Impact of Liberalization Policies on The Economies of Latin America and Eastern Europe



Impact of Liberalization Policies on The Economies Of Latin America And Eastern Europe

Introduction

One of the most significant and contentious political debates in social sciences focus on relationship between political regime and economic policy. Liberalization in general, means to provide liberty to someone in some aspect. In economy, liberalization means to allow different economic entities, both private and public, to engage in some economical activity. It can put an end to the monopoly of administration. Economic liberalism is a type of policy that is followed in economics and theories. Liberalization affects the economic activities of a country. In the decade of 1990s, various liberalization policies were implemented in Latin America and Eastern Europe. In this paper an attempt is made to assess the impact of liberalization policies on economies of Latin America and E-Europe. The purpose of this paper is to have in depth knowledge regarding the impacts of liberalization policies on economies of these two regions. This paper would prove to be a helpful in analyzing the consequences, both desired and the undesired. (David , 2005).

Discussion

Background of Two Regions

Let us first consider the economical conditions that prevailed in the two regions under discussion separately.

Latin America

Latin America includes vast areas of the Western Hemisphere south of the U.S. (Mexico, Central and South America and the adjacent islands with a total area 20.6 million km 2 (15% of the inhabited land). In 2010, the economic growth rate of Latin America was 5.7%. The major countries that are a part of Latin America are Brazil, Argentina, Cuba, Colombia, Mexico and Uruguay.

In 1998 and 1999, most of the countries of the Latin America were struck hard by an economic recession. The recession started in East Asia, but soon had its impacts on the Latin America as well. As a result, a large number of financial corporations and organization were closed down. This led to an increase in the poverty and unemployment rate in the region. This recession had deep impacts on the overall economic progress and situation of Latin America.

According to the majority of economical analysts, the reason behind this recession was the huge weight taken by the financial capital of short-term nature, in the economic structure of the markets that were emerging at that time. Due to this financial crisis, Latin America suffered a setback in its economic growth. Its economic development continued at a slowed down rate (Third World Network, 2012).

Eastern Europe

Eastern part of European continent includes Russia, Bulgaria, Belarus, Czech Republic, Hungary, Poland, Ukraine and some other countries. The reason behind the division of Europe into eastern and western regions was the World War 2. After the World Warn 2, the western bloc inclined towards capitalism, while the Eastern Europe showed inclination towards communism.

Western Europe was located near the regions where capitalism was in fashion, while the eastern Europe was located near USSR, where Communism was implemented. As a result, both the blocs were influenced ...