Professional Documents
Culture Documents
Ipe Cia3
Ipe Cia3
Ipe Cia3
Roktim Mishra
2357349
Submitted to
Dr Marie Joseph Gerard Rassendran
MA International Studies
(March 2024)
Introduction:
Latin America’s entangled relationship with economic predominance has always defined
Latin America. Economic hegemony is the dominance and control that powerful nations or
institutions have over the economic affairs of smaller states or areas. Throughout history,
Latin America has faced numerous forms of economic dominance, ranging from colonial
exploitation to modern globalisation.
Throughout history, Latin America has faced different forms of economic dominance,
including colonial exploitation, neocolonialism, and financial dependence. The consequences
of these experiences continue to affect the region's economic trajectory, influencing
everything from trade connections and investment patterns to social welfare policies and
environmental sustainability initiatives. Unravelling the complexities of economic hegemony
in Latin America allows us to obtain a better grasp of the region's difficulties and identify
paths to greater economic sovereignty and inclusive growth.
Historical Context:
Before European contact, Latin America had no cohesive economy, and the region was
eventually merged into the Spanish and Portuguese empires. The people of the western
hemisphere (the so-called "Indians") had varying socioeconomic complexity. The most
complex and widespread at the time of European contact were the Aztec empire in central
Mexico and the Inca empire in the Andes, both of which grew without contact with the
Eastern Hemisphere before the late fifteenth-century European travels. The north-south axis
of Latin America and the small east-west continental area made transportation of people,
animals, and plants more difficult than in Eurasia, where similar climates exist along the
same latitudes. Much of what is known about pre-contact Latin American economies is found
in European accounts at contact and in archaeological records.
The colonial economy revolved around extracting precious metals like gold and silver
and then shipping them back to Europe to fund imperial ambitions and drive economic
growth. Latin America's rich natural resources, fertile fields, and plentiful labour became the
driving force behind Europe's wealth. At the same time, indigenous peoples were pushed to
the outskirts of society and subjected to forced labour and cultural assimilation.
The roots of economic hegemony in Latin America may be traced back to the colonial period
when European powers, particularly Spain and Portugal, established colonies for resource
extraction and exploitation. The encomienda and hacienda systems exemplified this
hegemonic relationship, in which indigenous peoples were compelled into working on
enormous estates owned by European elites. This colonial legacy exacerbated socioeconomic
inequality and laid the groundwork for external control over Latin America's economic fate.
The 19th and early 20th centuries saw the growth of new types of economic hegemony,
including neocolonialism and the imposition of economic models that benefited foreign
interests. The Monroe Doctrine, issued by the United States in 1823, asserted American
dominion over Latin America, warning European nations against meddling while implicitly
approving US domination. During this era, Latin American resources such as minerals,
agriculture, and labour were used to drive advanced economies' industrialization.
In the twenty-first century, Latin America continues to struggle with economic hegemony in a
globalised world typified by shifting power dynamics and new kinds of dominance. The
development of China as a global economic power has added new complications to the
region, with Chinese investment and trade reshaping Latin America's economic environment.
While Chinese involvement opens up prospects for infrastructure development and market
access, it also raises concerns about dependency and environmental deterioration. Latin
American countries must manage these new realities while also addressing long-standing
issues of inequality, poverty, and political instability.
The legacy of colonial exploitation reverberates across Latin American history, maintaining
patterns of inequality and underdevelopment that continue to affect the region's economic
landscape.
Economic hegemony in Latin America has taken different forms, including debt dependency,
unfair trade ties, and financial interventions. The debt crisis of the 1980s highlighted the
region's vulnerability to foreign shocks, as Latin American countries acquired large
obligations to international creditors. Structural adjustment programmes enforced by
institutions such as the International Monetary Fund (IMF) and the World Bank increased
dependency by supporting austerity and deregulation policies that prioritised creditor interests
over developmental requirements.
One of the most persistent forms of economic hegemony in Latin America is debt
dependency and the imposition of structural adjustment programmes by foreign financial
institutions. The debt crisis of the 1980s left many Latin American countries with
unsustainable debt levels, requiring them to seek aid from institutions such as the
International Monetary Fund (IMF) and the World Bank.
Unequal trade relations have also contributed to Latin America's economic hegemony. The
region's reliance on exporting primary commodities including minerals, agricultural products,
and oil has made it vulnerable to unpredictable worldwide markets.
