The conventional wisdom about ISI is that while it might have produced some growth and associated benefits, it could not lead to a takeoff into sustained development. Some heavy industry emerged, it is argued, but this was only because the factories were cocooned under government protection. However, this commonly repeated viewpoint is contradicted by available evidence. Under ISI polices from to , industrial output rose ten times over in Mexico and Brazil, and three times over in Argentina and Chile.
For Latin America from to , industry as a percentage of GDP rose from under 17 percent to over 25 percent.
However, economic growth slowed in much of the world from the late s to the early s due to global factors, especially the oil price shocks and follow-on debt crises. Periodic economic downturns such as these area general feature of the international economy, not just a particular function of ISI. A more sound historical assessment of ISI is that some, not all, of the practices and policies were flawed. Critics have held that ISI policies produced massive debts from an orgy of spending by populists leaders who pandered shamelessly to the unlettered masses.
Flush with funds, OPEC nations chose the safest place to park their earnings: The banks took the petro-dollars and sought to turn them into assets, loaning the money out. Because Latin America looked to be a compelling place to invest, the latest go-go area, an unprecedented cascade of dollars flowed south. Nearly all Latin American states, especially those governed by the military, borrowed heavily in these years, using the money to cover current expenses, forego tax increases, or investing in white elephant projects.
Sometimes the money just disappeared into corrupt hands. The heavy borrowing and unwise spending turned out to be unsustainable. Mexico came near defaulting in , and suddenly Latin America appeared to be a very unwise place to invest. New lending dried up, leaving behind vast sums to be repaid. The s and the early s were a time of extraordinarily high inflation in Latin America, and taming inflation was a central objective, even fixation, of the neoliberal project.
What originally had been driving hyper-inflation was the servicing of the vast foreign debt. Brady Plan of allowed indebted Latin American countries access to the secondary loan market, Latin American nations began to buy back some of their external obligations, steadily lowering their total foreign indebtedness. Paying less in servicing their foreign debts, they borrowed fewer dollars, thereby reducing the existing money supply.
There was less money in circulation chasing the same amount of goods, and this lowered inflation. The years from to brought strong economic growth for Latin America as a whole, with a combined average growth rate recording a healthy 5 percent a year compared to the world average of 3. By China and Japan were purchasing a fifth of Peruvian and a quarter of Chilean exports, with raw materials making up three-quarters of shipments.
Focusing on primary product extraction serves instead to reinforce existing productive structures. Economic growth and economic development are not the same thing. The boom ended in and Latin America fell into a sharp recession until mid, a downturn second in severity only to the Great Depression of the s. This difficult episode, at a time when the Latin American economy was contracting by 3 percent per capital in , was in many ways the result of the stripping away of government regulations, the vital safeguards meant to serve to protect Latin American economies from speculation-driven swings in the international economy.
Had these nations authentically embraced the free market philosophy then things would have gone much better. For the many obviously neoliberal states that failed to grow, defenders of the free market model seized upon any doctrinal apostasy, no matter how minor, in an effort to explain away weak domestic economic performances.
In the alternative, defenders of the free market model argued that nations that failed to grow under the neoliberal regimen did not have the appropriate civil practices or institutions, lacking honest and efficient bureaucracies; respect for the rule of law; protection of private property rights, especially intellectual property rights; contract enforcement; or a sound banking structure. However, it is at least equally valid to argue that these institutions are created by the process economic development, not the foundation of it.
History would seem to so suggest. Latin American economies generally recovered from mid to the present. Economies commonly post good growth numbers coming out of recessions as they make use of under-utilized capacity. The Latin American nations that came through this episode the most quickly were those that employed counter-cyclical Keynesian government spending programs designed to stimulate the economy. Ecuador, for example, greatly expanded its housing assistance and cash transfer programs to poor households.
Accordingly, some conclusions regarding the performance of neoliberalism are warranted.
Neoliberalism achieved poorer GDP growth records than did prior state-led development policies in Latin America. Latin America under neoliberalism did worse in GDP growth than did other developing areas that used the government to guide or assist in the development process. State-led development policies achieved a much stronger record of success in Latin America than did free market policies.
From the Author I was provoked to write this book because of the times we are living in; Jesus described them as great distress and perplexity; though it is a short read; it took me over a year to research and edit all ten chapters; I hope it will awaken America and most of the world, of our perilious times the bible so predicted right down to the useless bailouts. Sachedina notes that the "harsh treatment of apostates in Islamic law was promulgated without making an indispensable distinction between the Koranic doctrine of freedom of religion, which insists that no human agency can negotiate an individual's spiritual destiny, and legitimate concerns about the Muslim public order. Moreover, conversion from Islam to another faith has been illegal and subject to severe punishment virtually from the inception of Islam. However, economic growth slowed in much of the world from the late s to the early s due to global factors, especially the oil price shocks and follow-on debt crises. And, importantly, will it be possible for Muslim countries to liberalize sufficiently to enable truly democratic forms of governance if they do so minus what many consider the fundamental right to freedom of conscience? Liberal Muslim voices of the twentieth century including S. I agree that teaching morality is not the teachers' job, which is the responsibility of the children's parents and church.
Part Two will explore the social costs of the neoliberal project and the factors that led to widespread abandonment of the experiment with free-market economic policies in Latin America. Please accept this article as a free contribution from COHA, but if re-posting, please afford authorial and institutional attribution.
Exclusive rights can be negotiated. For additional news or analysis on Latin America, please go to: A Latin American Perspective. Rhetoric and Reality Since Development and Growth in the Mexican Economy. The Puzzle of Latin American Development. Great things he hath done. Would you like to tell us about a lower price? If you are a seller for this product, would you like to suggest updates through seller support? Learn more about Amazon Prime.
Liberalization and Apostasy of America is a book cut to the chase about our nation, it's humble beginnings, brief history, our faith and roots as a great christian nation and how we have over the last two centuries been blessed of God by giving him the praise and thanks for his bountiful blessings and great heritage he has endowed upon us as a people called by his name: Our land so needs a healing and a mere man cannot bring it about, only God and his Son, Jesus Christ! Read more Read less. From the Author I was provoked to write this book because of the times we are living in; Jesus described them as great distress and perplexity; though it is a short read; it took me over a year to research and edit all ten chapters; I hope it will awaken America and most of the world, of our perilious times the bible so predicted right down to the useless bailouts.
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Clarence writes a short, thought provoking book that is easy to read. I cannot honestly believe in all he does, but that is what America is all about- having the freedom to have and voice one's opinions without fear of intimidation or imprisonment. This is one of the themes Clarence is trying to tell us about- America needs to become the country it once was.
I agree that schools are too lax with discipline and academics. We are teaching them to pass tests, not to learn. I agree that teaching morality is not the teachers' job, which is the responsibility of the children's parents and church. America has been corrupted with politicians who have their own agenda, instead of serving to better our country. The same can be said about most large corporations and banks whose sole purpose is to make as much money as possible even though it harms the average American.
And yet the companies doing this are making even more money and not sharing it with the common citizen. How many cities in the US are still ghost towns when the textile mills and manufacturing left? Large companies don't pay taxes and then blame the tax system that allows them to do so. We need to keep criminals behind bars and not have the revolving door we have today. Clarence stirs our thinking process as to what is happening in America today.
One person found this helpful. Paul Puckett is a wonderful Christian author who has written a strong conservative book.