Neoliberalism in Latin America
From the 1930s until the 1980s state intervention and protection were key components of most Latin American economies. In these years many Latin American countries were used an Import-substitution industrialization based economy trying to reduce dependence on foreign imports and replacing them with domestic production. Due to the use of an Import-substitution industrialization based economy Latin American countries were forced to keep high tariffs to protect the private companies of their countries. This combined with many Latin America countries providing numerous government subsidized programs eventually led to the 1982 debt crisis.
This debt crisis created a vacuum affect in Latin America
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Neoliberalism also benefitted the middle class of Latin America. Chasteen argues the middle class benefited from a neoliberal economic model because of the cheap products that were produced due to the maquiladoras in Latin America as well as cheap products that were being imported to Latin America because of the newly reduced tariffs. This was very beneficial for the middle class for two reasons. First, under neoliberalism the middle class society who had money to spend, now had more choices because the large influx of items that were now being imported into Latin America. In his article, “Magical Neoliberalism”, Alberto Fuguet argues that neoliberalism was what led to amenities like large scale movies from Hollywood and other services, like fast food chains, to come to Latin America. Secondly, neoliberalism was beneficial to the middle class because with a larger selection of goods comes competition. With competition companies foreign and local now had to produce the best quality goods at the lowest price in order to continue to receive business from the middle class. Neoliberalism also benefited the middle class of Latin America because of the advancement in technology that occurred because of the privatization of water resource centers, electrical companies, and telecommunication companies. The privatization of these companies allowed them to modernize as well as make them more reliable.
Some argue that neoliberalism was