Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Dedication
- Preface
- List of acronyms
- Table of official exchange rate parities to US dollar
- Map: Central America
- 1 A century of independence: foundations of export-led growth
- 2 Central America in the 1920s: reform and consolidation
- 3 The 1929 depression
- 4 Economic recovery and political reaction in the 1930s
- 5 Central America and the Second World War
- 6 Post-war economic recovery
- 7 The struggle for democracy, the Cold War and the Labour movement in the first post-war decade
- 8 The foundations of modern export-led growth, 1954–60
- 9 The illusion of a golden age, 1960–70
- 10 External shocks and the challenge to the social order, 1970–9
- 11 The descent into regional crisis
- 12 Conclusions
- Methodological Appendix
- Statistical Appendix
- Notes
- Bibliography
- Index
- CAMBRIDGE LATIN AMERICAN STUDIES
10 - External shocks and the challenge to the social order, 1970–9
Published online by Cambridge University Press: 03 February 2010
- Frontmatter
- Contents
- List of figures
- List of tables
- Dedication
- Preface
- List of acronyms
- Table of official exchange rate parities to US dollar
- Map: Central America
- 1 A century of independence: foundations of export-led growth
- 2 Central America in the 1920s: reform and consolidation
- 3 The 1929 depression
- 4 Economic recovery and political reaction in the 1930s
- 5 Central America and the Second World War
- 6 Post-war economic recovery
- 7 The struggle for democracy, the Cold War and the Labour movement in the first post-war decade
- 8 The foundations of modern export-led growth, 1954–60
- 9 The illusion of a golden age, 1960–70
- 10 External shocks and the challenge to the social order, 1970–9
- 11 The descent into regional crisis
- 12 Conclusions
- Methodological Appendix
- Statistical Appendix
- Notes
- Bibliography
- Index
- CAMBRIDGE LATIN AMERICAN STUDIES
Summary
The beginning of the 1970s coincided with a series of external shocks to Central America, not all of which were unfavourable; world commodity prices rose, increasing profitability in export agriculture (EXA), while the availability of new technologies (the Green Revolution) encouraged some large-scale farmers to try their hand at producing crops for the home market. The result was a squeeze on small-scale farmers and an acceleration of the marginalisation of the peasantry.
The decline of the CACM at the end of the 1960s proved irreversible despite the best efforts of the technocrats, and new industrial strategies began to emerge involving a partnership between the state and the private sector. At the same time, industry became subject to a profit squeeze, as the cost of inputs (mainly determined by world prices) rose faster than output prices. Industrial production began to be concentrated in large units, as firms looked to cut costs, and the artisan sector suffered a severe squeeze. Thus, in both agriculture and industry the shift towards proletarianisation of the labour force accelerated.
The squeeze on industrial profits was caused fundamentally by the sharp rise in world prices in the early 1970s, further aggravated by the oil crisis in 1973–4. Central American republics, among the most ‘open’ economies in the world, found themselves importing inflation, which reached levels unheard of for over two decades.
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- Information
- The Political Economy of Central America since 1920 , pp. 200 - 229Publisher: Cambridge University PressPrint publication year: 1987