Economics of Latin Economics of Latin AmericaAmerica

Panama Canal VideoPanama Canal Video

Clip Question – 1. How does the Panama Canal work?

Panama CanalPanama Canal Panama Canal is a Panama Canal is a

system of locks that system of locks that shortens the travel time shortens the travel time and distance from the and distance from the Pacific Ocean to the Pacific Ocean to the Atlantic OceanAtlantic Ocean

Panama Canal is an Panama Canal is an economic chokepoint in economic chokepoint in Latin America.Latin America.

OPECOPEC

Organization of Petroleum Exporting Organization of Petroleum Exporting CountriesCountries

Venezuela is a memberVenezuela is a member

Money from high oil prices has Money from high oil prices has allowed them to purchase warshipsallowed them to purchase warships

Venezuela Venezuela Check out this article and watch the clip: Check out this article and watch the clip: http://news.bbc.co.uk/2/hi/americas/7628899.stmhttp://news.bbc.co.uk/2/hi/americas/7628899.stm

Questions: Questions:

1. What are the warships going to do? 1. What are the warships going to do?

2. What implications does this have for the US? 2. What implications does this have for the US?

SWITCHSWITCH

Now switch over to the worksheet. Now switch over to the worksheet.

Do not take notes in your notebook Do not take notes in your notebook anymoreanymore

Your goal is to use the notes on the slides Your goal is to use the notes on the slides to complete the worksheetto complete the worksheet

Attach the worksheet into your notebook Attach the worksheet into your notebook next to your Trade intro page. next to your Trade intro page.

Natural ResourcesNatural Resources

Minerals:Minerals:gold gold ironironcoppercoppersilversilvernickelnickel

Natural ResourcesNatural Resources

Agriculture:Agriculture:good climategood climatefertile soilfertile soil

Colonial Influences in the Colonial Influences in the CaribbeanCaribbean

Spanish:Spanish:Established sugar plantations Established sugar plantations Indians and Africans:Indians and Africans:Used as forced laborUsed as forced labor

Cash CropsCash CropsCrops grown for direct sale, Crops grown for direct sale,

not for use in the regionnot for use in the regionExamples: sugar, bananas, Examples: sugar, bananas,

citrus fruits, coffeecitrus fruits, coffeeBenefit land owners, not Benefit land owners, not

workersworkers

Economic Growth after Economic Growth after ColonialismColonialism

Caribbean island resorts Caribbean island resorts Generates incomeGenerates income Provides jobsProvides jobs

NAFTANAFTA North American Free Trade North American Free Trade

AgreementAgreement

Trade agreement creating a Trade agreement creating a cooperative trade zone between the cooperative trade zone between the US, Canada, and MexicoUS, Canada, and Mexico

Mexico trying to reduce poverty and Mexico trying to reduce poverty and increase industrializationincrease industrialization

NAFTA ArticleNAFTA Article

Access the article below: Access the article below: http://news.bbc.co.uk/2/hi/americas/http://news.bbc.co.uk/2/hi/americas/

3492009.stm3492009.stm

Answer these questions in your Answer these questions in your NOTEBOOK: NOTEBOOK:

1. What are the positive and negative effects 1. What are the positive and negative effects of NAFTA. of NAFTA.

- Answer them for both Mexico and the US- Answer them for both Mexico and the US

MaquiladorasMaquiladoras Factories in Mexico used to Factories in Mexico used to

assemble imported materials into assemble imported materials into finished products and export them finished products and export them mostly back to the USmostly back to the US

Located mainly along northern Located mainly along northern border of Mexicoborder of Mexico

Examples of goods-electronic Examples of goods-electronic equipment, clothing, furnitureequipment, clothing, furniture

MaquiladorasMaquiladoras

Where people liveWhere people live

Central America-agriculture still Central America-agriculture still importantimportant

Caribbean islands-tourism Caribbean islands-tourism importantimportant

Would these jobs be found in Would these jobs be found in urban or rural areas?urban or rural areas?

Informal EconomyInformal Economy jobs found in the tourism industry jobs found in the tourism industry

that do not include benefits or that do not include benefits or protection of workersprotection of workers

FTAAFTAA Free Trade Area of the AmericasFree Trade Area of the Americas Offers greater trading Offers greater trading

opportunities, world markets and opportunities, world markets and economic growth for member economic growth for member countriescountries

To include all countries of North To include all countries of North and South America except Cubaand South America except Cuba

Designed to expand NAFTADesigned to expand NAFTA

Mercosur - Trade GroupMercosur - Trade Group

•South American Common Market

•Created to increase trade, increase South American GDP’s

•Similar to EU and NAFTA

Mercosur member nations

MercosurMercosur

GoalsGoals—to make members’ —to make members’ economies more stable, economies more stable, – increase trade in the region, increase trade in the region, – to use some money to improve the most to use some money to improve the most

needyneedy

Greatest South American success Greatest South American success StoryStory

The country of Chile:The country of Chile:– Participation in global tradeParticipation in global trade– Abundant Natural ResourcesAbundant Natural Resources

ChileChile South America’s South America’s

greatest economic greatest economic success story.success story.

1. Global Trade1. Global Trade2. Exports Food and 2. Exports Food and

COPPERCOPPER3. Mercosur allows 3. Mercosur allows

them to trade them to trade freely.freely.

GDP per capita – 1945-2000

Chile = Blue

Rest of South America = Orange

CorruptionCorruption

CorruptionCorruption - Acting dishonestly or - Acting dishonestly or immorally.immorally.

A history of corruption is one reason A history of corruption is one reason most Latin American countries are most Latin American countries are still developing economically.still developing economically.