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The American semiperiphery: Latin America dr. Jeney László Senior lecturer [email protected] Economic Geography I. International Business bachelor study programme (BA) Spring term 2015/2016. CUB Centre of Economic Geography and Futures Studies Similarities and differences between the Semi-Peripheries similarity Geographical extent Ancient times Contemporary near centre language Religion Key industries Difference Latin America Islamic World long shaped N–S (Rio Grande– W–E (Atlantic Patagonia) Ocean–Central Asia) Developed Red Indian Egypt, centres Empires: Inca, Mesopotamia, Maya–Toltec, Persia, Rome Aztec Very closely tied centre: N Am centre: Eu homogeneous Spanish, Portuguese homogeneous Catholics Dominant product Agricultural Arab, Turkish and Iranian Muslims 2 Oil, natural gas Division of America from the viewpoint of Regional Geography North America (English America) Latin America Middle America South America Mexico Central America The Caribbean Northern Andes Brazil Southern South Am. Inner dividing borderlines: – Human Geography: State border between USA and Mexico (border of North and Latin America) – Physical Geography: Isthmus of Tehuantepec (216 km) (border of North and Central 3 America) Long-term economic history 3 stages: – Pre-Columbian period – Colonization (15th–19th century) – Independent states Early 19th century: political independence – But 1823: Monroe Doctrine increasing geopolitical role of USA in the Western Hemisphere Late 19th century: USA intervention in the affairs of Cuba, Haiti, Dominican Republic 1990s: – NAFTA: strengthening connection with USA – Not unidirectional: growing Latin-based segment of 4 the US immigrants popular culture ( restaurants, music) Poverty Continuously one of the region's main challenges Increasing poverty and reduced impact of economic development on poverty reduction undermines: – Region's economic potential – Well-being of its population 40 million street children – Often forced to seek work on the street – Their families can no longer afford to support them 40 million street children 5 Most unequal region in the world High inequality: deep historical roots – Since colonial times: rooted in exclusionary institutions – Survived different political and economic regimes – Political systems: allow a differentiated access for the social groups on the influence in the decision making process – It responds in different ways to the least favoured groups that have less political representation and capacity of pressure – Reproduction and transmission through generations Today: – Goldman Sachs' BRIC review: by 2050: two Latin American among the largest economies in the world: China, US, India, Brazil and Mexico – Poorest countries: Haiti, Nicaragua, Bolivia and Honduras 6 Recent economic liberalization Recent economic liberalization – Not everyone is equally capable of taking advantage of its benefits – Differences in opportunities: based on race, ethnicity, rurality and gender – Those differences have a strong impact on the distribution of income, capital and political standing. Share of the extreme groups of the income – Richest 10% of the population of Latin America earn 48% of the total income (developed countries: 29%) – Poorest 10% of the population earn only 1.6% of the income (developed countries: 2.5%) Highest and lowest inequalities in the region (as measured with the Gini index) – Highest : Haiti (59.5), Colombia (58.5), Bolivia (58.2), Honduras 7 (55.3), Brazil (55.0), and Panama (54.9) – Lowest: Venezuela (43.4), Uruguay (46.4) and Costa Rica (47.2) Social assistance programs Provide money to poor families Used as an investment on their children's human capital (e.g. regular school attendance and basic preventive health care) Purpose: 1. Address the inter-generational transmission of poverty 2. Foster social inclusion by explicitly targeting the poor – Focusing on children – Delivering transfers to women – Changing social accountability relationships between beneficiaries, service providers and governments Increased school enrolment and attendance and improvements in children's health conditions Around 110 million benefited people Relatively cheap, costing around 0.5% of their GDP 8 Major trade blocs (or agreements) Mercosur/Mercosul: Arg., Braz., Para., Uru. founding members Andean Community of Nations (CAN): Andes Union of South American Nations: composed of the integrated Mercosur and (CAN) G3 Free Trade Agreement Central America Free Trade Agreement (CAFTA): agreement with Dominican Republic too (DR–CAFTA) Caribbean Community (CARICOM) But: major reconfigurations: along opposing approaches to integration and trade – Venezuela officially withdrawn from both the CAN and G3 and it is formally admitted into the Mercosur (pending ratification from the Paraguayan legislature) 9 – President-elect of Ecuador has manifested his intentions of following the same path Free Trade Agreement (FTA) with the USA This bloc nominally opposes any FTA with the USA Uruguay: manifested its intention otherwise Chile – Already signed an FTA with Canada – Along with Peru, Colombia and Mexico are the only 4 Latin American nations that have an FTA with the USA the latter being a member of the North American Free Trade Agreement (NAFTA) 10 Major tourist attractions: popular places for international visitors Native American cultural heritage: – Well preserved ruins of Mayan city-states (Cancún) – Machu Picchu, Chichen Itza, Cartagena de Indias and Cuzco Natural heritage: – Galápagos Islands, Salar de Uyuni, Iguazu Falls, Poás Volcano National Park and Patagonia Coastal resorts: – Pacific: Cabo San Lucas, Mazatlán and Acapulco – Atlantic: Copacabana – Caribbean: Yucatán Peninsula, Santo Domingo and Varadero Cities: – Rio de Janeiro, São Paulo, Mexico City, Quito, Bogotá, Buenos Aires, Lima, Havana 11 Mexico receives the largest number of international tourists Income from tourism: key to the economy of several Latin American countries 2008: over 22 mn visitors (1990: 17 mn) – Millions more than anywhere else in Latin America – Mexican, Latin and North American, European and Asian visitors – Cities: Gang violence + N Mex: drug trafficking-related crime not slowed the influx of international tourism Major and growing source of income Regional leader in developing a tourism industry 12 – Separate ministry of tourism with dedicated funds Question of tropical rain forests (TRFs) Conserve TRFs Use TRFs’ resources Sink for carbon dioxide (burning Incomplete data for CO2 data vegetation add CO2), source of (unreported surfaces). Ocean O2 (where humans live) exchanges more significant Tremendous biodiversity in the plant No evidence: partial TRF clearing life in TRF ecosystems changes the biodiversity of the Earth Medical treatments and cures from Treatments and cures from many TRF products sources + synthetically generated in laboratories Right to destroy domestic resources Right to use their natural resources (but corrupt governments, wasting for their own best interest. Wealthier other resources) countries did the same 13 Question of tropical rain forests Use TRFs’ resources Need to push the frontiers. „Productive” members of society have the right to use the land Increasing tourism revenue potential Right to determine how they earn revenue from their resources Natural habitat for species found Good source of income in a debt only in this biome. Removing of TRF challenged country is more eliminate habitat and permanent important than the conservation of a loss of species alter ecological bird or a tree balance Conserve TRFs Indigenous tribes local tribes: displaced bloody conflicts 14 Mexico By far the most economically developed of the countries of Middle America – More than 85 % of Middle America total GNI – GNI per capita: one of the highest in Latin America and World Bank upper-middle-income group Diversified economy, significatnt sectors: – – – – Commercial farming Manufacturing (maquila) Tourism and related services Oil and gas industries 15