Latin America & the Depression

1. Latin America & the Depression

2. Latin America & the Depression Argentina & the Concordancia Radical politician Yrigoyen dominated the period preceding the Depression (1916-30) Gained widespread support from labor and universal suffrage (not incl. women) Economy expanded due to WW1 neutrality & expanding exports Encouraged energy independence However… he did not respond well to the Depression and drop in exports!

3. Latin America & the Depression • Declared president, Jose Uriburu, began a fascist-style government that controlled politics through 4 separate presidencies (i.e. Uriburu, Agustín Justo, Roberto Ortiz & Ramón Castillo) until the Revolution of 1943. • Through repression, the gov’t returns power to the wealthy elite, known as the Concordancia. Argentina & the Concordancia On Sept 6, 1930 a coup d’etatended 68 years of constitutional rule and ushered is the “Infamous Decade” until June ‘43

4. Latin America & the Depression Argentina & the Concordancia GDP dropped by 25% between 1929-32 Abandons free trade and directly intervenes in economic matters: Public works projects Est. of Central Bank Supported labor movement • Because Latin American economies depended on the export of primary resources and the import of industrial, manufactured goods, they were crippled by the high protectionist tariffs following the domino effect brought on by Smoot-Hawley.

5. Latin America & the Depression Argentina & the Concordancia Foreign investment is sought to aid in internal industrialization. The US is willing to oblige, as tariffs made trade less profitable, and accounts for 50% of total capital investment. In response, Argentina begins Import Substitution Industrialization (ISI) Discouraging the import of consumer goods Locally/Regionally sourcing the goods needed to industrialize Securing necessary bilateral trade agreements with countries positioned to supply them with necessary capital.

6. Latin America & the Depression Argentina & the Concordancia Controversial to Argentines, the Roca-Runciman Treaty of 1933 guaranteed Argentina that Britain would continue to import its beef at a depressed 1932 quota in exchange for… exempting Britain from Argentine protectionist tariffs giving Britain preferential foreign investment protection committing the deposit of Argentine surpluses in the Bank of England

7. Latin America & the Depression

8. Latin America & the Depression • During past crises, the coffee planters had relied on a valorization program (i.e. a government price support program). However, the government collapsed and with it the valorization program. Brazil & the Getúlio Vargas With its heavy dependence on the export of coffee, the stock market crash sent coffee prices into a free fall.Between 1929 and 1931, the price dropped 65%. • A 1930 Brazilian Revolution ends the presidency of Washington Luís, the end of the Old Republic & the end of Constitution of 1891.

9. Latin America & the Depression Brazil & the Getúlio Vargas The provisional government appoints Getúlio Vargas as president from 1930-34. Using “New Deal” like government economic measures, he worked to re-build the valorization program and get the coffee industry back on its feet. Limiting plantings and supply Buying up surplus stocks Destroying excess coffee Though coffee did not rebound until the 40’s, other agricultural sectors did (e.g. cotton)

10. Latin America & the Depression Brazil & the Getúlio Vargas The new Constitution is adopted in 1934 and Vargas is elected president of the country. In a marked shift from the left leaning social reformist approach that characterized his first 4 years in office, Vargas employs fascist-styled repressive policies that favored the coffee oligarchs. Forced industrial growth (justified by nationalism) Repression of labor Industrial production doubled between 1931 & 1936 and national income rose due to ISI.

11. Latin America & the Depression Brazil & the Getúlio Vargas In 1937, Vargas initiates a coup d’etatand assumes dictatorial powers until 1946. Favored economic nationalism and called for a “New State” Created a Five-Year Plan in 1940 to expand heavy industry and the railroad system.