Neoliberalism in Latin America Essay - 2315 Words

Neoliberalism in Latin America From the 1930s until the 1980s state intervention and protection were key components of most Latin American economies. In these years many Latin American countries were used an Import-substitution industrialization based economy trying to reduce dependence on foreign imports and replacing them with domestic production. Due to the use of an Import-substitution industrialization based economy Latin American countries were forced to keep high tariffs to protect the private companies of their countries. This combined with many Latin America countries providing numerous government subsidized programs eventually led to the 1982 debt crisis. This debt crisis created a vacuum affect in Latin America†¦show more content†¦This excrementally helped the upper-class because after they bought this stock at largely discounted prices it quickly grew in value. Clearly, lower classes that did not have extra cash could not benefit from this because they were unable to purchase any of the shares of these newly privatized commodities. This created two problems, not only did real assets of Latin America get lost to upper-class foreign investors, it also created a significantly larger wealth gap between the poor and upper-class because of the large amounts of money the upper-class made from the gains of the stock that they bought at such cheap prices. Another benefit the upper-class of Latin America and other foreign countries gained from neoliberalism was the reduction of tariffs. The reduction of Tariffs allowed foreign companies to come into Latin America and build maquiladoras. This was beneficial for the foreign investors because they could now come into Latin America where working wages were much cheaper and produce their goods at lower prices, which entail created more profit. Lower tariffs were beneficial for Latin American upper-class citizens because as the foreign companies came into Latin America they were able to invest in these companies. The ability to invest in these companies that wouldn’t have come to Latin America with the previousShow MoreRelatedNeo Liberalism1568 Words   |  7 PagesNeoliberalism is the ability to globally trade, prosper and develop fairly and equitably among other countries. Neoliberalism policies allow for countries to import/export goods and services, trade and settle debts amo ng countries. â€Å"Neoliberalism policies stress privatization, export production, direct foreign investment, and few restrictions on imports† (Rowntree, Lewis, Price, Wyckoff, 2008). 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