Trade, Industrialization, and Integration in Twentieth-Century Central America

By Irma Tirado de Alonso | Go to book overview
Save to active project

The social conditions existing at the start of the 1980s included extreme poverty, unequal income distribution, limited access to education and health services, and poor levels of nutrition. It is natural to conclude that the growing unemployment and inflation over this decade only reinforced and worsened these already appalling conditions.


SUMMARY AND OVERVIEW

One of the main conclusions that can be drawn from this analysis is that prospects for economic growth in the region do not look very good. The circumstances leading to this conclusion have been discussed throughout the chapter, beginning with the implementation of the ISI model (via the CACM), which led to a misallocation of resources away from the export sector. This, in turn, reduced the region's ability to import the capital goods necessary to maintain current levels of GDP. The loss of foreign exchange earnings also triggered a financial crisis whereby the amount and number of sources of funds available for investment rapidly dwindled. Trade and budget deficits resulted in massive capital flight as government intervention became imminent. Furthermore, in order to secure necessary loans from the IMF, governments in the region were obliged to offset budget deficits with reductions in expenditures and deficit-financing measures. This led directly to a reduction in the level of capital expenditures made on infrastructure, and to a reduction as well in the amount of funds available for private investment as governments competed with the private sector for domestic savings.

Recent figures on employment and wages also, suggest that social conditions deteriorated rapidly and that this phenomena was inextricably linked to the region's financial crisis. Without new investment, jobs cannot be created. Moreover, inasmuch as population growth exceeded employment growth in this decade, the cycle of poverty was inevitably reinforced, creating a serious obstacle to future growth. Although there was some improvement in the investment picture in the mid-1980s, budget deficits were on the rise again in the latter part of this decade and export earnings still remain lower than the 1980 figures. Some hard lessons were learned during this latest crisis. Unfortunately, another financial crisis may be looming in the not-too-distant future, and once again the region will be tested.


NOTE
1.
Merchandise exports are used here because they are significantly more important than service exports, except in the case of Panama.

-36-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited page

Bookmark this page
Trade, Industrialization, and Integration in Twentieth-Century Central America
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen
/ 294

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?