*The two wealthiest nations in Latin America are Brazil (#9 worldwide) and Mexico (#13 worldwide), both of which had GDPs (adjusted for purchasing power) of over $1 trillion a year.  Argentina is third (#22).

*In terms of GDP per capita, the Bahamas are wealthiest, with a GDP per capita of $18,288 (#40 worldwide), and Barbados, with $16,483 is next (#41 worldwide).  Next are St. Kitts and Nevis (#48), Trinidad and Tobago (#50), and Argentina with $12,468 per person (#52).  Next are Chile (#59:  $10,869 per person), Costa Rica, Mexico, Uruguay, and Brazil (#70:  $8,328 per person).

*Haiti has the lowest GDP per capita in Latin America ($1,556 per person (159)), but it is still wealthier than many African nations.  Honduras ($2,682 per person (#129)) and Bolivia ($2,902 per person (#127).

*Today, about 74% of Latin Americans live in urban areas, but farming is still very important to the economy.

*Historically, Latin America was a colonial region, with colonial economies:  they produced raw materials for export, and imported finished goods from their mother countries.  Even when they ceased to be colonies outright, they retained colonial economies in many ways, which made it hard for them to attain real wealth.

*Historically, South America exported metals (and some rare woods and wood products, such as rubber, and bird droppings from the Atacama Desert), while the Caribbean exported sugar. 

*1879-1884, Chile fought the Pacific War against Peru and Bolivia over part of the Atacama Desert.  The region was valuable for the bird guano, useful for its sodium nitrate and saltpetre, useful in gunpowder and fertiliser.  Part of the problem was that national boundaries had never really been settled when the nations won independence from Spain.  As part of the compromise that drew the boundaries in 1866, Bolivia got most of the territory, but Chilean companies had a 25-year fixed low tax rate.  Bolivia raised taxes against this agreement in 1878, and in 1879, threatened to seize and auction off the assets of a Chilean company that wouldn’t pay.  On 14 February, the day of the auction, the Chilean navy seized the port of Antofagasta, where the auction was to take place.  On 1 March, Bolivia declared war on Chile.  Bolivia thought its chances were good—it had a secret alliance with Peru that it called into play.  Bolivia also hoped Argentina would help, but it did not.  In the end, Chile beat both nations, as it had better and more modern weapons.  Peru and Bolivia both lost land in the war, and Bolivia became landlocked as a result (which they still resent).  Chile got rich at first, but most of its nitrate companies were backed by the British, and in the end, the British supported a coup that overthrew the Chileno government only a few years later.

*Once it became possible to refrigerate it for long distances, food also became increasingly important as a source for exports.  Beef, citrus fruits, bananas, coffee, chocolate, and cocaine are all important Latin American exports today.

*In some cases, the export of one particular crop became some countries’ entire reason for existing.  These were known as banana republics.  In many cases, they were dominated economically and politically by one or another foreign company with extensive economic interests there.

*The original banana republic was Honduras.  In 1910, the United Fruit Company (now Chiquita Banana) complained that its taxes were too high.  When the president of Honduras refused to give the company tax breaks, United Fruit sent some thugs down to throw him out.  The next president gave United Fruit a 25-year waiver from paying any taxes.

*In 1954, the United Fruit Company got the CIA to go into Guatemala when the president threatened to seize any unused land (including some owned by United Fruit) to redistribute to the poor, particularly to Indian peasants.  United Fruit convinced the US government that this was incipient communism, so the CIA helped local rebels overthrew the Guatemalan government.

*At the dawn of the 20th Century, a century after independence, most of Latin America was still dependent on Europe and the USA for imports of many manufactured goods.  In the 1930s and 1940s, Latin America tried to change this (partly in response to the Great Depression and World War II, which badly disrupted the world economy without doing much to directly affect Latin America physically).  Thus, Latin America turned to Import Substitution Industrialization.

*ISI is based on building the kinds of industries that produce the things a country had previously had to import from outside.  It can be promoted through subsidies, through indirect government interference or direct government control of industry, through high tariffs on imports, or through several or all of these.

*In many cases, ISI did require (or at least result in) nationalisation of various industries, often those owned by foreigners—so many US companies, particularly oil companies in Mexico and Venezuela, lost some of their assets.  Later, this happened in Cuba, too, when Castro took over.

*Eventually, however, ISI fell out of favour in much of Latin America.  For one thing, it was too much like the hacienda system applied to the industrial world.  For another, nationalizing the industries made them, in many cases, inefficient.  Governments often mis-spent too much of the money they did make, or else just skimmed it off for their personal bank accounts.  A lack of exports also made it hard for countries to gain money to import the things they did want.

*In the 1980s and 1990s, much of Latin America began to move towards Export-Oriented Industrialisation.  Lowering tariffs, encouraging foreign investment, reversing nationalisation, and simply having cheap labour made it worthwhile for foreign companies to begin building factories there again.  In many cases, countries also devaluated the local currency, making their exports more competitive.

*Now that most Latin American countries no longer practise ISI, they need and want foreign imports.  Furthermore, they are increasingly wealthy enough to afford modern conveniences and luxury goods—they are developing a real middle class (even if it’s still smaller and poorer than that of the USA or much of Europe).

*Nations like this are described as emerging markets, and are particularly important because of the opportunities they afford foreign companies and investors.  This is particularly true because they do not yet suffer from market saturation—most people who want a car, TV, refrigerator, or other manufactured product may still need to buy their first one; foreign companies do not have to compete with existing product lines or wait for existing products to wear out.