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Latin America Political Instability

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Chris Jones

on 21 April 2014

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Transcript of Latin America Political Instability

SSWG7e. Analyze the impact of natural disasters and political instability on economic activity in Latin America.
Political Instability in Latin America
Case Study 1: Argentina
Case Study 3: Nicaragua
3 Instability Trends
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
Case Study 2: Ecuador
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.
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
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
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
What is Political Instability?
What have we already looked at in Latin America that can impact Political Stability?
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
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