Latin America
Section 3
Democratic and Economic Reforms
Preview
• Main Idea / Reading Focus
• Return of Democracy
• Faces of History: Violeta Chamorro
• Democracy in Mexico
• Quick Facts: Mexico Then Mexico Now
• Market Reforms
• Map: Poverty in Latin America
• Visual Study Guide / Quick Facts
• Video: The Impact of NAFTA
Latin America
Section 3
Democratic and Economic Reforms
Main Idea
In the 1980s, repressive regimes in Latin America fell, and more
moderate elected leaders brought some measure of political and
economic progress.
Reading Focus
• How did democracy return to Latin America?
• How has democracy in Mexico changed in recent years?
• What have been the results of market reforms in Latin
America?
Section 3
Latin America
Return of Democracy
After decades, dictatorships across Latin America started falling in the
1980s and 1990s. Moderate civilian politicians put an end to military
rule, and began a series of political and economic reforms.
Failures of
Dictatorships
• Many failed to
achieve social,
economic reforms
• Poverty,
malnutrition, infant
mortality remained
high
Peasants
• Landless poor
streamed into
cities, searched for
work
• “Brazilian miracle”
miracle for military,
landowners,
wealthy business
people only
No Security
• Dictatorships did
not bring stability
• Death squads, civil
rights repressed,
mysterious
disappearances,
torture, killings
• People began to
demand change
Latin America
Section 3
A Peaceful Transition
• Despite history of violence, return of democracy fairly peaceful
• Combination of internal, external forces applied pressure for reform
• International lenders demanded changes in way countries governed
as a condition for receiving loans
Voting Rights
• Pro-democracy groups called for countries to restore voting rights,
allow political opposition
• Military leaders relaxed restrictions, integrated limited freedoms
• Given a chance to vote, people did
• Voted out military, voted in new civilian governments
Section 3
Latin America
Return of Democracy
New civilian governments
• Democracy returned in Brazil, early 1970s
• Argentina returned to democracy after Falklands War,
1982
• Central American countries
– Returned to relative calm 1980s, 1990s
– Elected moderate governments like that of Violeta Chamorro in
Nicaragua
• Chile
– Enjoyed more economic success than most of region
– Pinochet regime fell, 1990
Latin America
Section 3
Latin America
Section 3
Identify Cause and Effect
What factors brought about the return of
democracy in Latin America?
Answer(s): severe social and economic
problems; new requirements for reform from IMF
and other leaders in order to obtain loans; prodemocracy groups
Section 3
Latin America
Democracy in Mexico
Mexico’s path to democracy was very different from other countries in
the region.
One-Party Rule
• Mexico never a dictatorship,
but not very democratic either
• Institutional Revolutionary
Party, PRI
– Ruled Mexico with little
opposition for more than 70
years
– Controlled congress
– Won every presidential
election
PRI Politics
• Political victories achieved
through fraud, force, bribery
• Still economy remained strong
• Industry grew for many years
• Industry became dominated by
foreign companies
• Companies’ profits increased,
less money stayed in Mexico
• Foreign debt grew; poverty,
inequality remained
Section 3
Latin America
Democracy in Mexico
Demands for Reform
• Worsening economic
conditions, frustration with
political corruption, crises
blamed on PRI
• Police, military fired on peaceful
student protestors, 1968;
hundreds dead, wounded
• Government tried to cover up
extent of tragedy
Other Crises
• 1980s, world oil prices fell,
caused Mexico’s oil revenues to
be cut in half
• High inflation, unemployment
caused severe economic
decline
• 1985, earthquake destroyed
parts of Mexico City, created
more problems for government,
economy
Section 3
Latin America
Democracy in Mexico
1992
• 1992, Mexico, U.S., Canada
signed North American Free
Trade Agreement
• NAFTA eliminated tariffs on
trade between the countries
• Designed to improve
economies, but Mexicans
feared effects of increased
competition from foreign
imports
1994
• Peasant uprising occurred in
Mexican state of Chiapas
• Government devalued Mexican
currency, shook public’s
confidence
• More Mexicans faced new
hardships in their lives
• Something had to change
Section 3
Latin America
Democracy in Mexico
A New Era
• 1997, opposition parties won seats in congress
• 2000, voters ended 71 years of PRI rule
• Elected conservative PAN party member Vicente Fox president
Challenges
• Had to create functioning government, stable economy
• Worked to end Chiapas uprising, end corruption, improve relations with U.S.
• Made progress on most goals
2006
• Strained U.S.-Mexico relations on reform of immigration laws, border security
• Mexico maintained commitment to democracy with 2006 elections
• Conservative PAN party member Felipe Calderón won extremely close race
Latin America
Section 3
Section 3
Latin America
Find the Main Idea
In what way was Mexico not very democratic
until 2000?
Answer(s): One party ruled the government for
over 70 years.
Section 3
Latin America
Market Reforms
Economic Changes
• Shift to democracy from Mexico
to Argentina brought economic
changes
• Western banks pressured
countries into reform measures
Reforms
• Sell government services to
private enterprise
• Return inefficient governmentcontrolled businesses to private
ownership
Reforms
• Drastically cut government
spending
• End some government
subsidies of businesses
Reforms
• Strengthen regional trade
agreements, establish new
ones
• Measures intended to reduce
inflation, expand imports
Section 3
Latin America
Results of Market Reforms
Mixed Results
•
•
•
•
•
Many countries experienced economic growth, stability, others suffered
Brazil’s inflation fell from quadruple digits to less than 7 percent by 2006
Chile’s reforms cut poverty rate in half between 1990 and 2003
Business owners celebrated economic changes
Bankers, international lenders loaned billions for increased economic
development in Latin America
Struggles Continued
• Other parts of Latin America
struggled
• Exports from region remained
sluggish
• Countries dependent on single
commodities
Hardships
• Many reform measures caused
hardships in some countries
• Argentina experienced deep
recession in 2001, 2002
• Could not pay multi-billion-dollar
debt
• President devalued currency
Section 3
Latin America
Results of Market Reforms
Argentina’s currency devalued
• Banks failed, unemployment rate reached more than 20 percent
• Even many middle-class struggled to buy basic necessities
• Economy stabilized by end of 2003
No positive effects
• Even where market reforms benefited national economies, many people did
not feel positive effects
• Poverty still widespread in Latin America, gap between rich and poor wider
Supporters
• Supporters of market reforms say reforms have not gone far enough
• Key elements of reform, laws to protect property rights, business contracts,
have not been made; political corruption still affects Latin American business
Latin America
Section 3
Latin America
Section 3
Reactions to Market Reforms
Dissatisfaction with economic problems and government’s inability to
solve them has led to more political and economic shifts in the region.
Venezuela Populist
• Venezuelans elected Hugo
Chávez president, 1998
• Set out to eliminate poverty
• To do so rejected certain
aspects of capitalism
• Limited success, problems
remain
• Critics concerned he has
turned toward dictatorship
Bolivia and Brazil
• Evo Morales elected Bolivian
president, 2005
• Nationalized gas industry,
supported coca farmers
• Brazil elected Luiz Inácio Lula
da Silva, 2002
• Former union leader,
sympathetic to poor
• Managed to balance interests
of social reformers,
businesses
Section 3
Latin America
Make Generalizations
How have people in Latin America reacted
to market reforms in recent years?
Answer(s): by electing leftist-leaning
governments or those who are sympathetic to the
plight of the poor
Latin America
Section 3
Section 3
Latin America
Video
The Impact of NAFTA
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