1. MIDDLE AMERICA II (CHAPTER 4: 216-235)

3. Natural
Resources

4. MAQUILADORAS Tijuana Ciudad Juarez Nogales Reynosa Matamoros Chihuahua
Monterrey

5. GDP PER CAPITA ALONG THE US-MEXICAN BORDER

6. 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

7. 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

8. MAQUILADORAS Maquiladora products Electronic equipment
Electric appliances
Auto parts
Clothing
Furniture

9. 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

10. 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

11. NAFTA
How has Mexico
benefited from NAFTA?

12. 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?

13. 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

14. 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.

15. ECONOMIC TRENDS (Central America & the Caribbean)
Agriculture
Industry
Services
Tourism
Environmental Issues
Deforestation

16. POST COLONIAL DEPENDENCY
Neocolonialism
Policies of developed states that enable them to dominate economies of former colonies
Disjunctive Development
Investments
Loans

17. 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

18. 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

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

20. 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

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

22. 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

23. 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

24. 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

25. ENVIRONMENTAL CONCERNS
Tropical Deforestation
3.5 million acres of woodland in Central America disappear each year!
What are the causes of
tropical deforestation?

26. 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

27. 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)

28. MIDDLE AMERICA II (CHAPTER 4: 216-235)