March 20 Geo 188

March 20 Geo 188 - Geo188March20,2008

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Geo 188 March 20, 2008 Recall… after boom in 50s and 60s, some problems with ISI approach becoming apparent State often overpaid for asses from foreign companies o Large public indebtedness High levels of corruption (and military expenditure) o Recall: 1970s: 2/3 of LAC population lived under military dictatorships With markets for infant industries protected >> inefficiencies over time b/c existing inequalities not addresses, relatively small domestic markets for large  consumer durables (skewed industrialization ) Still heavily dependent on foreign capital/technology/ innovation These problems get compounded by… Oil price shock—1972-73 >> import costs rise rapidly Global recession and falling commodity prices especially after 1970>> Soaring state debt—countires still pouring money into state owned industry, military and  infrastructure,  yet what they are exporting is earning them less and less compared to  the price of what’s being imported o Governments borrow like crazy The Oil Shock and Debt Crisis OPEC countries o Petro-dollars  of the oil rich countries is invested in US financial system o Therefore there was a lending boom from US financial sector to LAC states who  are desperate for money Banks start lending to governments
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This note was uploaded on 12/20/2009 for the course GEOGRAPHY 188 taught by Professor None during the Spring '08 term at UWO.

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March 20 Geo 188 - Geo188March20,2008

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