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Why and how are Latin businesses changing
- globalization, privatization, technology change: more competitive pressures
- more latin co's being changed by young managers: intoduce new tech, slimming down the corp, internationalizing their business
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Import substitution industrialization
- making products for yourself rather than importing them
- good: faster industrial growth
- bad: bigger budget deficits and trade deficits
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Causes of 1980's international debt crisis
- couldn't repay debt on time
- borrowed too much $
- Fed's actions + floating interest rates on LA loans: US raised interest rates to fight inflation, raising rates in LA on new/existing loans
- US recession: US was suffering and no longer buying as many of LA's exports
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What reforms have been occuring
- more free trade: LA gov'ts signed free trade agreements with US and eachother
- more DFI: reduced DFI restrictions to bring in new $, ideas, and tech
- privatization: many SOE's were sold off, couldn't rely on gov't to always rescue them
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