Latin America and East Asia:
A comparison of their Politcal Economies

In this essay we shall be comparing and contrasting the regions of Latin America, the nations of North and South America where the romance languages are spoken south of the USA, and East Asia, defined here as the Asean + 3. In comparing and contrasting these two regions we will identify the main features of their respective political economies. By examining each region separately we shall look at the historical development of both regions, starting with their first contact with the European powers through the cold war up to the contemporary setting. In the case of Latin America this shall focus on the battle between the forces of first colonialism then neo-liberalism versus various social movements, from Bolivar to Chavez, that have emerged over the last two centuries. While in the case of East Asia we shall begin with the colonial experience and the ensuing fragmentation of its the sinocentric system, continuing through the cold war to the contemporary environment where new shared experiences have fostered a new regional agenda.
Latin America, a highly civilized region at the time, first came into contact with the European powers in the late15th century with the discovery by Columbus, for the Spanish crown, of the West Indies. Within a short time most of Latin America was under the control of the Spanish, with Portugal taking Brazil. (Calvert 1994:8) This state of affairs stayed fairly constant till the beginning of the 19th century when upheaval and change in Europe started to have a profound effect on the region. Industrialisation on the European continent was progressing strongly putting the Spanish and Portuguese feudal systems at a great disadvantage that culminated in Napoleon invading both. This forced the colonies in Latin America to defend themselves and this fostered the beginnings of an independence movement, led by Simon Bolivar influenced by the example of the French and American revolutions (Ali 2008:149), in the region.(1994:8) Over the next century we gradually saw Spain and Portugal lose control over the region while local interests gained legitimacy and power. There was conflict over borders but the great distances and lack of military strength kept war to a minimum in all but two cases.(1994:9) While the presence of Britain, whose agenda was initially formulated to stop any coalition forming that would become involved in the Napoleonic Wars but one that would gradually evolve to matters of trade, prevented Spain retaking its lost holdings. By the beginning of the 20th century and following defeat by the US, in the Spanish-American War, the influence of Spain on the continent, as colonial master, had been eradicated from the region.

Yet while Latin America had broken from the yoke of colonisation early in the 19th century it remained essentially, in Lenin's words, a 'semi-colony' till WW II for a host of reasons. The fact was that Spain and Portugal may have been forced out but Western interests remained, draining the region of its resources while stunting internal development in favour of the export sector. (Hoogvelt: 2001:242) Nevertheless with the onset of the Great Depression and global war the region was forced to remodel its economy around import substitution industrialisation (ISI) policies so as to replace the Western goods they had become dependent on.(2001:242) Concurrently we saw, as Sader (2008:4) notes, the first of three cycles of leftist strategies in this region.

In effect an alliance between the left and business elites came to pass, as Sader (2008:4) concludes, ''...in the name of economic modernization, agrarian reform and a certain autonomy with respect to northern imperialism.'' Dependency theory analysts have argued that the ISI model had in fact deepened the regions dependency on the West as it pushed domestic industries into producing goods aimed at the elites facilitating further dependence on foreign goods. (2001:244) As a consequence this model started to fail sending the business elites into an alliance with international capital, that laid the groundwork for future neo-liberal polices.(2008:4) Further to this, as Hoogvelt (2001:244) notes, the new middle and working classes, that had emerged in response to industrialisation and modernization, where seeing their calls for social justice ignored. In fact this movement caused the elites, co-opting the developing middle classes with them, to see authoritarian governments as the answer to the financial and social unrest that was fermenting as it would allow the stability required for economic growth.(2001:245) Despite this, or rather because of this, the Cuban revolution would usher in the second strategy of the left. (2008:4)

The Cuban revolution had a marked effect on the region. While the military juntas engaged in oppressive economic and social policies in the pursuit of economic growth the example of Cuba reinvigorated a demoralised left. Cuba's levels of development where similar to the rest of the region hence it provided an example of what could be achieved leading to an increase in rural and urban guerilla movements over the next 30 or so years.(2008:4) While there where some successes, the Sandinistas in Nicaragua being one example, by the end of the cold war we saw a ''... shift to a unipolar world under the imperial hegemony of the US which put an end to the viability of guerilla strategies'' (2008:4)

Meanwhile, as Phillips (2000:284) argues, by the early 90s the ''...inward looking...'' development model had been damaged beyond repair leading to the appropriation of the neo-liberal model across the majority of the region. One of the main tenements of this model was that to attain the necessary economic and political reforms the state sector would have to relinquish its role as regulator (2000:284) Nevertheless by the mid 90s we started to see this model fall apart. Hyperinflation across the region had been brought under control, but this had been done while economic growth stagnated, deficits increased, social inequalities increased and the region as a whole came under increased pressure from global financial speculation and as a result the governments that had been responsible for the neo libel reforms started to fall.(2008:2) As a direct response to neo-liberalism we have saw the left once again resurrected. This revitalisation of the left though is different to the movements we saw during the cold war and is, as Sader (2008:5) notes, the third cycle of leftist strategy.


