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Improvement of the Political and Economic Situation of Latin America

Most of the native populations were uneducated and unskilled, completely unable to assist in the development of the infrastructure necessary for the expanding exploitation of resources to be exported to Europe. European workers, who eventually became permanent residents, were needed especially for the construction of the necessary transportation facilities, particularly railroads. While the native population could provide the "muscle" for building the railroads, there were too few engineers and skilled machinists for designing and building the necessary cars and for planning the routes (Cortes Conde, 1992, p. 164).

Although this expansion of the export-import economy brought tremendous wealth during the first two decades of the 20th Century, it was based upon the demand of Europe. This demand reached a peak during the First World War and the reconstruction period immediately following the war. The high demand of this early period, however, was artificial; by the early 1920s it had evaporated. Fortunes in Latin America fell with the demand of the industrial nations; such an export-driven economy was particularly vulnerable to the fluctuations of the world economy (Cortes Conde, 1992, p. 165). Although the economic prosperity of the century's early years had enabled small manufacturing sectors to develop in some countries (Abel, 1990, p. 248), they too were dependent upon the greater wealth brought in by the exports. In fact, there was little or no market for these resources amongst neighboring countries because industrial development had yet to really occur. In addition to the sagging demand, exporting countries were also hurt as some resources began to be exhausted; as the resources became harder to find and extract, increasing amounts of capital and labor were required to exploit them, resulting in diminishing returns on investment (Cortes Conde, 1992, p. 165).

Other shocks to the Latin American economies were brought abo...

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Improvement of the Political and Economic Situation of Latin America. (1969, December 31). In Retrieved 13:36, August 17, 2017, from
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