Emerging Markets / October 5, 2017

Sustainable Economic Development in Latin America

The difficulty of defining development and its history in Latin America are widely discussed topics. Firstly, development can be understood in a variety of ways, from a scientific and biological standpoint or from an economic and social standpoint. A traditional definition for development is economic evolution towards better standards of living in a country or society. Likewise, another definition states that development is progress, welfare, modernization, economic, social, cultural or political growth.

Sustainable Economic Development in Latin America

When exploring the concept in the modern era, mainly the 20th century, development has been traditionally tied to a purely economic notion relating to industrialization and material growth, which subordinates the human aspect. Simultaneously, with this mindset, the model of the advanced and westernized economies is taken as the maximum expression of linear development. As the United States President Harry S. Truman stated in 1962, modern development in the west is a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. However, during the last several decades, new voices have emerged to contest this idea of development.

Critical to a notion of purely economic development, alternative thinkers highlight the difference that exists between economic growth and social development. These voices have warned about the externalities of industrial economic development, such as the rapid growth of cities, the environmental cost of industrialization, and the limits imposed by nature on the idea of infinite growth. Most of these critical theorists, including the champions of the so-called dependency theory, maintained their fundamental focus on the material and numerical aspect of development. For instance, economists quickly pointed out that some regions, particularly throughout the Global South, have structural disadvantages within the global market. Therefore, in Latin America, scholars like Raúl Prebisch denounced what they saw as a dynamic that perpetuated and deepened some regions as peripheral and others as central. In order to overcome this sort of economic neo-mercantilism, Latin American governments tried to impose the model of industrialization by substation of imports (ISI). This economic model aimed at developing the region according to the Western economic model and claiming a degree of regional industrial self-sufficiency. One of the key flaws of this model was the fact that it did not take into account the different comparative advantages of each country and world region, but rather tried to avoid trade and, to a certain extent, promoted regional autarky.

Nevertheless, this economic development model was not without criticism within the region. Ecologists and social justice advocates brought up questions regarding the notion of perpetual industrial development and proposed a more community oriented development model. Some of the principles of these alternative development models include the rejection of the industrialized nations as the only development model, the emphasis on agriculture, and the use of alternative energy sources, other than fossil fuels.

Within this context, Farmfolio’s CEO J. Dax Cooke has conceptualized organic agriculture into an innovative asset that contributes to the communities within which it is being produced as well as its stakeholders and investors. An industry pioneer, Farmfolio’s CEO J. Dax Cooke has created a new model for foreign investment and sustainable economic development.

(Read more about The Potential of Blockchain in Agribusiness)

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