This third strategy has, in Sader's (2008:5) words, ''...propelled social movements into the forefront of the resistance to neo-liberalism...'' These movements have for the first time come from below and rallied against the privatisation of the health, education and utility sectors. They have also stood up to Nafta and taken down three administrations in Ecuador. In effect what we have seen is popular movements within nations coming together in response to the crisis of the neo liberal model. A response Sader (2008:5) calls ''state versus civil society.'' Though as the movement has evolved we have seen representatives emerge, Morales in Peru, Chavez in Venezuela and Correa in Ecuador, that have moved into the political sphere creating a new alignment of left leaning states that is coming into the ascendancy while isolating the last vestiges of neo-liberalism in the region.

In contrast let us look at the development of East Asia. Before the 19th century East Asia was a highly civilized society based around, as Pempel notes, (2005:6) a sinocentric system that adhered to cultural exchange and tributary linking the region together as one. Nevertheless by the middle of the 19th century this would change as a whole host of Western nations consolidated their power through military conquest and split up East Asia, though Japan and Thailand managed to escape coming under the colonial yoke, and in the process we saw the erosion of the nexus that had existed. (2005:7) In addition, this multiplicity of powers in the region left it with a wide range of experiences, cultures, languages and religions of the not just the colonisers but the indigenous population too. East Asia's colonial experience had left the region very fragmented and the one attempt of integration during this period, by Japan (2005:7), had the effect of contributing to the fragmentation process in post WW II environment.

Moving on to the post-war period Pempel (2005:7) concludes that fragmentation was still a decisive factor, driven now by decolonisation and the cold war. With decolonisation we saw the newly sovereign states focus on domestic development while defending against the perceived threats of the old colonial masters, neighbours and regional or global hegemons which had the effect of halting any attempts to at bring the region together. While the cold war cleavage also kept this trend of fragmentation going. In effect we saw most nations either align with the USA or with the USSR, though there was a few nations, like Indonesia, that became part of the non-aligned movement further augmenting fragmentation.(2005:8) Concurrently, as Pempel (2005:8) notes, a situation that initially developed primarily on security issues would have far reaching effects on the economic sphere.

As the cold war heated up in the Asian theatre, with the onset of the Korean War and communist success in China, the US concluded that it should prevent its allies, primarily Japan, trading with the enemy, China. The fear within the US was that trading between the two nations would see Japan fall under the influence of communism.(2005:8) As a result the US designed a strategy that would act as a bulwark against communism (2001:224) by opening up its market to Japanese goods while encouraging its newly designed economic instruments, the World Bank and its ilk, to lend to it so that they could, as Pempel (2005:8) notes, become ''...the workshop of Asia.'' This strategy came to be known as export oriented industrialisation (EOI) and it would be rolled out to the other countries that came into the American ideological bloc.(2005:8) Nevertheless we still did not see much integration in the region as most nations embarked on a round on of, what neoclassical writers (2001:219) called, 'state capitalism' that saw policies enacted that manipulated the market towards their own national agendas while eschewing regional links for the bi-laterall arrangements they had with the US, but this would change in the 1970s.

There where a number of factors at work here according to Pempel.(2005:9&10) First the success of Japan started to shift its role in the region. It began to make amends for its war indiscretions by paying war reparations and establishing regional links with aid packages. Second, China started to emerge as a power in own right, opening its economy to the rest of the world and as a result we saw a cooling of the cold war tensions and finally, overcoming the early tensions of the post-colonial period ASEAN was formed. All of these events helped to ease tensions but a few obstacles still stood in the way, both relating to the US.

First due to the bi-lateral agreements that the US had with several states over security issues integration could not be achieved at this point. This situation changes by the early 90s and as Fawcett (Besson 2007:4) points out with the end of the cold war we saw the removal of the ideological divide that split the region and a ''...decentralisation of the international system...'' that has seen security and economic institutions take on a greater role at the regional level. Secondly, and relating to the economic sphere, most nations where tied into the US sphere through the EOI strategies but this started to change in the 80s when in response to the weakening of its own industries America evoked a raft of protectionist measures against Asian countries. (2005:9) This obviously weakened the ''pan-pacific ties'' (2005:10) but also forced the East Asian countries to reform their economies that left them open to the crash of 97 (2001:227) an event that has seen, according to Ravenhill (2002:2), the ASEAN+3 form. This facilitated collaboration on a scale not seen in the region before as the nations of East Asia reformed to meet the demands of the world.

In conclusion we can see that since colonial time these two regions have had vastly different experiences. For Latin America colonisation wiped out its cultural heritage but through a shared experience it fostered the creation of a pan-regional identity that has continued through today and has helped foster some of the most progressive social movements found anywhere in the world even when faced with highly oppressive regimes allied with global interests that have consistently put profit before civil society. While in East Asia its multipolar colonial experience destroyed the previous sinocentric order, leaving behind a whole host of diverse interests that at first proofed to be insurmountable to challenges of regionalism. Nevertheless since the end of WW II the shared experiences of this region have seen it come together in way that would have been impossible to imagine just a couple of decades ago and may possibly lead to the re-establishment of its long lost sinocentric order in the future.

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