For questions 1, 2, 3, and 6 you are welcome to use Wikipedia. However, you shou

Question

For questions 1, 2, 3, and 6 you are welcome to use Wikipedia. However, you should cite at least two other sources in each question. Your sources should be identified at the end of each answer. As you can see by now many of the assignments are very important to our understanding of the topics, but they have not been integrated as well into the course as I would like. This assignment is very different. Much of the discussion here is to better understand Latin America, a region of the world that we will need to skip because of time constraints. Some of you will be writing a country report about one that uses ISI. Some of this information may be useful to include in your report. Other sources you could consult are in the reference section of the library or you can ask a librarian for help. 1. What is Import Substitution Industrialization? (between 200-400 words) 2. Raul Prebisch was one of the prominent proponents of ISI, write a short biography of him (between 200-400 words) 3. Explain why Prebisch and others proposed ISI (up to 250 words). 4. Visit the site EconoMonitor and once there search for the article “On Populism in Argentina (and other Latin American Countries)” by Nicholas Magud published June 25th, 2008. Summarize it. 5. Brazil, Argentina, Peru, Mexico, and Bolivia among many countries followed both ISI and Economic populism. Visit the IMF site at www.imf.org and click on Data and Statistics, then click on World Economic Outlook Databases, select the October 2014 database,and select By Countries, next Latin America and the Caribbean. Find inflation in percent change for Argentina, since 1980 to date and graph the data in several sub-periods so it can show the different inflation rates better. In a couple paragraphs describe what you see. 6. Brazil, Chile, Peru, Bolivia, Argentina, and India followed ISI and different levels of Economic Populism, choose one of these five countries and explain when your selected country followed ISI and when it stopped following ISI? Why did your country stop using ISI? What were the consequences of ISI and Economic Populism in your country? (no less than 250 words and up to 700 words)

Explanation / Answer

Ans. 1 (What is Import Substitution Industrialization?)

Import substitution industrialization (ISI) is a trade and economic policy which advocates replacing foreign imports with domestic production. ISI is based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products. The term primarily refers to 20th-century development economics policies, although it has been advocated since the 18th century by economists such as Friedrich and Alexander Hamilton.

ISI policies were enacted by countries in the Global South with the intention of producing development and self-sufficiency through the creation of an internal market. ISI works by having the state lead economic development through nationalization, subsidization of vital industries (including agriculture, power generation, etc.), increased taxation, and highly protectionist trade policies. Import substitution industrialization was gradually abandoned by developing countries in the 1980s and 1990s due to the insistence of the IMF and World Bank on their structural adjustment programs of global market-driven liberalization aimed at the Global South.

In the context of Latin American development, the term "Latin American structuralism" refers to the era of import substitution industrialization in many Latin American countries from the 1950s until the 1980s. The theories behind Latin American structuralism and ISI were organized in the works of Raúl Prebisch, Hans Singer, Celso Furtado, and other structural economicthinkers, and gained prominence with the creation of the United Nations Economic Commission for Latin America and the Caribbean (UNECLAC or CEPAL). While the theorists behind ISI or Latin American structuralism were not homogeneous and did not belong to one particular school of economic thought, ISI and Latin American structuralism and the theorists who developed its economic framework shared a basic common belief in a state-directed, centrally planned form of economic development. In promoting state-induced industrialization through governmental spending through the infant industry argument, ISI and Latin American structuralist approaches to development are largely influenced by a wide range of Keynesian, communitarian, and socialist economic thought. ISI is often associated and linked with dependency theory, although the latter has traditionally adopted a much broader Marxist sociological framework in addressing what are perceived to be the origins of underdevelopment through the historical effects of colonialism,Eurocentrism, and neoliberalism.

Source: Investopedia: The import substitution industrialization (ISI) is an economic theory employed by developing or emerging market nations that wish to increase their self-sufficiency and decrease their dependency on developed countries. Implementation of the theory focuses on protection andincubation of domestic infant industries so they may emerge to compete with imported goods and make the local economy more self-sufficient.

Ans. 2

Biography of Raul Prebisch

Raúl Prebisch was an Argentine economist known for his contributions to structuralist economics such as the Prebisch–Singer hypothesis, which formed the basis of economic dependency theory. He is sometimes considered a Neo-Marxist economist.

Born: April 17, 1901, San Miguel de Tucumán, Argentina

Died: April 29, 1986, Santiago, Chile

Education: University of Buenos Aires

Books: Cepal Review, more

Awards: Jawaharlal Nehru Award for International Understanding

Between 1964 and 1969 he served as the founding secretary-general of the United Nations Conference on Trade and Development (UNCTAD).

During the 1960s, economists at ECLA developed an extension of Prebisch's thoughts on structuralism into dependency theory, in which economic development of the periphery is seen as a nearly impossible task. While dependency theory was the polar opposite of Prebisch and the ECLAC's original purpose, he continued to criticize the neo-classical economic forces that he felt were victimizing the global poor. Selected for his unparalleled reputation, he tried to forge UNCTAD into a body advocating the case of the whole developing world. His approach to development took a more trade-focused approach, advocating preferential access to the markets of developed countries and regional integration – building up trade between peripheral countries. Increasingly he stressed the extent to which developing countries had to bring growth through internal reforms, rather than through external help. He publicly condemned ISI as having failed to bring proper development. Prebisch found years at UNCTAD frustrating and "sterile", as it became increasingly bureaucratic and failed at its main objectives. His sudden resignation in 1969 signified his lack of patience with the organisation's failures.

Source: http://www.cepal.org/:

From 1930 to 1943 he worked as a public servant, in the Banco Nación and then the Ministry of Finance. In 1935 he was one of the founders and first Governor of the Central Bank of Argentina, a post he held until 1943.

From May 1950 to July 1963 Mr. Prebisch was Executive Secretary of the United Nation's Economic Commission for Latin America and the Caribbean (ECLAC). Later he became Secretary-General of the United Nations Conference on Trade and Development (UNCTAD). In 1984 he returned to Argentina to work with the democratic government that took over in 1983.

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