Regional Economy
Yokeshia West
GEO 150
Matthew Snyder
University of Phoenix
June 2, 2009
Regional Economy
Mercosur was founded in 1991 by the Treaty of Asunción between Argentina, Brazil, Paraguay and Uruguay. The treaty defines its objectives, principles and instruments and lays down its institutional structure. Mercosur was conceived initially as an essentially economic integration arrangement to promote a custom union and a common market among the four founding countries. However, since 2002 the Mercosur leaders have agreed upon the need for a development model in which growth, social justice and people’s dignity are linked.
The colonial economy was centered on isolated agricultural and mining centers in which foreign-financed and foreign-managed firms employed local labor to produce raw materials for export to Europe, North America, and Japan. Colonial administrations started most of the important large-scale farming and mining activities: for example, cotton growing in the irrigated Al Jazīrah (Gezira) region of Sudan, rubber growing on plantations in Liberia, coffee growing in Côte d’Ivoire, Ethiopia, and Kenya, and copper mining in Zambia.
For a variety of reasons, colonial economies did not focus on developing industry to produce finished goods for local consumption. First, markets for finished goods in Africa were small. Second, mineral and agricultural raw materials, for the most part, were not processed in Africa, or were only minimally processed to ease shipment to ports. Third, since African industrialization was largely initiated by European firms, it was not in the firms’ interest to create competition for their own products in Europe. Fourth, in the case of some countries, both the colonial and later African governments kept the exchange rates of their currencies too high, making imported consumer goods more affordable.
South Africa and Zimbabwe were two distinct...