CRISIS DEVELOPMENT OF

LATIN AMERICA AND EAST

ASIA
BY: BSIT- 1A ELECTRICAL TECHNOLOGY
The Latin America
THE EAST ASIA

China.
Hong Kong.
Japan.
Macau.
Mongolia.
North Korea.
South Korea.
Taiwan.
 THE ECONOMIC CHALLENGE OF LATIN AMERICA IN 70’S

After World War II,

Latin American Countries decided to end their
membership to GATT System.
GATT System
The General Agreement on Tariffs and Trade (GATT) (Signed: 30
October 1947)

IMF- International Monetary Fund

World Bank
 The 28 countries of Latin America account with about 600 Million people.

 Based on the 2013 World Bank Economic Situation and Prospect Report,
~most Latin American countries are classified as developing economies
This includes the economies of:
Argentina Venezuela
Brazil Guatemala
Chile Honduras
Columbia Mexico
Costa Rica Panama
Ecuador Bolivia
El Salvador Nicaragua
Paraguay
Peru
Uruguay
 Those are the countries which fall under the heavily poor
indebted countries as of 2013.

Brazil and Mexico

~performed well using protectionist policies, but
this economies were fortunate to found an option in its
large population and market.
(Protectionism is the economic policy of restricting
imports from other countries through methods such as
tariffs on imported goods, import quotas, and a variety
of other government regulations.)
(1972- 1987)
~a 15- year period of economic crisis and described
as lost decades of Latin America.
~economic stagnation
(Economic stagnation is a prolonged period of
slow economic growth (traditionally measured in terms of
the GDP growth), usually accompanied by high
unemployment.)
~brought Domestic Policies, High Debt, and Oil Crisis.
 Argentina, Brazil, Chile, Columbia, Mexico, and Peru
 Incurred a drastic increase of debt from $35 – $248 Billion
 The Debt Crisis

 During the 80’s, Debt Crisis

~occurs the result of financial instability of global economy.

 Financial institutions in industrialize North became more aggressive brought by

deregulation of global economy and major technological break trough's.
 The financial giants turns there attention to global South where Latin America is part of the
group.
 This countries were receiving the minimal amount of foreign aid and in some cases ODA
from US decrease.
Official development assistance (ODA) is a term coined by the Development Assistance
Committee (DAC) of the Organisation for Economic Co-operation and
Development (OECD) to measure aid.
 STAGES OF FINANCIAL CRISIS
 DISPLACEMENT
~this stage characterized by occurrence of external shocks or information
that affects the economic outlook of the country. Investors and economic
managers react negatively if the World Economy is predicted to experience a
declined in production of a particular commodity.
~if there is negative news on the global oil production in the Middle East,
importers and industries that are dependent on oil were respond negatively to
the situation.

 EXPANSION
~expansion happens when an economy has increase in liquidity or
investment money.
~bank credit and financial innovations are examples of potential sources of
liquidity.
~if there is an abundant availability of funds and money in the market,
investors and buyers show enthusiasm and interest to barrow or buy funds from
the issuing agency.
 EUPHORIA
~ this stage of financial crisis takes place when the
motive of buying becomes to sell and take the interest or the
capital gain as the price becomes higher.
~this period is called “over-trading”
(engage in more business than can be supported by the
market or by the funds or resources available.)
~speculation based on high price alone will result to
mania leading to economic bubble.
(An economic bubble or asset bubble is a situation in which
asset prices appear to be based on implausible or inconsistent views
about the future. It could also be described as trade in an asset at a
price or price range that strongly exceeds the asset's intrinsic value.)
 DISTRESS
~distress could be experience if there are concerns of the buyers
and investors that the over all environment of the economy is risky and
fragile.
~It takes time to unsettle this situation brought by the public mania
and pure-speculation.

 REVULSION
~this feature of the economic crisis when there is a sharp shift of
public behavior on a particular economic event of activity.
~this includes panic of buyers, and a collapse in prices of
commodities.
~during revulsion, investors are in usual behavior, concerned, and
wary on how and when to get the money.
CONTAGION
~this is the traditional and global effects of crisis,
affecting other economies and countries hurting different
industries and sectors.
~a particular crisis can bring potential damage to the flow
of investment, currency, international trade and the lives of
the people directly affected by it.
THE ASIAN DEVELOPMENT
EAST ASIAN DEVELOPMENT:ASIA MIRACLE
STATES AS ECONOMIC MANAGER