Neoliberalism was the newest movement that took over after the Cold War ended, seeing as it had left Nationalism completely discredited. Liberals saw their opposition was severely weak and they took their chance. They knew they wouldn’t be able to use the same techniques that they had before. Between the several conflicting economic ideas that had constantly fought for power throughout Latin America, such as Nationalists and Liberalists, they had tried nearly every idea in the book, two and even three times in some cases.
Neoliberalists had a few new ideas up their sleeves, however. They wanted to embrace an entirely new type of free market by completely redoing the current setup. Their ideas were to sell off state-run corporations, slash tariff taxes from imports and exports, deregulate capital flows and hold a total assault against inflation. The 1980 debt crisis, after heavy short-term borrowing in the 1970s, left the country needing to money now and the people willing to let Neoliberalists have a turn.
Not only did citizens support this new form of Liberalism, but also the PRI Presidents of Mexico saw it as very beneficial. When Foreign Lenders heard about the Neoliberalists they instantly encouraged it as well. The IMF stepped in and told Latin America that if they could reform to Neoliberalism that they would be able to roll their debts into bonds to help them out. They were extremely successful in extinguishing the debts, seeing as hyperinflation halted entirely in Brazil and Argentina. Latin America, as a whole, was now seen as an emerging market for investment which brought in billions of foreign capital flow.
With the start of a free market, Latin America saw a lot of success and wanted to create even more prosperity. Mexico signed for NAFTA with the United States and Canada in 1994, which reduced tariff costs between them. Soon after, Brazil, Paraguay, Uruguay and Argentina all signed for the MERCOSUR which reduced their export and import tariffs. Chile was very successful through the 1990s, with low inflation, good credit, steady growth and diversified exports. It seemed to benefit all of the classes, however, Neoliberalism was not all universally beneficial as everyone seemed to think.
With free trade Latin American countries could get fairly cheap goods from around the globe, however, that meant that they weren’t buying their goods locally. Once people could buy cheaper things from other countries the Latin American factories started to face hardships, and many lower class people took the blunt of the damage when the middle and upper classes still were able to be profitable. With the collapse of the local industries unemployment skyrocketed and the bureaucracy was dismantled. When the state stopped providing water and electricity to the people it was not profitable for private operators to fund, so they chose not to leaving many people without water or power. Once people realized the instability of Neoliberalism, some began to fight back.
The most famous resistance group was the Zapatistas. They were mainly composed of Mayans from South Mexico who initially rebelled against NAFTA. This group was completely different than any resistance that has ever formed before, thanks to their media savviness. They used Youtube to spread the word of their cause and to voice their demands, most related to land rights. The government didn’t want to send in their actual army, so they armed a militia that was against the Zapatistas and sent them off to their remote location centered around farms and jungles, basically on a suicide mission.
Even though Neoliberalism started off as a great idea and was even able to pull Latin America out of their financial slump, in the end it still wasn’t the perfect fit for them. They still found someone who would resist the change they tried to instill upon themselves, leaving them broken and a step behind the rest of the world.
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