1. Latin America Economic and Geopolitical Climate GCU 122 – World Regional Geography Jason Donoghue Chandler-Gilbert Community College

2. Economic and Geopolitical Climate Latin America Agricultural Industry –Vegetation and Soils –Agricultural Zones –Agricultural Methods Mineral Deposits Occupational Structure –Standards of Education –Standard of Living Industry –Types, Locations, and Problems Governmental Systems –Geopolitical Climate –U.S. Involvement Current Events –Core Issue Paper

3. A Harsh Environment Large diversity and prevalence of pests and diseases weaken and kill plants, animals and humans in the tropics. –Latin American populations would have to use technology and social organization to adapt the harsh environments to their needs. Even though these conditions exist some areas are much more productive than others. –Flatter river valleys, with annual renewal of soils by sediment deposition and easy access to water. –Regions where ash from volcanic activity provides nutrients to the soil.

5. Agricultural Zones Wide belt of commercial agriculture not unlike the mid- west in the U.S. stretches through the Argentine pampas. Surrounding major urban centers in Argentina, Brazil and Uruguay are zones of mixed farming, including production of vegetables and specialty goods. Irrigated agriculture is practiced along the arid coastal plain of Peru and northern Chile, as well as on the other side of the Andes in the pampas.

6. Altitudinal Zonation Tierra Caliente –“hot lands” – Bananas, sugar caner, cacao and pineapples. Tierra Templada –“temperate lands” – corn, beans, squash, green vegetables, wheat and coffee. Tierra Fria –“cool lands” – wheat, fruit trees, root vegetables, cabbage, broccoli. Tierra Helada –“frozen lands” – some grains, root vegetables.

7. Agricultural Methods Slash and Burn –Used to clear the rain forest to create fields for farming and grazing. –At times destructive farming practices are used, causing the soil to become exhausted of minerals. Terraced Farming –Technique for growing crops on hillsides or mountain slopes. –Particularly effective in the highland regions. –Protects from soil erosion.

8. Hacienda –Spanish Institution –Not efficient, but promoted social prestige –Workers lived on the land Plantation –Northern European origins –Export oriented monocrops –Imported capital and skills –Seasonal labor –Efficiency is key Hacienda vs. Plantation

9. PLANTATION PRODUCTION FOR EXPORTPRODUCTION FOR EXPORT SINGLE CASH CROPSINGLE CASH CROP SEASONAL EMPLOYMENTSEASONAL EMPLOYMENT PROFIT MOTIVE $$$PROFIT MOTIVE $$$ MARKET VULNERABILITYMARKET VULNERABILITY Agricultural Institutions

10. PLANTATIONHACIENDA PRODUCTION FOR EXPORTPRODUCTION FOR EXPORT SINGLE CASH CROPSINGLE CASH CROP SEASONAL EMPLOYMENTSEASONAL EMPLOYMENT PROFIT MOTIVE $$$PROFIT MOTIVE $$$ MARKET VULNERABILITYMARKET VULNERABILITY DOMESTIC MARKETDOMESTIC MARKET DIVERSIFIED CROPSDIVERSIFIED CROPS YEAR ROUND JOBSYEAR ROUND JOBS SMALL PLOT OF LANDSMALL PLOT OF LAND SELF-SUFFICIENTSELF-SUFFICIENT Agricultural Institutions

11. PLANTATIONHACIENDA PRODUCTION FOR EXPORTPRODUCTION FOR EXPORT SINGLE CASH CROPSINGLE CASH CROP SEASONAL EMPLOYMENTSEASONAL EMPLOYMENT PROFIT MOTIVE $$$PROFIT MOTIVE $$$ MARKET VULNERABILITYMARKET VULNERABILITY EJIDO DOMESTIC MARKETDOMESTIC MARKET DIVERSIFIED CROPSDIVERSIFIED CROPS YEAR ROUND JOBSYEAR ROUND JOBS SMALL PLOT OF LANDSMALL PLOT OF LAND SELF-SUFFICIENTSELF-SUFFICIENT SMALL SURPLUSESSMALL SURPLUSES LAND “OWNERSHIP”LAND “OWNERSHIP” COMMUNAL VILLAGECOMMUNAL VILLAGE COLLECTIVECOLLECTIVE Agricultural Institutions

12. Location of Natural Resources Gold, silver, iron, copper, bauxite, tin, lead and nickel. –All minerals that are found in abundance in Latin America. In addition mines throughout the region produce precious gems, titanium, silver and tungsten Oil, coal, natural gas and uranium are all plentiful in Latin America –Venezuela and Mexico both have large reserves of oil.

13. Natural Resources - Mexico Mexico - A major oil producer - About 3.5 million barrels per day. Saudi Arabia produces about 9 mil bpd.

14. Potosi Silver Mine - Bolivia Still in use today, and producing tin and silver. Was once the most productive silver mine in the world. Average life expectancy for workers is 40 years old. –Estimates state that nearly 8 million indigenous workers lost their lives working the mines.

