced governments to practice fiscal discipline, privatize
industries and open up trade and in the 1990s growth returned to the area. In
1991 the Soviet Union fell and Cuba lost its most important economic ally In the early nineties Chile returned to
democracy and struck a balance they created an economy marked by free
trade and fiscal discipline but that also included increased social spending
in 1997 after privatizing industries Panama joined the World Trade
Organization and in 1999 they regained control of the Panama Canal in 2003 the u.s. invaded Iraq making oil
prices and Venezuela’s economy saw once again in 2008 the global financial crisis
strikes and sends the price of oil into a tailspin.
At this point Venezuela is almost totally dependent on oil as it
represents 95 percent of the nation’s total exports and the country with the
largest proven oil reserves in the world takes an economic nosedive this brings us to present day. Puerto Rico
is a semi-autonomous Commonwealth of the United States it is currently in an
economic recession but is still the wealthiest territory in the Latin world
it is the third largest producer of biotechnology on the planet and
manufacturers 16 of the 20 best selling drugs in the United States Argentina
once the wealthiest country in the world per capita fell into a monetary crisis
in 2018 yet again inflation reached as high as 45 percent and interest rates
have been hiked as high as 60 percent the country is being bailed out and
restructured by the IMF once more the nobel-winning economists Simon’s cooze
net famously said that there are four types of countries developed undeveloped
Japan and Argentina. Panama has the largest number of registered cargo vessels in the world. 22% of all cargo by weight is transported by Panamanian
ships. The Panama Canal represents 40% of its entire GDP despite its wealth it is
exceptionally high but declining
inequality. By 2019 Venezuela has fallen
further into economic turmoil in 2014 inflation hit 69 percent and by 2019 it
rose to 2 million percent over 500 companies are owned by the state.
Citizens have seen shortages of price controlled products including milk meat
rice oil and butter forcing many Venezuelans to eat wild fruit and even
garbage the country has ranked number one on Bloomberg’s misery index for the
past 5 consecutive years Lastly Chile, the most economically free
and stable country in South America its economy is both diverse and wealthy
industries contributing substantial amounts to its GDP include mining
fisheries tourism finance manufacturing and more it has signed a vast network of
free trade agreements with countries from around the world from Colombia to
China to the United States and it’s politicians continue running on a
platform of furthering this trend lastly I thought it might be useful to see how
Latin America compares to the rest of the world while relatively wealthy the
average Panamanian and chilling resident produces less than half of their
American counterparts China and South Africa are the largest economies in
their respective continents but produce less per capita than most of Latin
America and despite the humanitarian crisis in Central America and Venezuela
every country in the region has greater output the capita than Haiti if you would like to take a deeper dive
and get an even better understanding of Latin America’s economic history or of
any other country visit we have more
videos and even an interactive visualization so you review any set of
countries over any time period you like and lastly subscribe to my Youtube
channel if you would like to see more videos

9 thoughts on “Latin America’s Wild Economic History, Explained | The Wealth of Nations

  1. Great video. I have liked and watched all your videos. Maybe you would be interested in checking out Micahistory 2

  2. i dont know why people get this so wrong. Panama canal does not represent 40% of the gdp. it barely represents 4% of the gdp. around 2-3 billion dollars in a 70billion nominal gdp economy.

  3. Great video, I like the way you explain what is going on over time. It helped me to have a better understanding of things I learned in history classes.

  4. Brazil did not have a bad century. Not great, but probably one of the best for Latin America. Chile didn't do poorly (Argentina and Uruguay did poorly because they were outstandingly rich in the begining of the century for countries dependent on commodity export) but it's not richer now in relation to the rich countries than it was in the begining of the century, like Brazil.

  5. Why so much POVERTY well your answer is Neo liberalism has brought all of it combined with the ascension in power for the Oligarchy you know the rich class there it is

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