Introduction
Long-standing challenges with poverty, slow growth, inequality, and unstable finances have been exacerbated by bad economic management and a lack of stability in the region’s finances. High levels of leadership turnover, poor scores on international measures of institutional effectiveness, frequent political crises, widespread violence (especially in Colombia and Peru), and possibly shaky democracies1 are all symptoms of a system that is struggling to govern effectively. All of these governance issues have an impact on the level of democracy and also provide apparent hurdles to sustained economic progress. The Indian economy has also seen the effects of bad leadership and political unrest. Colombia and Peru, two countries in the Andes, have had slower economic growth over the past decade than the rest of Latin America. The succeeding paragraphs examine how political and economic theories, such as modernization theory, dependency theory, and the resource curse, might help us make sense of the democratic evolution in Colombia and Peru.
Modernization Theory
Colombia
Beginning in the new millennium, Colombia faces many complex challenges. Even though Colombia is a democratic state with a long history of civilian administration, its political regime has historically been authoritarian (Vanden 5). It has repeatedly failed to give its population adequate fundamental liberties and civil rights guarantees. Two long-standing Marxist guerrilla factions, over 2 million displaced persons escaping rural violence, an entrenched drug trade centred on coca and opium crop production and processing, and massive US pressure to eliminate the drug trade (Vanden 7). Despite these seemingly insurmountable issues, Colombia stands out for its bustling cities and enterprising population. The country’s artists, from the Nobel Prize-winning novelist Gabriel Garcia Marquez and the world-famous painter/sculptor Fernando Botero to the international music phenomenon Shakira, Juanes, and Carlos Vives, display outstanding innovation in their respective fields. The political sphere is remarkable for the courage of many peaceful political activists, its historical ability of political elites to compromise, and the remarkable capability of ordinary individuals to “bumble through” repeated crises (Belfer 58). Despite its unique combination of features, Colombia has been one of the central Latin American countries that have received the least attention from scholars.
Peru
Peru has made history with its four consecutive years of open elections. After a downturn in 2015 and a boom in 2009 due to the global financial crisis of 2008, the country’s economy is back on track as of 2016 and is riding the rising tide that began in 2002. (Bajak 4). Christine Lagarde, the head of the World Bank, hailed Peru’s economic revival as “extremely significant” for Latin America (Bajak 3). The economic model that Peru has pursued for about three decades but that President Garcia so enthusiastically adopted is lauded in Peru. Before debating the merits of Peru’s recent growth model, academics must recognize the country’s significant successes. Several other economic indices indicate Peru’s robust economic performance during the past three decades. Between 1993 and 1998, domestic investment accounted for 20.8% of GDP, whereas between 2010 and 2014, that number increased to 26.6% (Acemoglu 27). Tax revenue also expressed as a percentage of GDP, increased from 12.6% annually between 1981 and 1990 to 16.4% annually between 2011 and 2014 (Przeworski 14). Moreover, perhaps most drastically, the national debt fell from 51.1% of GDP before 1999 to just 20% in 2014 (Przeworski 12). The steady economic expansion has helped bring about a remarkable decrease in poverty.
Dependency Theory
Dependence theory is a way of explaining economic growth that attributes significant weight to external variables. In the 1950s, Raul Prebisch, who was serving as the head of the United Nations Economic Agency for Latin America, directed the development of dependence theory (Cardoso 32). He was worried that technological advancements in the industrialized west would not necessarily assist countries in less developed parts of the globe (Bajak 3). According to the findings of their investigation, economic problems in less developed nations were typically brought on by financial activities in more developed nations.
Colombia
The disparity in living standards between industrialized and developing countries has been a source of worry for decades. The developed world has enacted policies to narrow the wealth gap between nations out of both humanitarian and canonical concerns for the globe’s less fortunate people (Vanden 5). In order to progress toward modernization, education has been viewed as crucial by at least one nation. However, education seems to have had little impact on reducing income inequality (Fukuyama 24). This study used Dependency Theory as a theoretical framework to demonstrate the effectiveness of international assistance. However, while it has been widely hailed as a tool for development, it only occasionally serves to reinforce the internal and external dependent relationships that have the potential to speed up advancement.
Secondary data acquired in Colombia were used to examine four aspects of the educational system there. An educational system that does not promote equal access or social mobility was identified as a manifestation of reliance (Cardoso 32). Foreign aid in education has been misused to increase economic mobility. It has been utilized to improve and perpetuate an educational system that does not promote the societal reforms necessary to retain equality and social mobility.