However, trading terms have frequently been unfavourable to Latin American producers, with
main commodity prices fluctuating dramatically in global markets. Furthermore, trade
agreements and intellectual property rights regimes have historically favoured multinational
businesses' interests thereby restricting local industry development and impeding economic
diversity.
Furthermore, the impact of international financial institutions' monetary and fiscal policy has
limited Latin American governments' sovereignty. Restrictions in financial assistance
packages frequently prioritise creditors' interests over local populations' demands, sustaining
dependency patterns and reinforcing foreign players' power in influencing economic policy.
Contemporary Implications:
In the 21st century, Latin America is still dealing with the long-term consequences of
economic hegemony, which manifests itself as patterns of dependency, inequality, and
external influence. From the neoliberal policies of the 1980s to the challenges given by
globalisation and regional integration, the region is subject to a complex set of forces that
influence its economic destiny. The rise of China as a global economic power has introduced
new dynamics into the region, with Chinese investment and trade reshaping Latin America's
economic landscape. While Chinese engagement offers opportunities for infrastructure
development and market access, it also raises concerns about dependency and environmental
degradation.
One of the most significant consequences of economic hegemony in modern Latin America is
the region's persistent reliance on external players and global economic forces. Despite
efforts to diversify their economies and boost domestic industry, many Latin American
countries continue to rely significantly on the export of primary commodities like minerals,
agricultural products, and oil.
Globalisation has exacerbated this dependence, as Latin American economies become more
linked into global supply chains and vulnerable to the whims of international markets.
Fluctuations in commodity prices, currency exchange rates, and global demand can have a
significant impact on the economic fortunes of Latin American countries, exposing them to
vulnerabilities beyond their control.
To address the challenges posed by economic hegemony, Latin American countries have
sought to strengthen regional integration and cooperation through initiatives such as the
Union of South American Nations (UNASUR), the Bolivarian Alliance for the Peoples of Our
America (ALBA), and the Community of Latin American and Caribbean States (CELAC).
These initiatives seek to create unity among Latin American nations while reducing reliance
on external players.
The recent demise of regional integration initiatives such as UNASUR and ALBA highlights
the challenges of attaining real cooperation in a region marked by various interests and
historical rivalries. Nonetheless, the longevity of regional integration attempts demonstrates
that Latin American countries see the importance of working together to confront common
difficulties and express more autonomy in the face of external pressures.
Moreover, Chinese investment projects often come with strings attached, including
requirements for the use of Chinese labour and supplies, as well as favourable conditions for
Chinese enterprises. This can damage local industries and create disparities because gains go
mostly to Chinese investors rather than the general public.
The COVID-19 pandemic has emphasised the difficulties of relying on external actors, as
Latin American countries deal with disruptions to global supply chains, decreased export
demand, and shortages of critical medical supplies. The uneven distribution of vaccines has
highlighted the importance of greater regional self-sufficiency in healthcare and
pharmaceutical industry.
Conclusion:
Despite efforts to challenge hegemonic dominance and claim greater economic autonomy,
Latin America remains mired in a web of reliance and inequity. Regional integration
programmes have attempted to create unity and collaboration among Latin American
countries, but they confront obstacles due to geopolitical conflicts and ideological
differences. Furthermore, the advent of new global powers such as China creates new
dynamics in the region, increasing worries about dependency and environmental
sustainability.
The COVID-19 epidemic has exposed Latin American economies' vulnerabilities to external
shocks and disruptions in global markets. As countries deal with uneven vaccination
distribution and shortages of critical medical supplies, the necessity for increased regional
self-sufficiency and resilience becomes clear.
Finally, the task for Latin America is to forge a route to genuine economic sovereignty, one
that prioritises its people's well-being while also encouraging inclusive and sustainable
development. By facing the legacy of colonialism and globalisation, Latin America can chart
a more egalitarian and prosperous future for all of its people.
References:
Sims, B. J. (n.d.). Latin American Debt Crisis of the 1980s. Federal Reserve History.
https://www.federalreservehistory.org/essays/latin-american-debt-crisis
Diamond, J. (2003, September). Guns, Germs, and Steel in 2003. Antipode, 35(4), 829–
831. https://doi.org/10.1046/j.1467-8330.2003.00357.x
UNASUR’s Dangerous Decline: The Risks of a Growing Left-Right Split in South
America. (2018, May 3). Americas Quarterly.
https://www.americasquarterly.org/article/unasurs-dangerous-decline-the-risks-of-a-
growing-left-right-split-in-south-america/