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Central American Economy

In this paper, I will discuss about Central American economy using dependency theory. I will talk about the problems of being heavily dependent on traditional agricultural exports and maquila industry exports to the United States. Then I will suggests an alternative to export oriented economic development model. I will briefly go through Central American history and current situation, listing some problems and potential problems. To emphasize the problems, I will talk about my own experiences in Costa Rica, using "Garan" to explain maquila factory. Then I will suggest some alternative models of growth and suggest what is needed to be done.

For comparison, I used Central America's data and Japan's data. Because Japan is a small country with limited resources, similar to Central American countries, Central America can learn a lot from Japan. Also I included some opinions and information from a person from the area.

Central America is a region relatively untouched by the United States and other developed countries. Still its development is heavily influenced by the United States because to achieve the rapid development, Central America needs to listen to other developed countries or they would not receive any ai


There are a few key facts that help to access current Central American economy. Maquila industry is the rising industry, supposedly the cure to its economic stagnation. Traditional agricultural exports are still the strongest industry. Domestic market are very weak and most of the productions are food oriented and produced and consumed by farmers. Central American Common Market (CACM) was supposed to be the big trade agreement, similar to EU, NAFTA, etc.. But it did not work out and the revival of CACM is the key to the growth of Central American economy. Looking at the relationship of export and important is also important to determine how dependent Central America is.

The problem of this factory was that management care efficiency and productivity without taking much consideration in investing in human resources. Yes, employees can be replaced easily and yes the cost of satisfying employees and making pleasant working environment is high in this case, and yes they are doing right things to maximize their profit and use resources efficiently, but morally it is wrong.

Agroindustry is a fairly new type of development strategy which focuses in internal growth, rather than liberalization and opening up the economy. In agroindusty, the center focus in agriculture. By focusing of agriculture, employment in the sector will increase and the production of agricultural sector increases, which reduces the need to import food for domestic consumption. As a result, use of foreign reserve will decrease and it will improve the balance of trade. Increased domestic consumption will cause a need to improve infrastructure, such as road, storage, irrigation and drainage system. Also there will be more demand from basic equipment such as fertilizer and shovels to more complicated equipment such as a tractor. These demand will aggrandize other domestic industry, further decreasing the need to import and export. Because the focus in on agriculture, rapid urbanization will not occur and a lot of problems from crowding the city can be avoided. Also, the income inequality will be less compared to export oriented strategy because agriculture is the soul of this strategy and there will be less of large scale farming and companies.



Some common words found in the essay are:
Central America, Central American, Costa Rica, Dependency Theory, Agroindustry Agroindustry, Costa Rican, Market Improvement, Trade Zone, World Bank, English Literacy, central america, central american, costa rica, maquila industry, el salvador, central american countries, american countries, domestic consumption, global market, free trade, trade zone, free trade zone, america common market, central america common, central american economy,
Approximate Word count = 5030
Approximate Pages = 20 (250 words per page double spaced)


  

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