Peru
Peru’s history is unique and extensive compared to other South American countries. It is where the Incas established the pinnacle of the Andean civilization, which gave rise to some of the most advanced Native American cultures in the Americas (De Laet 12). The Incas controlled much of modern-day Argentina and Chile in addition to Peru, the equator, and Bolivia. Beginning in the middle of the 15th century, the Inca Empire expanded to become the continent of America’s largest Empire prior to colonization. While dominating a vast portion of the South American continent, the Empire’s location and people were also enormous (Fukuyama 24). The abundance of precious metals mined in Peru—including gold and silver—led to a flourishing economy.
Its influence was not limited to the realm of economics. Colonial authorities restricted access to education to their elite subjects. Even more so, the Spanish, with their descendant successors, began to monopolize authority over the area, taking much of the best lands after the native population declined (Bajak 4). Enslaved people from other African colonies were recruited to the region when it was determined that the local workforce was insufficient to operate the mines. For several weeks at a time, for instance, only candlelight was available to the miners as they extracted mercury, which can be fatal. When the Spanish conquered Peru, they began mining its abundant gold and silver reserves. In addition, the silver mines of Photos were the engine that drove this economy, with Lima serving as its nerve center (Przeworski 12). Lima, the newly founded capital of the viceroyalty of Peru, sprang into prominence as South America’s most important commercial hub after the discovery of silver in Peru.
Resource Curse
The prosperity of developing countries relies heavily on their natural resources. On the other hand, that is simply the people’s potential riches. There is evidence that places in the world where extractive industries are a country’s primary source of income also have slower economic growth and more excellent poverty rates than other regions (Levitsky 20). The term “resource curse” is used to describe this situation. The “resource curse” is commonly associated with increased military expenditure and the escalation of conflicts, even civil war (Oxford Analytica 3). Corruption, authoritarian tendencies in governance, incompetent government, and breaches of individual and social liberties are also factors in Latin America.
Colombia
Although Colombia is rich in oil, coal, precious metals, and minerals, much of its civil strife, human rights abuses, and corrupt practices may be traced back to its reliance on limited land. Among the best instances of a country whose history has prevented it from achieving political, social, and economic development is Colombia (Coates 1). In 2001, the World Bank found that the Gini coefficient for land inequality in Colombia was 0.8, making it the tenth most unequal country in the world. However, this figure is likely much higher today. Accordingly, it should be no surprise that Colombia’s land reform initiatives have met with little success (Vanden 5). Land, not oil, coal, precious metals, or minerals, is the root cause of many of Colombia’s issues.
Inequalities in land ownership and other forms of oppression sparked the civil war in Colombia. The Marxist-Leninist ideology of the FARC strongly emphasizes the need for agrarian reform (Coates 1). The problems that initially gave rise to this terrorist organization have become even more intractable due to their conduct (Fukuyama 24). In addition, the paramilitary organizations or private armies founded in the 1980s by business people and landowners did not limit themselves to protecting their customers’ property.
Peru
Over the past decade, Peru has profited from a resurgence in mining investment across Latin America, which has seen a surge in activity thanks to the favorable circumstances granted by governments to international corporations. From 1990 to 2006, the mining industry attracted $2,882,000,000 in direct investment (18.66%) (McClintock 19). The enormous mining industry has been modernized thanks to the influx of fresh finance (Przeworski 12). On the one hand, mining already mined ores has been expanded, while older, dirtier machinery has been replaced with newer, more environmentally friendly machinery. Amazonian history, water peaks, and fishing. The extraction and sale of natural resources is a significant industry in Peru. That is why it is crucial to practice sustainable fishing and logging in the Pacific and the Amazon Rainforest, respectively.
Conclusion
In studies of Latin America’s development toward modernity, the connection between Europe and Latin America served as the vital variable during and after colonialism as an explanatory variable. It is generally acknowledged that colonialism weakened the area economically and politically by fostering reliance, debt, and vulnerability. This is because colonialism created these conditions. Marxist literature has a few of the most compelling and convincing reasons that can be discovered to support this viewpoint. The limited capitalist growth and economic accumulation in Europe and Spain contributed to the perception that the Spanish colonial expansion into Latin America resulted from these two factors.
Works Cited
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