Question

With respect to economic factors in Latin America, describe export dependence, import substitution, debt crises, and the impact of free trade agreements such as NAFTA.

Answer 1

Export dependence means an export-oriented country which is mostly developing and smaller nations like Latin America which depend on the export of primary products.

Import substitution is the process of replacing foreign goods with domestically produced goods in order to truncate dependence on imports and increase self-sufficiency. It was adopted by Latin America from the 1930s to 1960s.

Debt crises in Latin America was a financial crisis which occurred in the 1980s when borrowing from international markets are higher than the GDP or output of the economy especially during the process of industrialization. It leads to slow growth, unemployment etc.

Impact of free trade agreements in countries like Latin America which depends majorly on these trade agreements via pursuing regional economic integration as an aid for a commitment of a single market as they face obstacles even after trade barriers are removed in the process of liberalization.