The Economy of Latin America

The Economy of Latin America — page 3 — INTRODUCTION T he region of Latin America covers all the Americas south of the US border Mexico Central America South America and the West Indies about 15 percent of the earth Its diverse land includes rain forest desert and savanna The largest countries in Latin America by area are Brazil Argentina Mexico Peru Colombia Bolivia Venezuela and Chile Historically their economies have traditionally been driven by the production of commodities such as oil silver and corn In more recent years growth in services and manu facturing have played a larger part in their markets overall From the late fifteenth through the eighteenth cen turies Portugal and Spain controlled most of mainland Latin America Spain the Netherlands Britain and France controlled various Caribbean islands In the early nine teenth century independence movements swept through most of Latin America Today most Latin American countries are indepen dent nations although some West Indian islands remain part of European nations A Spanish map from the sixteenth century shows the region that is modern-day Mexico Most of Latin America was ruled by Spain or Portugal 4

The Economy of Latin America — page 4 — INTRODUCTION Latin America stretches from Mexico in the north to the tip of South America including all of the countries that make up Central America South America and the West Indies 5

The Economy of Latin America — page 5 — After gaining their independence many Latin American countries set up republics They modeled these govern ments after governments in northern Europe and the United States Many countries experienced political instability National governments were rapidly replaced This polit ical instability also affected the region’s economies The countries struggled to find sources of income to pay for new military and government expenses The governments com monly found themselves in financial difficulties In the nineteenth century industrialization spread through Europe and North America These countries turned to Latin America for its raw materials By the second half of the nineteenth century Latin America became an important exporter of raw materials Most Latin American countries had one or two main exports typically minerals or foods until the 1950s Relying on only a few exports made these countries vulnerable to changes in global demand Although many people talk about Latin America as one region there are enormous differences in the area The people live in a large number of independent nations and the geography and climate of each country can vary greatly As a result the economies of each nation are diverse Areas such as Mexico and Central America export many manufactured goods while countries in South America are major exporters of agricultural commodities petroleum and minerals such as iron ore Most of Latin America’s economies rely on capitalism In this type of economy trade and industry are generally controlled by private companies However the governments intervene in some areas of investment industry land owner ship and trade Today agriculture remains an important part of the Latin American economy In general about one-fourth of 6 THE ECONOMY OF LATIN AMERICA

The Economy of Latin America — page 6 — INTRODUCTION Made up of many independent countries Latin America is a very diverse region that is rich in natural resources Each area has its own native plants animals and resources 7

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