HONOURS MODERN
HISTORY
The Development of Latin America
*In
the early 1800s, the Hispanic America fought for its
independence. Most of these new nations began as democratic
countries, loosely modelled on the United States, which was seen as an
example of how to win independence from a great European empire, and on
the Code Napoleon, which was also widely admired.
*However, the late 19th and the 20th century would see repeated
American intervention all around Central and South America; after all,
the Monroe Doctrine told Europe to stay out of the Western Hemisphere,
and that meant it was America’s job to take care of it (and privilege
to exploit it).
*Central America has always been interesting because it looked like a
good short cut to sailors. Before the 20th century, people
seeking to sail from the Atlantic to the Pacific oceans had to sail all
the way around South America’s Cape Horn, either through the Straits of
Magellan or around Drake’s Passage.
*People considered digging a canal through either Nicaragua or
Panama—if they had used Nicaragua, they would have dug a canal to Lake
Nicaragua (the largest lake in Central America), then another one away
from it. Instead, it was dug through the Isthmus of Panama.
Work began in 1882, and was not completed until 1914, although most of
the work was done in the last 10-11 years of that period by Americans
(after helping Panama win its independence from Columbia). To
finish the Canal, Walter Reed and William Gorgas of the US Army medical
corps found a cure for Yellow Fever, which had killed 20,000 French
workers and many locals.
*The United States controlled the Canal Zone until 1999, when it was
given back to Panama (in part because US ships wouldn’t fit through
it. Today people are again considering building canals through
Nicaragua, Mexico, or Columbia.
*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.
*In fact, wealth was even harder to promote because some places were
barely even colonial in the economies—the haciendas were largely
self-sufficient farms and ranches that did not even attempt to export
much; they just grew enough to support themselves and buy a few
luxuries.
*Land reform has been an attempt to change the problem of hacienda
economies, and it has created more consumers and let more people become
independent economic agents. So has the rise of industrialisation.
*Traditionally, 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. 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, Cuyamel
Fruit, one of the companies that would later merge with 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, Cuyamel Fruit sent some thugs down to throw him out.
The next president gave Cuyamel Fruit a 25-year waiver from paying any
taxes.
*In 1928, striking banana workers in Columbia (where the United Fruit
Company had a lot of land an influence over the government) went on
strike in order to demand better working conditions (such as medical
treatments, decent toilet facilities, and payment in cash rather than
company scrip). After Sunday Mass a crowd of about 6,000 striking
workers with their wives and children were waiting to hear a speech by
the local governor when they fired upon by the Columbian
military. The U.S. Ambassador to Columbia later reported that
about 1,000 people were killed.
*Soon the Columbian government was overthrown, United Fruit was forced
out, and subsequent Columbian governments were neither able to maintain
order or rebuild the post-banana economy, so many Columbians turned to
the drug trade, and the government has alternated between right-wing
military dictatorships, communist governments, and weak
democracies. Much of the country is controlled by paramilitary
groups.
*The most famous of these is FARC (Revolutionary Armed Forces of
Colombia – People's Army), which is a Marxist group supporting land
reform a socialist government. Murder, kidnapping, and terror are
commonplace throughout the country.
*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.
*In some cases, United Fruit was good for the countries it ran:
it built schools to educate potential workers, and railroads to
transport its products. On the other hand, it sometimes
discouraged the construction of roads, because these would cut into its
railroad monopoly.
*Even today, Chiquita Banana and Dole Foods are very important in the economies and politics of Central America.
*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.
*It was most successful in countries that were already fairly large and
prosperous, and that had a lot of materials and workers to draw
from. Argentina, Brazil, Mexico, and to a lesser extent Chile and
Uruguay were fairly successful with this, while Ecuador, Honduras, the
Dominican Republic, and other (mostly smaller) countries were
not. It usually worked best in nations that were relatively
democratic and relatively free of corruption.
*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.
*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.
*To encourage exports, many South American nations have entered into
free trade agreements. Furthermore, in 2008, the Union of South
American Nations was create to promote development, free trade, and
perhaps eventual political centralisation much like that seen in the
European Union.
*This is important because Latin America has seen its share of
dictators, caudillos, and junta over the years. Juan Peron (and
his wife Eva) ruled Argentina between 1943 and 1955 (and briefly again
in 1973-74) with a semi-fascist (but also semi-socialist)
regime. General Augusto Pinochet ruled Chile from
1973-1990 through the military and the national police. Latin
America has also sufered a few small wars in the Twentieth Century.
*The Cuban Revolution of 1959 made the Caribbean a much more dangerous
place, particularly during the Cuban Missile Crisis. It also
raised fears that Communism might spread to Latin America.
*1969 saw the Football War (or Soccer War) between El Salvador and
Honduras. As late as 1969, El Salvador still had a few large
landowners and many small ones, and many poor Salvadorans had migrated
to Honduras. However, by this point, Honduras wanted to
redistribute the land to Honduran peasants, and kicked the Salvadorans
off the land. Both nations were angry, and then, in 1969, a
soccer game went bad. In the run-up to the 1970 World Cup, El
Salvador beat Honduras in overtime (in the tie-breaking game of a
best-of-three set). Riots immediately broke out. The
Hondurans accused the referees of cheating. Within a few hours,
there were armed skirmishes along the border between the two nations,
and on 14 July 1969, El Salvador invaded Honduras. It only stayed
six days, but about 2,000 people were killed, and an official peace
treaty was not drawn up until 1980 (and the boundary is still not
entirely determined).
*Argentina invaded the Falkland Islands in 1982, but was beaten by the
British (which led to the fall of Argentina's military junta).
*Since then, there have been few wars between countries, but several
countries, particularly Columbia and Peru have had to fight to keep
down Communist paramilitary groups.
*One of the pressing concerns throughout Latin America has been land
reform—breaking up the big haciendas and giving or selling the land to
the people who actually live on them. Mexico officially broke up
the haciendas in 1917. Columbia has been experimenting with it
since 1936, but a lot of land has ended up being seized by (or at least
abandoned because of) drug lords and their paramilitaries. Land
reform was part of Castro’s platform during the Cuban Revolution in
1959. Chile saw some land reform between 1960 and 1973 when
Pinochet took over.
*Today, Hugo Chavez, Venezuela’s new caudillo, claims he will
distribute unused lands to the small farmers of the nation.
Brazil also strongly recognises squatters’ rights, the right of people
to claim land that they have settled and improved, regardless of who
officially owns it (although this sometimes means squatters kill
Indians to get their land, or cut down rainforest to show they are
cultivating land, and sometimes the original owners kill the squatters
before they can finish making their claim).
*The 1990s have seen a reversal in Latin American politics: many
nations have gotten rid of their military dictatorships and other
caudillos, and have again managed to maintain democratic
governments. However, these exist in countries unused to
democracy, and it is easy for the military to influence politics, and
even where that is not the case, elected officials are often unused to
exerting real power. In most countries they also have to deal
with staggering corruption, with labour unions and heavily socialised
economies (in which streamlining any major industry often means firing
many registered voters), and with poverty and crime. Many
countries, particularly Peru and Columbia, have to deal with
paramilitary forces that want to overthrow the government, or at least
run large sections of country themselves.
*One example of the changes in Latin America came in Mexico in
2000. In that year, for the first time in 71 years, the PRI
(Institutional Revolutionary Party, which seized power during the
Mexican Revolution of 1910-1928 and never let go) lost a presidential
election (to Vincente Fox, of the National Action Party). Not all
Mexicans are happy with Fox, but for the first time, the PRI does not
run the government, although it is still strong, and has been forced to
reform and streamline itself. In 2006, PRI was again defeated.