Transcript ch04_b
MIDDLE AMERICA II (CHAPTER 4: 216-235) Natural Resources MAQUILADORAS Tijuana Nogales Ciudad Juarez Chihuahua Monterrey Reynosa Matamoros GDP PER CAPITA ALONG THE US-MEXICAN BORDER MAQUILADORAS • Initiated in the 1960s as coupon houses • Assembly plants that pioneered the migration of industries in the 1970s • Today – >4,000 maquiladoras – >1 million employees MAQUILADORAS • Modern industrial plants • Assemble imported, duty-free components/raw materials • Export the finished products • Mostly foreign-owned (U.S., Japan) • 80% of goods reexported to U.S. • Tariffs limited to value added during assembly MAQUILADORAS • Maquiladora products • • • • • Electronic equipment Electric appliances Auto parts Clothing Furniture MAQUILADORAS • ADVANTAGES – Mexico gains jobs. – Foreign owners benefit from cheaper labor costs. • EFFECTS – Regional development – Development of an international growth corridor between Monterrey and Dallas - Fort Worth NAFTA • Effective 1 January 1994 • Established a trade agreement between Mexico, Canada and the US, which: –Reduced and regulated trade tariffs, barriers, and quotas between members –Standardized finance & service exchanges NAFTA How has Mexico benefited from NAFTA? MEXICO AND NAFTA • Foremost, it promises a higher standard of living. • NAFTA creates more jobs for Mexicans as US companies begin to invest more heavily in the Mexican market. • Mexican exporters increase their sales to the US and Canada. • Is that the entire story? WAGE RATES COMPARED $20.21 $25 $20 $17.38 $15 Mexico U.S. $10 $1.55 $2.87 $5 $0 Assemblers Skilled Labor U.S. TRADE WITH CANADA & MEXICO • Canada remains as the United States’ largest export market. • Since 1977, Mexico has moved into second place (displacing Japan). • 85% of all Mexican exports now go to the United States. • 75% of Mexico’s imports originate in the United States. ECONOMIC TRENDS (Central America & the Caribbean) • Agriculture • Industry • Services – Tourism • Environmental Issues – Deforestation POST COLONIAL DEPENDENCY • Neocolonialism –Policies of developed states that enable them to dominate economies of former colonies • Disjunctive Development • Investments • Loans PRIMARY SECTOR DEPENDENCE • El Salvador – Agriculture accounts for 24% of GDP and 40% of the labor force and contributes to 60% of exports. – Economic losses because of guerrilla sabotage total $2 billion since 1979. • Honduras – Agriculture accounts for more than 25% of GDP, employs 62% of the labor force, and produces two-thirds of exports. – Economic loss because of natural disaster PRIMARY SECTOR DEPENDENCE • Dominican Republic (49% Agriculture) – Sugarcane, coffee, cotton, cocoa, and tobacco • Jamaica (22.5% Agriculture) – Sugar, bananas, and rum (Hurricane Gilbert -1988) • Cuba (20% Agriculture) – Sugar, tobacco, citrus, and coffee ALTITUDINAL ZONATION Middle & South America’s Vertical Climate Zones ALTITUDINAL ZONATION Middle & South America’s Vertical Climate Zones TIERRA CALIENTE (Hot Land) Bananas, Cocoa, Sugar, Rice 2500’ Sea Level 750 m Sea Level ALTITUDINAL ZONATION TIERRA TEMPLADA (Temperate Land) Coffee, Rice, Corn, Sugar 6,000’ 2000’ Sea Level 1800 m 600 m Sea Level ALTITUDINAL ZONATION TIERRA FRIA (Cold Land) Corn, Wheat, Potato 12,000’ 6,000’ 2000’ Sea Level 3,600 m 2,000 m 600 m Sea Level ALTITUDINAL ZONATION Middle & South America’s Vertical Climate Zones TIERRA HELADA (Frost Land) 12,000’ 6,000’ 2000’ Sea Level 3,600 m 2,000 m 600 m Sea Level THE TOURISM OPTION • Antigua and Barbuda – Direct contribution of 13% to GDP and affects growth in other sectors • The Bahamas – Tourism alone provides 50% of GDP and directly or indirectly employs 40% of the population. • Cuba – Growing industry ENVIRONMENTAL CONCERNS • Tropical Deforestation • 3.5 million acres of woodland in Central America disappear each year! What are the causes of tropical deforestation? CAUSES OF TROPICAL DEFORESTATION • Clearing of rural lands to accommodate meat production and export • Rapid logging of tropical woodlands to meet global demands for new housing, paper, and furniture • Population explosion: forests are cut to provide cropraising space and firewood THE PUERTO RICAN MODEL • One of the most dynamic economies in the Caribbean region • Industry has surpassed agriculture as the dominant sector of economic activity. • Encouraged by duty free access to the US by tax incentives (US firms have heavily invested in Puerto Rico since the 1950s) MIDDLE AMERICA II (CHAPTER 4: 216-235)