From Colonial Past to Global Reality
Chapter 6: Internationalization of economic relations and the internationalization of monopolies
From the 1990s, economic relations quickly began to take on completely different contours. As seen in the previous chapter, the industrialization of Latin American and Asian countries did not change the domestic economic structure of these societies. This led, in both regions (and sometimes for different reasons), to industrialization processes that maintained or even increased external dependence. An eloquent example of this was the growth policy based on import substitution in Latin America – see Chapter 5, section 1.c. No wonder, therefore, that, together with economic growth, the external debt of these countries from 1950 to 1970 increased dramatically. Macroeconomic interdependence between these systems and the developed world, rather than decreasing, expanded greatly. The consequences did not wait. Having triggered the Great American inflationary crisis of the 1970s, the macroeconomic response adopted had important effects on developing economies. The increase in interest rates charged since 1979 by the American Fed made debt service payment (interests) for most of the developing countries of the Southern Hemisphere unbearable. The immediate consequence was the reduction or near elimination of growth capacity in these countries, which means that in the 1980s a period of zero or negative growth was verified in the regions analysed. In the medium term, however, the result was even more drastic. States, battered and exhausted by debt service, had to direct their economic efforts to exports to increase their reserves in dollars.
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