Latin America
During the 1960’s and 70’s the two most stable countries in Latin American were Mexico and Venezuela. Both countries enjoyed political stability and economic progress through these two decades. The relative similarities between these two countries stability and political/economic conditions also meant, however, that both of them would suffer in the 80’s and 90’s. As in most countries the key to political stability in Mexico and Venezuela lie in the economic stability and prosperity. This meant that with the overall economic fallout in Latin America in the 80’s, which hit Mexico and Venezuela particularly hard, would send both countries into a period of deep political instability. In retrospect both countries needed to shift their economic policies from an inward (ISI) approach to a more outward (EOI) approach. This would have helped both weather the economic problems in the 80’s and in turn retaining their political stability. It is no secret that the most important factor in a country maintaining political stability is the consistent stability of their national economies. With a stable and progressive economy the government is able to redistribute funds and provide more social programs
Without these large income sources Mexico and Venezuela were both unable to maintain economic prosperity under the ISI system. The collapse of oil prices in the early 80’s caused Venezuela’s economy to fall into a deep recession. With the loss of oil as a source of income that government had to rely on its industry. Mexico also dealt with similar problems. The fall of oil prices also hurt their economy, but it was the economic fallout in the United States that really hurt Mexico. Due to this close interdependency the fall of the United States economy in the 80’s, while mild, meant that Mexico’s fall was much worse. It is here that the troubles with ISI became clear. The years of protection that ISI had provided to industry meant that, compared to the rest of the world, Mexico’s and Venezuela’s manufacturing was inefficient and could not turn substantial profits. This also meant that both countries had to import a much greater amount of products than they were exporting. This loss in revenues and rise in costs caused a great debt problem in both Mexico and Venezuela. Due to the current instability in Venezuela and the recent coup attempt in April 2002 it may be useful to consider what steps the leaders of Venezuela could have taken before the fall from power in the 1980’s. Since the primary cause of this instability can be attributed to the economic downfall in Venezuela the solution follows logically that maintaining a stable economy could have saved Venezuela. This meant that form the very beginning Venezuela needed to not rely so heavily on their oil industry to support their economy. In replacement of the oil industry Venezuela ne
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Approximate Word count = 1131
Approximate Pages = 5 (250 words per page double spaced)
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