A Thought Out Plan

Neoliberalism was supposed to make trade and export between nations an easier task to do than what it was.  After the Cold War nobody wanted nationalism and Latin America was then introduced to neoliberalism, where most of the new presidents were neoliberals and even the PRI presidents’ from Mexico who came from a nationalist background tradition had now become neoliberals.  They got the encouragement from the United States, threw away past trappings from nationalists and enforced faith in free trade privatizing state-run corporations and public services which were also created by nationalists. The now neoliberals slashed import tariffs, deregulated capital flows, and reduced or removed subsidies that helped the poor to afford food.

It was these neoliberals that also toned down the debt crisis of Latin America during the 1980’s where countries had a hard time paying off their debts with foreign countries. This was because the world oil prices had driven up to high prices and also because of a lot of short-term borrowing from foreign banks.  Countries were then bankrupt and isolated. To fix this the neoliberal free trade market policies was believed to help out the crisis and was supported by the International Monetary Fund which were the foreign lenders of the money. With the help of the Latin American countries, if they had turned to neoliberalism the International Monetary Fund would renew the external debts of each country into long-term bonds. This was a relief for the bankrupt and isolated countries, which then gave them a way to make payments for their debts. With this, the financial crisis was then over.

With great success in the free trade, United State investors proclaimed Latin America as a great emerging market and offered many opportunities for investment. With neoliberalism policies it encouraged foreign importance and with it came a dramatic boost of money since now US fast food- franchises were created in major cities.  It was then where the North American Free Trade Agreement (NAFTA) was created which involved trade within the United States, Canada, and Mexico.  A year after a new free trade zone was created with Paraguay, Uruguay, Brazil, and Argentina called MERCOSUR.  Neoliberalism was working out just great with reductions in tariff barriers which brought variety in the things imported and low prices.

Unfortunately neoliberals also brought in a new idea of corporations to Latin America. Operations known as Maquiladora or “sweatshops” were assembly plants using cheap labor which in most cases were woman. Most of them would put together pieces of clothing that were sent from other countries, neoliberal governments would hold low wages and only pay them by their work rather than by the hour.

A good example of success through Neoliberalism is Chile, by 1990 Chile had low inflation, good credit, steady growth, and diversified exports.  The growth of the Chilean economy had been so effective it nearly benefited all Chileans. It benefited middle class consumers, but not producers and the poor did not benefit from products. Overall Neoliberalism had promised least to the most in need.

Additional Research:

1.) http://citizenspress.org/editorials/neoliberalism-in-latin-america

2.) http://www.culanth.org/fieldsights/217-teaching-neoliberalism-in-of-latin-america