Latin America\'s struggles

Latin America’s Struggle

Many countries in Latin America provided their resources to industrialized
countries, which is how Latin America was able to earn the money they needed for
development. Latin America relied too much on foreign markets and goods, and the
money that came into the country went to a very small group of landowners and
business people. Therefore, Latin America has suffered from major poverty. Chile
and Nicaragua are two examples of Latin American countries that have suffered
because of economical and political obstacles.

Chile’s economy relies only on one resource for export. Chile produces a
very large part f the world’s copper. Depending on just one material is
unreliable because unexpected events can always occur. This is exactly what
happened to Chile. Suddenly the price of copper dropped. Since Chile relied on
one source, their economy also dropped.

In 1979 the government tried to steady the economy by using 370 million
dollars for hydroelectric, telecommunication, and iron and steel projects. The
government also tried to expand the forestry industry. Fish and forest products
became important exports. Soon prices began to increase, which was a problem.
The government tried to solve this problem by cutting down on public spending
and searched for foreign investments. An overflow of imports resulted from this
solution. This weakened the National manufacturing. By the 1980s, Chile’s
economy was in serious danger. In 1985, Chile owed 202 billion dollars. This was
the largest foreign debt of all the Latin American countries. Chile urgently
needed foreign currency to pay off all the money they owed. To do this, the
government took severe actions to increase Chile’s exports. There was no
simple way out because copper’s price was still too low.

In 1970, Dr. Salvador Allende Gossens became president of Chile. He was the
first Marxist to be chosen to be leader of a country in the western hemisphere.
A Marxist believed in economic and political theories of Karl Marx. Marx’s
ideas outline the idea of modern communism. During Allende’s presidency, the
government took over many of Chile’s industries. Many foreign investors did
not like Allende as president, so they sent their money to other countries
instead. By 1973,the economy weakened terribly. Strikes took place often and
there were many food shortages.

On September 11th, 1973, a military group killed Allende. Chile now became a
military government led by the military dictator, Augusto Pinochet. He reduced
government control of businesses and prices. He also took over companies and
then resold them to private businesses. Taxes on businesses were also cut.
People who disagreed with Pinochet were sent to jail or killed. Concentration
camps were setup, the congress was taken away, and political parties were
prohibited. In spite of this, Pinochet’s economic strategies did help.
Inflation fell and the living standards got better. In 1990, a new president was
elected after Pinochet asked the people if they still wanted him to rule for
another eight years.

Nicaragua is one of the seven countries in Central America. The majority of
the people who live there are extremely poor. From 1950 to 1977,the typical
yearly economic growth was at a reasonable rate, but from 1982 till 1990 the
Grosse National Product (GNP) fell an average of 2.4 percent a year. Economic
problems were caused mainly because of the guerilla wars, U.S. trade
prohibition, floods, and droughts. When Camorro became president in 1990,she
began a new currency. The Cordoba ora first equaled the U.S. dollar, but in May
of 1993,the exchange rate was five Cordobas to a dollar.

Nicaragua’s economy is based on agriculture. Most of the country’s income
is form exported farm products. Cotton and coffee are the two most important
crops. Other exports are sugarcane, bananas and rice.

In February 1992, the unemployment was at 40 percent. It went up to 40
percent in august of the same year. The amount of money earned by workers was
not enough to raise a family.

>From 1850 to 1936, dictators have controlled Nicaragua. A rebel leader
named Augusto Cesar Sandino strongly disagreed when the U.S. interfered. He led
guerilla raids against the Nicaraguan government. The Guardia leader Anastasio
Somoza killed Sandino in 1934. In 1936 Somoza was elected president. Even though
he was elected, he was a dictator with complete power. He was corrupt; but he
did support social changes, like women’s suffrage and better education. For 43
years the Somozas ruled Nicaragua. All of them were dictators and kept political
and economic power.

In the 1960s, a Marxist group called the Sandnistas started guerilla attacks
against Anastasio Somoza Debayle. Cuba, Costa Rica, Honduras and Mexico helped
the Sandnistas start a war against Somoza and the National Guard. In