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A Comparative Analysis of Integration Efforts in Europe and South America
Unformatted Document Text:  Brian Hardt after the dissolution of Gran Colombia, there was no serious call or attempt to integrate. The political and economic infrastructures were still being fought over by various caudillos and the hierarchical elite while various disputes arose among states when they tried to firmly establish borders and territories. The idea of integration seemed to dissolve with Gran Colombia. Serious attempts at South American integration would not happen for over a century (Blake, 2005) (Wiarda, 2007) (Provost, 2006). Many of the former colonies suffered a period of economic stagnation until around the 1870’s when economic growth based on the export of primary goods in the form of raw materials started to stimulate the domestic economies. The global need for these materials was caused by the beginning of the Industrial Revolution in the European states. Even with a lack of political leadership, the export sector based on primary goods continued to perform well going into the 20 th century. Since these domestic economies were structured around export driven growth of raw materials, it meant that they were reliant on the continued industrial growth in developed countries which made the South American economies vulnerable to fluctuations in the world market. (Furtado, 1976) (Wiarda, 2007) The export based economic order was greatly affected by the world wide depression that hit the world market in 1929. No nation was able to escape the consequences of the depression. Between the years of 1929-1930, there was over a 50% drop in the value of world trade (Furtado, 1976). As the production in the developed nations quickly fell, so did their imports of primary goods. Technology advanced with the creation of synthetics and chemicals which further reduced the need for industrial countries to import raw materials. It was then obvious that the economic system of South America needed to change. Many countries turned to the Import Substitution Industrialization (ISI) economic system. This economic system encouraged state sponsored growth in manufacturing capabilities and protectionists measures in the form of trade barriers to reduce the import coefficient. During the beginning period of ISI, there were no attempts to induce regional cooperation as focus was placed on building domestic production capabilities and supplying the domestic market. The bulk of South America’s imports before the adoption of ISI were manufactured goods. To reduce the number of these imports, South America needed to boost its manufacturing capabilities. This would require sustained economic growth with a larger augmentation in the manufacturing sector. This led to an 7

Authors: Hardt, Brian.
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Brian Hardt
after the dissolution of Gran Colombia, there was no serious call or attempt to integrate. The political and
economic infrastructures were still being fought over by various caudillos and the hierarchical elite while various
disputes arose among states when they tried to firmly establish borders and territories. The idea of integration
seemed to dissolve with Gran Colombia. Serious attempts at South American integration would not happen for
over a century (Blake, 2005) (Wiarda, 2007) (Provost, 2006).
Many of the former colonies suffered a period of economic stagnation until around the 1870’s when
economic growth based on the export of primary goods in the form of raw materials started to stimulate the
domestic economies. The global need for these materials was caused by the beginning of the Industrial
Revolution in the European states. Even with a lack of political leadership, the export sector based on primary
goods continued to perform well going into the 20
th
century. Since these domestic economies were structured
around export driven growth of raw materials, it meant that they were reliant on the continued industrial growth in
developed countries which made the South American economies vulnerable to fluctuations in the world market.
(Furtado, 1976) (Wiarda, 2007)
The export based economic order was greatly affected by the world wide depression that hit the world
market in 1929. No nation was able to escape the consequences of the depression. Between the years of
1929-1930, there was over a 50% drop in the value of world trade (Furtado, 1976). As the production in the
developed nations quickly fell, so did their imports of primary goods. Technology advanced with the creation of
synthetics and chemicals which further reduced the need for industrial countries to import raw materials. It was
then obvious that the economic system of South America needed to change.
Many countries turned to the Import Substitution Industrialization (ISI) economic system. This economic
system encouraged state sponsored growth in manufacturing capabilities and protectionists measures in the form
of trade barriers to reduce the import coefficient. During the beginning period of ISI, there were no attempts to
induce regional cooperation as focus was placed on building domestic production capabilities and supplying the
domestic market. The bulk of South America’s imports before the adoption of ISI were manufactured goods. To
reduce the number of these imports, South America needed to boost its manufacturing capabilities. This would
require sustained economic growth with a larger augmentation in the manufacturing sector. This led to an
7


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