MIDDLE AMERICA II (CHAPTER 4: 216-235)

Natural Resources

MAQUILADORAS Tijuana Ciudad Juarez Nogales Reynosa Matamoros Chihuahua Monterrey

GDP PER CAPITA ALONG THE US-MEXICAN BORDER

MAQUILADORAS >4,000 maquiladoras >1 million employees 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 Mexico gains jobs. 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 $25 $20 $15 $10 $5 $0 $20.21 $17.38 $1.55 $2.87 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

Middle & South America’s Vertical Climate Zones ALTITUDINAL ZONATION Middle & South America’s Vertical Climate Zones

ALTITUDINAL ZONATION TIERRA CALIENTE (Hot Land) Middle & South America’s Vertical Climate Zones TIERRA CALIENTE (Hot Land) Bananas, Cocoa, Sugar, Rice 2500’ 750 m Sea Level Sea Level

ALTITUDINAL ZONATION TIERRA TEMPLADA (Temperate Land) Coffee, Rice, Corn, Sugar 6,000’ 1800 m 2000’ 600 m Sea Level Sea Level

ALTITUDINAL ZONATION TIERRA FRIA (Cold Land) Corn, Wheat, Potato 12,000’ 3,600 m 6,000’ 2,000 m 2000’ 600 m Sea Level Sea Level

Middle & South America’s Vertical Climate Zones ALTITUDINAL ZONATION Middle & South America’s Vertical Climate Zones TIERRA HELADA (Frost Land) 12,000’ 3,600 m 6,000’ 2,000 m 2000’ 600 m Sea Level 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 crop-raising 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)