Dependence affecting certain countries in Latin America and the Caribbean is a result of a very particular historical evolution. It is extremely interesting that some countries Latin America and the Caribbean are in a situation of economic dependence, despite having large reserves of natural resources such as hydrocarbons and minerals. And this rich subsoil was very important because even in the modern age.

The origins of economic dependence on the period of colonization:

Indeed, the mineral wealth of what is now known as Latin America already had a lot of weight during the conquest and colonization of the continent, a paradigmatic example of the silver mines of Potosi in Argentina, whose name also refers to its mineral wealth, as “Argentina” comes from the Latin word “Argentium”Meaning” silver. “In the update, in Latin America there are countries with large reserves of hydrocarbons, such as Venezuela or Bolivia.

However, despite the wealth of the subsoil of Latin America, the continent still some countries are in a state of dependence, in part by an economy that comes directly from that developed during the colonial era. During this stage, the American economy was based mainly on the primary sector, with large export-oriented plantations, large farms producing meat and also for export, and also a major mining development.

However, we sought to develop the American industry, to ensure that the industry could compete with the underground, maintaining a situation in which America was both a producer of raw materials and markets for products manufactured in the metropolis.

The economic dependence of political independence after:

However, after independence, the situation was, because the power came to be owned, in many cases, large landowners, who did nothing to change things because the system allowed to obtain huge profits from the export their products. From all this there was a double consequence. First, that continued industrial development by avoiding to give priority to export mining products, agricultural and livestock production within a model known as the primary model and exporter.

Second, that because the American economy focused on the export of such products is dependent on the prices that they reach in international markets. Furthermore, as is often the yields are based on monoculture, the falling price of a single product could destabilize the economy of an entire country.

All this came on top of the fact that often the governments established agreements with foreign companies like United Fruit Company, to assist in the exploitation of agricultural products, leading to cases in which these companies end up controlling the power in these countries, because investments or bribes entrepreneurs put their favor to the rulers. Then came what has been called “banana republics”.

The external debt and its relationship to economic dependence:

Currently, foreign debt also helps to explain this dependence. The debt arises when Third World countries (in this case, countries Latin America and the Caribbean) are financial aid countries in the first either to improve their infrastructure or to invest in other improvements, or to solve a crisis or catastrophe.

Thus, they undertake to repay the aid, but due to the weakness of their economies, can not, should seek new loans to pay previous attempt, and so the debt is growing and feeding back to the point that there countries, like Haiti, which were never paying them back.

And though it may seem paradoxical, another cause for the economic dependence Latin America itself is derived from the natural wealth of these countries. Due to the lack of investment in industrial development, companies from countries like Venezuela or Bolivia can not exploit their resources (oil, gas), and should be foreign companies that do so.

This makes the external debt continues to grow, and also makes the benefits of exploitation are to those foreign countries and the countries that possess natural resources. Related to this are the decisions taken by the governments of Hugo Chavez in Venezuela and Evo Morales Bolivia nationalize the exploitation of these resources, precisely to avoid external dependencies.

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