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Political Instability in Latin America

Political Instability in Latin America. SSWG7e. Analyze the impact of natural disasters and political instability on economic activity in Latin America. Overview. Latin America is the 3 rd most unstable region in the world.

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Political Instability in Latin America

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  1. Political Instability in Latin America SSWG7e. Analyze the impact of natural disasters and political instability on economic activity in Latin America.

  2. Overview • Latin America is the 3rd most unstable region in the world. • Only three Latin American countries were consistently democratic over the thirty year period: Costa Rica, Colombia, and Venezuela. • The rest of the countries had some sort of democratic to autocratic change. • Political instability hinders economic growth

  3. 3 Instability Trends • Democratic countries = stability • When ethnic groups fight & there’s a big gap between rich & poor, instability is more likely to happen • Economic factors don’t determine stability, but political stability determines economics

  4. Case Study 1: Argentina • Had 18 years of democracy, but changed in 2001 with food riots and overthrow of government. • More riots happened after the new government took over. • Currency was devalued, restrictions on bank accounts

  5. Case Study 2: Ecuador • 2000 • Involved in a recession when overthrow of government happened. • Started as a grassroots movement—natives were the ones who started the movement. • Military involvement • Government was corrupt—caused inflation, job loss, bank issues

  6. Case Study 3: Nicaragua • Sandinistas overthrew previous Somoza dictatorship. • Sandinistas originally supported by US, but then had communist ties • US blocked World Bank loans, placed embargoes on Nicaragua—economy collapsed.

  7. Case Study 4: Venezuela • Several coup attempts • Hugo Chavez—ran on the idea of making things more equitable • More communist, taking over private businesses etc. • Oil industry was nationalized (South American OPEC member) • Been “democratic” the whole time

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