The Great Depression of the 1930s caused political instability
in many Latin American countries that led to
military coups and militaristic regimes (see Chapter 5).
But it also helped transform Latin America from a traditional
to a modern economy. Since the nineteenth
century, Latin Americans had exported raw materials, especially
minerals and foodstuffs, while buying the manufactured
goods of the industrialized countries, particularly
Europe and the United States. Despite a limited degree of
industrialization, Latin America was still dependent on
an export-import economy. As a result of the Great Depression,
however, exports were cut in half, and the revenues
available to buy manufactured goods declined. In
response, many Latin American countries encouraged
the development of new industries to produce goods that
were formerly imported. Due to a shortage of capital in
the private sector, governments often invested in the new
industries, thereby leading, for example, to governmentrun
steel industries in Chile and Brazil and petroleum industries
in Argentina and Mexico.
In the 1960s, however, Latin American countries were
still dependent on the United States, Europe, and now Japan
for the advanced technology needed for modern industries.
To make matters worse, poverty conditions in
some Latin American countries limited the size of domestic
markets, and many countries were unable to find
markets abroad for their products.
These failures resulted in takeovers by military regimes
that sought to curb the demands of the new industrial
middle class and a working class that had increased in size
and power as a result of industrialization (see Map 10.1).
In the 1960s, repressive military regimes in Chile, Brazil,
and Argentina abolished political parties and turned to
export-import economies financed by foreigners while
encouraging multinational corporations to come into
their countries. Because these companies were primarily
interested in taking advantage of Latin America’s raw
materials and abundant supply of cheap labor, their presence
often offered little benefit to the local economy and
contributed to the region’s dependence on the industrially
developed nations.
In the 1970s, Latin American regimes grew even more
reliant on borrowing from abroad, especially from banks
in Europe and the United States. Between 1970 and
1982, debt to foreigners increased from $27 billion to
$315.3 billion. By 1982, a number of governments announced
that they could no longer pay interest on their
debts to foreign banks, and their economies began to
crumble. Wages fell, and unemployment skyrocketed.
Governments were forced to undertake fundamental reforms
to qualify for additional loans, reducing the size of
the state sector and improving agricultural production in
order to stem the flow of people from the countryside to
the cities and strengthen the domestic market for Latin
American products.
In the 1990s, the opening of markets to free trade practices
and other consequences of the globalization process
began to exert a growing impact on Latin American
economies. As some countries faced the danger of bankruptcy,
belt-tightening measures undertaken to reassure
foreign investors provoked social protests and threatened
to undermine the precarious political stability in the
region.
Other factors have also played important roles in
the history of Latin America since 1945. The Catholic
church had been a powerful force in Latin America for
centuries, but its hold over people diminished as cities
and industrial societies developed. Eventually, the church
adopted a middle stance in Latin American society, advocating
a moderate capitalist system that would respect
workers’ rights, institute land reform, and provide for the
poor. Some Catholics, however, took a more radical path
to change by advocating a theology of liberation. Influenced
by Marxist ideas, advocates of liberation theology
believed that Christians must fight to free the oppressed,
using violence if necessary. Some Catholic clergy recommended
armed rebellions and even teamed up with
Marxist guerrillas in rural areas. Other radical priests
worked in factories alongside workers or carried on social
work among the poor in the slums. Liberation theology
was by no means the ideology of the majority of Latin
American Catholics and was rejected by the church hierarchy.
Nevertheless, the Catholic church continued to
play an important role in Latin America by becoming the
advocate of human rights against authoritarian regimes.
The United States continued to cast a large shadow
over Latin America. In 1948, the nations of the region
formed the Organization of American States (OAS),
which was intended to eliminate unilateral action by one
state in the internal or external affairs of another state,
while encouraging regional cooperation to maintain
peace. It did not end U.S. interference in Latin American
affairs, however. The United States returned to a policy
of unilateral action when it believed that Soviet agents
were attempting to use local Communists or radical reformers
to establish governments hostile to U.S. interests.
In the 1960s, President Kennedy’s Alliance for Progress
encouraged social reform and economic development by
providing private and public funds to elected governments
whose reform programs were acceptable to the
United States. But the Alliance failed to work, and when
Marxist-led insurrections began to spread throughout the
region, the United States responded by providing massive
military aid to anti-Communist regimes, regardless of
their nature.
World History
