Term
| ISI- Import substitution Industrialization |
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Definition
| The idea that a country should attempt to reduce its foreign dependency through the local production of industrialized products. Kind of like self-sufficiency, take time to build your economies and those industries and then they will be strong enough for you to “open up” again. We can’t become too dependent on other countries because that gives them a lot of power over us. |
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Term
| Raul Prebisch (1901-1986) |
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Definition
| Central banker; Big believer in free market capitalism |
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Term
| Prebisch-Singer Hypothesis |
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Definition
| “Terms of Trade” How much of what I’m exporting does it take to buy what you’re exporting to me? How many pounds of cattle must I sell in order to buy one of your cars? This number may change, but Prebisch says it does change over time to the countries that are exporting primary goods. Over time they will have to export more primary goods in order to import more secondary goods. Why? Consumers over time are becoming wealthier so there is more demand for manufactured goods than primary goods. Primary export countries need to be more efficient at a faster rate than secondary export countries. |
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Term
| Primary Goods, Secondary Goods, and Tertiary Goods |
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Definition
Primary: raw materials, copper, corn, etc. Must be extracted, mined, etc.
Secondary: manufactured goods
Tertiary: Services; real estate, finance, restaurants, brokers, professors, etc. |
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Term
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Definition
Core: mostly people involved in secondary and tertiary goods. Main goal is to manufacture primary goods
Periphery: people involved in primary goods; shipping raw materials to core so the core can manufacture them; Their main goal is to supplying materials to the core
The goal of the ISI is to take countries that are the periphery and make them the core by them becoming “self sufficient” and less dependent on the core countries. |
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Term
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Definition
| Multi-National Companies; Prebisch would find this to be against his idea. |
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Term
| Dependencia policies in Latin America |
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Definition
| Free trade represented a loss of independence based on the idea of periphery. Chile wanted to have a steel industry and the government started to raise tariffs on steel so it is difficult for foreign companies to sell steel in Chile. Chile could then use domestic companies for their steel to build up their strength. It doesn’t raise money because it is more expensive to use domestic steal than importing cheap steel. |
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Term
| Latin American Debt Crisis, 1980s |
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Definition
| Chile is taking out loans to pay for this expansion to their economy, thinking they will become competitive with other countries. The trend moves away from ISI. How are these contracts going to be rewritten? IMF says they will come in and help the crisis. |
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Term
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Definition
| Concept of economic self-sufficiency; Ghandi: “That spirit in us which restricts us to the use and service of our immediate surroundings to the exclusion of the more remote.” |
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Term
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Definition
| 15% tax applied to anyone who wanted to exchange for foreign currency. Foreign exchange could only be spent on imports that the government deemed essential. |
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Term
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Definition
| Raj is a term used to reference India. In order to conduct business one had to get a great deal of government license’s. Even if they wanted to import anything..they had to get a license and give proof that product could not be manufactured in India. |
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Term
| ndia’s Relative Decline in Asia, 1960s-1980s |
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Definition
1950; per capita income was $150 per person per year in India. the Republic of Korea same income was $350
1980; India- $230 RoK-$2,900 India is not doing well in Asia. |
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Term
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Definition
| Companies moving manufacturing operations to place that has lower labor costs. A country that isn’t the primary consumer of the goods. |
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Term
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Definition
| Economies of four places in East Asia that, following Japan a few years later, began to have a lot of success. Hong Kong (British Colony), Singapore, Taiwan, South Korea (ROK). All these countries were looking at what Japan did using the export model. The countries just mimic Japan/follow in their wake. |
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Term
| PRC Economic Liberalization, 1979 |
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Definition
| Economy of the People’s Republic of China; Other countries thought China was one of the least likely countries to liberate because they were a planned economy and wouldn’t trade with market economies. |
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Term
| Were the Soviets victims of imperial over-stretch? |
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Definition
| The Soviets were a planned economy; their money was not being used as efficiently as it should have been and since workers were all paid the same amount of money for the level of work they did (they could do virtually nothing and get paid the same as people doing a lot of work) the Soviet’s were not producing to their full potential... eventually leading to imperial over-stretch from the way the planned economy was run. -Planned economies are not successful. |
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Term
| Collapse of the USSR, 1991 |
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Definition
| With the planned economy failing in the Soviet Union the rest of the world was thinking that they shouldn’t have planned economies because they will end up like the Soviets... this led to the collapse of the USSR. |
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