The Great Depression and the Americas (1929 – 39) Objective 3.5: Consider the causes and effects of the Depression and how effectively they were dealt with in the countries of Latin America, focusing on Argentina and Brazil US trade with Latin American as a percentage of total Latin American trade Countries of South America 1913 1918 1927 Imports from USA 16.2 25.9 26.8 Exports to USA 16.8 54.8 25.2 Countries of Central America 1913 1918 1927 Imports from USA 53.2 75.0 62.9 Exports to USA 71.5 73.4 58.4 *WHAT CONCLUSIONS CAN YOU DRAW FROM THE STATISTICS?* Warm-Up: Statistical Analysis Cartoon Analysis: American Foreign Policy in the 19th and early 20th Century Monroe Doctrine (1823) Cartoon Analysis: American Foreign Policy in the 19th and early 20th Century Roosevelt Corollary (1904) AKA “Big Stick Diplomacy” Cartoon Analysis: American Foreign Policy in the 19th and early 20th Century Dollar Diplomacy (1909) Cuba Philippines Cartoon Analysis: American Foreign Policy in the 19th and early 20th Century “Good Neighbor” Policy(1933) Puerto Rico Professor Walter LaFeber argues that the United States developed a foreign policy which deliberately made Latin American / Caribbean nations its economic dependents from the early 19th Century ◦ Take notes to track his argument ◦ Decide whether what points are logical and which do not seem fully supported Essay Analysis Big Question: How healthy were the economies of Latin American countries during the 1920s? Relied heavily on the export of raw materials ◦ Dependent on the production and sale of one product or monoculture—i.e. coffee in Brazil Economic developments in Latin America Relied heavily on the USA and Western European countries, particularly Britain, for foreign trade and investment ◦ Neo-Colonialism? Economic developments in Latin America Geographical factors made it difficult for Latin American countries to trade significantly with one another Maldistribution of income—can’t afford manufactured goods Competition with already industrialized nations to produce industrialized goods Reasons for dependence on foreign trade and investment As a result of World War I, Western European countries became less significant trading partners US investment in Latin America grew from $1.5 billion in 1924 to $3 billions by 1929 “Dollar Diplomacy”—interested in investment rather than trade Growth of US Investment Political developments US Supported Dictatorships Venezuela, Paraguay, etc. $ US Supported Democracies Argentina, Brazil, etc. $ Communism? $ Various factors meant that the Great Depression would hit the countries of Latin America hard as they were not well equipped to deal with it… ◦ Governments (including US-set democracies) were partial and tenuous ◦ International demand for the primary products supplied by Latin America was largely in decline ◦ Growth in foreign ownership and investment meant that profits from trade went outside the country The onset of the Depression in Latin America What do you think of when you hear/see the following word? ◦ GLOBALIZATION Why do you think that globalization could be controversial? Warm-Up: Term Definition Read the question given to you Answer the question given to you ◦ You may use the “cheat sheet” if necessary to help form your response Share your response (should only be sentence or two) with the class “Ten Basic Questions About Globalization" “Ten Basic Questions About Globalization" ISI Defined Import Substitution Industrialization ◦ Trade and economic policy based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products ISI in Latin America In Latin American countries where ISI was most successful, it was accompanied by changes in government ◦ Old neocolonial governments were replaced by semidemocratic governments. Banks, utilities, and certain foreign-owned companies were nationalized or transferred ownership to local businesspeople. The two case studies provided, focus on two large countries that were strongly affected by the Depression—not all countries were hit as hard, nor were all countries so large Questions to consider… ◦ What type of government did this country have in place? ◦ Was its economy dependent on one crop or diversified? ◦ Did it have any industry? ◦ Who were its main trading partners? ◦ What sort of class structure did it have? ◦ How hard was it hit by the Depression? ◦ How did it get out of the Depression? Case Study: Brazil and Argentina $$$ Concentration on primary products for exports Dominance of coffee Lack of industrial development Amount of national debt Brazil in the 1920s: Economic problems Dominated by populous provinces of Sao Paulo and Minas Gerais Growth of military & urban middle class involvement = modernization Low participation in elections Growing opposition to political dominance by large landowners Brazil in the 1920s: Political problems Catholic church concerned with social problems Vargas in Brazil Getúlio Vargas ◦ President/Dictator from 1930-45 and 1951-54 ◦ Established “Estado Novo” ruled by decree set up a special police force abolished personal freedoms introduced strict press censorship “The Estado Novo does not recognize the rights of the individual against the collective. Individuals do not have rights; they have duties. Rights belong to the collective!” Diversification Avoiding overreliance on singular export of coffee Five-Year Plans Industrial Growth Growth in oil and steel production Brazil in the 1930s— Fighting the Depression 1860-1930—strongest economy in South America (annual growth averaged 6.3%) Absorbed 6 million immigrants from 18701914 (mainly from Italy and Spain) Argentina up to the 1920s: Economic developments 1916—peaceful transition to full democracy with the election of Radical Party leader Hipólito Yrigoyen ◦ attempts to win support of middle classes / urban working classes ◦ reforms education system Argentina up to the 1920s: Political developments Tragic Week (January 1919) Budget deficit extremely high Yrigoyen cut public spending Supporters lost job Argentina in the 1930s— Immediate Effects of Great Depression Concordancia: 1931 military coup— overthrows Yrigoyen National Democrats, Independent Socialists, Nationalists General Agustín Justo president from 1932 Argentina in the 1930s— “Infamous Decade” Growth of nationalism Diversification Industrial Growth Increasing Trade Avoiding overreliance on singular export Growth textile production Roca-Runciman Agreements w/ Britain (1932) Argentina in the 1930s— Fighting the Depression Eden-Malbrán Treaty w/ Britain (1936) Using the summary diagram, write a response to the following prompt… Compare and contrast the economic policies undertaken by Argentina and Brazil during the Depression Quickwrite