15. Educational Standards

16. Classroom in Mexico

17. Economy of Latin America Cities are centers for manufacturing (secondary), services (tertiary) Most are coastal in location

18. Tourism

19. Orientation to Water Influences Economy

20. Panama Canal – Huge Impact on Trade

21. Standards of Living Estimates show that nearly 1/3 of children living in Latin America are economically active because most families need their income. U.N. reports nearly 15,000 homeless children are on the streets in Mexico alone. Rural-Urban migration is common among young adults in Latin America.

22. World Wide Income Levels

24. Poverty Home to the poorest countries of the Americas: –Honduras –Nicaragua

25. El Salvador –Agriculture accounts for 24% of GDP and 40% of the labor force and contributes to 60% of exports. –Economic losses because of guerrilla sabotage total $2 billion since 1979. Honduras –Agriculture accounts for more than 25% of GDP, employs 62% of the labor force, and produces two-thirds of exports. –Economic loss because of natural disaster Primary Sector Dependence

26. HIPC Honduras and Nicaragua are on the HIPC list –Heavily indebted poor countries –The Initiative is designed to reduce debts to sustainable levels for poor countries that pursue economic and social policy reforms, –Used specifically in cases where traditional debt relief mechanisms will not be enough to help countries exit from the rescheduling process.

27. The Weight of Debt Nicaragua's external debt currently stands at 6.7 billion dollars. - 25% of the Nicaraguan budget is spent on debt payments –Contrast to … 14% on health care –11% on education Almost half the population falling below the poverty line. High levels of infant mortality and maternal mortality, and a high level of infectious and parasitic diseases. Malnutrition is widespread with around 20 per cent of children under five being chronically malnourished or stunted

28. Mercosur –Launched in 1995 –A Southern cone common market –Includes Brazil, Argentina, Uruguay, and Paraguay Andean Community –Initially formed in 1969 (Andean Pact) –Restarted in1995 –Members are Venezuela, Colombia, Peru, Ecuador, and Bolivia Economic Integration

29. Group of Three (G-3) –Formed in 1995 –Includes Mexico, Venezuela, and Colombia –A free trade association which aimed to phase out all tariffs by 2005 NAFTA –Launched by the U.S., Mexico and Canada in 1995. –Seeking to expand into South American to include Chile. Economic Integration

30. Tijuana Nogales Ciudad Juarez Matamoros Reynosa Monterrey Chihuahua Maquiladoras

31. GDP per Capita Along the US/Mexico Border

32. Initiated in the 1960s as coupon houses Assembly plants that pioneered the migration of industries in the 1970s Today –>4,000 maquiladoras –>1.2 million employees Maquiladoras

33. Modern industrial plants Assemble imported, duty-free components/raw materials Export the finished products Mostly foreign-owned (U.S., Japan) 80% of goods reexported to U.S. Tariffs limited to value added during assembly Maquiladoras

34. Maquiladora products Electronic equipment Electric appliances Auto parts Clothing Furniture Maquiladoras

35. Advantages –Mexico gains jobs. –Foreign owners benefit from cheaper labor costs. Effects –Regional development –Development of an international growth corridor between Monterrey and Dallas - Fort Worth Maquiladoras

36. NAFTA Effective 1 January 1994 Established a trade agreement between Mexico, Canada and the US, which: –Reduced and regulated trade tariffs, barriers, and quotas between members –Standardized finance & service exchanges

37. How has Mexico benefited from NAFTA? NAFTA

38. Foremost, it promises a higher standard of living. NAFTA creates more jobs for Mexicans as US companies begin to invest more heavily in the Mexican market. Mexican exporters increase their sales to the US and Canada. Is that the entire story? Mexico and NAFTA

39. Canada remains as the United States’ largest export market. Since 1977, Mexico has moved into second place (displacing Japan). 85% of all Mexican exports now go to the United States. 75% of Mexico’s imports originate in the United States. What does that mean? U.S. Trade With Canada and Mexico

41. Geopolitical Climate Most countries in the region save for Cuba, have some sort of multiparty or democratically elected government. –Mexico – Institutional Revolutionary Party (PRI) ruled the country for 71 years, and was unseated by a coalition led by Vincente Fox. –Venezuela – Hugo Chavez – elected by popular election – fundamentalist views could be a sign of changes in store for Latin America.

42. Internal Wars Nicaragua –Sandinistas v. Contras Panama –Remember Manuel Noriega? Honduras –Drawn into conflicts in Nicaragua and El Salvador El Salvador –12-year civil war ends in 1992 Guatemala –A peace agreement in 1996 ends a 36-year civil war Costa Rica? –The only stable country –Best standards of living in the region Intel comes to town …

43. A History of American Involvement 1981 – U.S. funds contras to fight Sandinista gov’t 1983 – U.S. Marines in Grenada to overthrow gov’t allied with Cuba 1989 – U.S. paratroopers enter Panama to overthrow gov’t and arrest Manuel Noriega

44. Corruption Virtually every country in the region has had some form of political corruption in recent years. –High level government officials moving money to banks outside their nations, which has robbed many Latin American countries of much needed investment capital. International Drug Trade –Major factor contributing to corruption, violence, and subversion of the democratic process in Latin America.

45. Core Issue – Case Study Due next week (2/5) – 3 page case study on one of the core current issues that is facing any country or region in Latin America. Examples: –Deforestation of Amazon –Pollution in Urban Centers – Mexico City –Mitigation of the Effects of El Nino