Much of the economic situation in Latin America is a product of its history, from colonialism to the neoliberal realpolitik that leaves many of its countries at the whims of a globalized economy. The colonial legacy of so-called “banana republics” remains today – with economies still largely based on commodity exports, growth is vulnerable to the fluctuations of the global price of commodities. This leaves much of Latin America at a disadvantage, where many countries are still motivated by precarity to sustain monoculture practices to survive in the global market. Modern efforts to diversify may insulate against these fluctuations, so long as these approaches do not incite the ire of the United States.
Foreign ownership of resources in Latin America is currently estimated to be around 39%. Attempts to nationalize resources most central to the economy, especially oil, tended to provoke anxieties in the U.S., often with brutal foreign policy responses. President Salvador Allende nationalized copper mines in Chile, putting him at odds with the United States which ushered in the dictatorship of Pinochet. Oil nationalization occurred in Bolivia and Mexico in 1937 and 1938 respectively, establishing a period of tension with the United States, both with its government and its private companies. This trend continues, judging by the Review of International Political Economy from 2011, which states, “Recent hydrocarbon nationalizations in Bolivia, Venezuela, and Ecuador have renewed debates about the dangers of radicals, populists[…]”.
Sanctions are another obstacle that hinders economic stability. Directly linked to inciting sharp declines in foreign investment, sanctions often block loans from international financial institutions such as the World Bank, the IMF and the Inter-American Development Bank. In the 1980s, the IMF began to “intervene” in domestic policy making, and many countries in the Global South suffered debt crises fed by the easy lending of petrodollars, global recessions, and a sharp increase in U.S. Federal Reserve interest rates. Amidst the crisis, the IMF offered bailout programs with “unprecedented and painful conditions attached.” Among these conditions were austerity measures that prevented economic growth and often involve cutting funding to essential social programs in Latin America. These measures also led to higher unemployment and underemployment, lower real wages and incomes, and increased poverty.
The people who suffer under these economic realities, with roots over centuries, are left with a country that no longer feels safe or stable. Understandably, many are motivated to seek better opportunities elsewhere, to seek stability. As the effects of climate change worsen living conditions as well as limiting and destabilizing rural livelihoods, the numbers are likely to grow. This economic instability in Latin America is part of the long shadow cast by history, its effects stifling its growth and hindering the wellbeing of its people.
Be very careful!
Beware of notaries, immigration consultants, or anyone who is not qualified and prepared in these matters. Always seek the advice and services of an immigration attorney for your immigration processes and procedures.