Economic geographies of contemporary Latin America (Brazil), using globalization theories
Economic geography is defined as the branch of Geography that is concerned with the interrelations between the economic and the physical conditions to the production and distribution of the available commodities or resources (Merrriam Webster Incorporated, 2011). It deals with the influence of both the organic and inorganic environment on the activities of man.
This paper is focused on divulging how the physical conditions relate to the resources available for the people living in Brazil and the Latin America in general. In the bid to find out this relationship, there will be several globalization theories that will be looked into in order to be able to understand clearly the relationship and the distribution that there is.
Definition of terms
According to Hunington (2011), the economic geography covers the distribution of various types of resources, institutions, capacities, activities, customs and variety of ability that concerns earning a living. This then means that economic geography includes three major entities; industrial, agricultural and commercial.
There are various theories that try to explain the factors behind the physical conditions and the distribution of the resources. They try to sow why some of the resources are concentrated in some areas and not others and the effect that they have in the regions. One of these theories is the Globalization theory.
Globalization theory tends to aim at understanding the complex proliferation of connection among the various factors of production and the recipients and the resources taking into account that these affects the social life and existence across the myriad of spheres that there are. Under the globalization theories, there are three basic theories therein that have been used all along to explain the economy of various countries or parts of the world, these are;
World Polity theory
World culture theory
These are the theories that will be covered within the scope of this paper in a bid to explain the economic geography of Brazil and the Latin America in general.
The economy of Brazil and the World-System theory
The world-system theory refers to the historical social system that is dominated by the interdependence of parts of the society that ultimately form a single unit or definite structure that has distinct rules. It has one labor system with various cultural systems (Wallerstein, 1974).
It is characterized by the world empires, mini-systems and the world economies. It came into being after the feudalism as a system underwent a major crisis that created a rush to get new resources and market. This then meant that everything was commercialized and viewed as a commodity; even the availability of labor was equally commercialized and turned into a commodity.
The structure of the world-system theory is such that there is a homogenous division of labor in the world market though there are several states as well as cultures. The labor is classified into geographically distinct and functionally defined sections.
There are the core states that are more focused on the higher skills and capital intensive production, militarily stronger than others and control much of the world economy.
Then there are the peripheral states that focus on the low-skill, extraction of the existing raw materials and labor intensive production and the states found in this section are the poor states that are highly dependent on the core states.
The third category under this theory is the semi-peripheral states. These are the states that are dependent lesser on the core states than the peripheral states. Their economies are more diversified and are composed of stronger states than the peripheral states (Frank Lenchner, 2001).
The position of Brazil and indeed most of the Latin American countries is at the semi-peripheral states since though they are somehow dependent on the core countries for the economic fortification and the enhancement of their production and processing, they have a well developed mining, agricultural, manufacturing and service sectors.
It is a fact that the economy of Brazil outweighs most of the South American countries and has steadily improved its presence in the world market scene by stabilizing its macroeconomic sector, reduction of the debt profile and investing in the foreign reserves.
Brazil is also known for the strong growth it has exhibited in the various sectors in its economy and the high interest rates that it has posted over time hence making it a destination for many foreign investors. The currency has highly appreciated over the last few years and eventual increase on the tax on foreign investors due to the large capital inflow. Brazil had achieved a $2.024 trillion GDP by 2010 which placed it at number eight in the world map in terms of purchasing power and parity (The World Factbook, 2011).
Further, though the military is strong and stable, there is not much spending that is allocated to it as compared to the core countries with 1.7% of the GDP being directed to the military of Brazil hence placing it at number 91 in the world military expenditure.
Brazil exhibits the characteristics of both the core as well as the periphery countries which is an outstanding characteristic of the semi-periphery countries. Despite the stabilizing economy, large foreign investment and the industrialization that is going on in the country, there is still a large portion of Brazilians still living in the slum areas otherwise known as Favelas.
It was observed that in a population of 192 million people, a significant 54 million still live in the shanty houses or the Favelas (South American Experts, 2011). This is a significant 28.2% of the total population which is a cause of concern for the government. However, this display of polarity and duality of the economic classes and the ability is a predominant characteristic of the semi-peripheral countries.
The Latin American economy has seen an interesting trend where there emerged a grand consolidation and integration in the major market sectors including the banking sector. In the period between 1995 and 2000 there was a rapid decrease of banks as a result of integration, foreign participation increase and decrease in the financial intermediation cost in the Latin American region. The integration in Latin America was however a bit different from the developed countries where integration is mainly motivated by acquisitions and mergers; in the Latin American region consolidation was motivated by the economic stabilization and the liberalization of the financial services (Jose Carlos Wong Davila, 2011).
The agriculture in the Latin America is also one that can be pointed at as having contributed significantly to the economy of the region. The crops that thrive in the region are wheat, maize, rice, beans, beef and milk. The fishery sector is also one that stands out in the region and even the world over. The Latin American countries are known to be the major exporters of fish and fisheries products catering for up to 11% of the world exports, Chile being the main exporter (FAO, 2011). The fish and fisheries production product has been so steady in the Latin America and Caribbean with the peak year being 1994 with a 24 million tones which catered for 22% of the world total.
The economy of Brazil and the World polity theory
According to Meyer (1980) a polity is defined as a "system of creating value through the collective conferral of authority." It is characterized by a set of rules which are referred to as the framework or the models. The participants in the polity are motivated by the frameworks that exist and the fact that it contains no single institution or actor that defines the values of the world.
The polity theory is bent on propagating the world culture, which is a set of universally applicable standards that are to be followed by the members of this world culture. In this theory, the sovereign states are the key actors in the culture. The states maintain their sovereign status and their identity is highly stable, but still belongs to the universal cultures. There is then the institutionalization of the models or the standards which then leads to the ultimate similarity in structure. This in turn makes the states to adopt similar constitutions, education systems and policies.
Since there is an apparent influence of the powerful states, each of the world culture member states will want to have the influence, hence there will be a tendency of the states to comply with the economic systems of the more powerful states of the world culture.
Most of the economies of the powerful states in the world culture, which happen to be the Western countries, are capitalist in nature. Brazil initially had not warmed up to the capitalism ideology but relied mostly on the industrial development and a utilization of the internal market that was equally large. However, the economy of Brazil has turned capitalistic and there is no turning back about this as indicated by Juan De Onis (2000). This is a shift from the nationalist mercantilism which…
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