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Democracy in crisis, USAID: Foreign aid program created in the Kennedy…
Democracy in crisis
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political reasons
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the expansion of urbanisation and industrialisation created large and increasingly powerful classes of workers, industrialists, the middle classes and the urban poor
in mexico and brazil these classes were a political resource used by populist leaders and politicians in general
controlling labour organisations and their votes were vital in politics throughout latin america in 1950s and 1960s
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economic reasons
in the post-war period Import Substitution Industrialisation (ISI) was successful and brought an expansion of industry improvements in employment and real wages as well as transfer of technology into the region
In Mexico and Argentina industrialists were not related to landed oligarchies, therefore had different political aspirations
the new class of industrialists brought new power brokers to the political scene by the 1950s and 1960s,
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in Chile, new industry created a powerful entrepreneurial class
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between the 1960s and 1980s the ISI system began to break down and create economic distress in Latin America
despite industrial output in manufacturing, machinery, spare parts, patents and technology continued to be bought from developed countries, creating a dependency
the system could easily fail if these vital items became too expensive or were withheld for political reasons
this could easily arise in the Cold War world, which did end up happening
consumer goods produced by national industries had limited markets, as income inequality precluded mass consumption
at the same time technology and automisation both in industry and agriculture began to affect unemployment figures, further lowering purchasing power and limiting the market
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democratic presidents took out loans from the international monetary fund (IMF), obliged governments to follow strict and unpopular economic austerity measures that often created more social discontent
USAID: Foreign aid program created in the Kennedy administration in 1961, to ensure that basic human needs were being met; thus avoiding a socialist revolution
IMF: international organisation created by the UN to maintain financial stability by loaning money to countries.