Research in The Factors Influencing Latin American Economy: Silver Trade, Sugar Trade and Economic Dependence on Hydropower

Though seemingly unrelated and irrelevant to each other, economic interactions between global and regional dynamics have greatly changed nearly every nation in our world. The Latin America and Caribbean region in particular has experienced the great strength of these forces, especially in driving environmental change. The silver trade, sugar trade, and economic dependence on hydropower all demonstrate how international economic catalysts have changed the Latin American and Caribbean environment.

The boom in the worldwide silver trade in the late 1500’s not only revolutionized the world economy, but also significantly affected the Latin American environment. Though the great abundance of silver in the Spanish American regions such as San Luis Potosi was a catalyst for the boom in the worldwide silver trade, perhaps the largest contribution to the dynamic increase in the silver trade and transformation in the world economy was its ever-growing trade with China. Due to the “Single-Whip” reform in 1581, by which taxpayers were required to pay silver payments to the government instead of crops, China’s use of silver skyrocketed, making silver worth more in China than anywhere else in the world. This combined with the high demand for Chinese trade goods in Europe made the Chinese one of the major consumers of the Spanish silver trade, and made them constantly require silver.

This ever-increasing Chinese demand for silver, drove the Spanish to constantly expand their silver mines in New Spain, and thereby to also perpetually cut down trees that were used to power the silver mines. The heavy soil erosion caused by deforestation in conjunction with severe overgrazing by cattle, brought to feed the communities created by the mining industry, often pushed landscapes beyond repair. Further, this clear-cutting caused the biodiversity of the mining regions to diminish, the fires the Spanish used to clear the forests turning them into grasslands and destroying the habitat of animals suited to living in forests. However, this scouring the landscape of trees and creating grasslands did set the stage for the development of colonial forms of land use, in particular agriculture and pastoralism, and colonies themselves, as the ashes provided nutrients that primed the ground for growing crops and grass.

The sugar trade was another factor that affected the Latin America’s environment, primarily through disease. With the Caribbean’s dominance in the sugar industry in the mid to late 1600’s, came the rise of the Triangular Trade system, a transatlantic trade route with sugar produced in the Caribbean being sent to their mother countries and traded for manufactured goods, which were then sent to Africa in exchange for slaves that were transferred to the Caribbean. Due to the establishment of the Triangle Trade Route, the demand for sugar only increased, and thus large plantations systems were established in order to meet it. Consequently, many slaves were needed to work in the plantations and thus the slave trade prospered as well. Due to prosper of slave trade, port cities developed to create a market for the fresh slaves. However, the slave ships brought more than just slaves to the Caribbean; the slaves often brought with them yellow fever and malaria in the form of mosquitos. Most of these slaves were from Africa, and consequently carried malaria or yellow fever plasmodia in their bloodstreams. Thus, when these slaves were brought to the Caribbean, malaria and yellow fever from these slaves was reintroduced into the population through the An. albimanus mosquito and A. aegypti respectively; the former found itself able to proliferate very effectively due to the swampy areas created by deforestation and soil erosion, both a part of the aftermath of plantation building and the latter due to the adequate amount of water vessels due to the rise of port cities. The effects of yellow fever were most impactful in San Domingue (modernly known as Haiti), where slaves and gens de color were able to win their independence due to their immunity to yellow fever, compared their opposition’s lack thereof.

Though the silver and sugar trade certainly affected the Latin American environment, perhaps a more modern example is hydropower utilized by Peru. In the early 1900’s, Peru’s main sole economic function to export raw materials. However, the 1929 global economic catastrophe changed Latin American economic approach, and by the 1950’s and 1960’s after the instability World War 2 brought, the policy of Import Substitution Industrialization (ISI), a trade and economic policy that advocated replacing foreign imports with domestic production, was implemented in order to retain economic autonomy and shield their economies from fluctuations in the international markets.

The Peruvian government’s most prominent example of an ISI-esque project was the Santa Corporation, created in 1943 to bring economic development to Peru by specifically developing and exploiting mineral and industrial resources that came from the Santa River region and its tributaries. However, in order to manufacture their raw materials into goods, Peru needed a source of energy that would power the factories that would eventually make them a self-importing economy. The Santa River in the the Canon del Plato was a prime spot for a hydroelectric station that would power the factories and urban homes of Chimbote, and the government-sponsored Santa Corporation soon became obsessed with building hydroelectric stations to fuel Peru’s industrialization. Soon, the preservation and protection of the hydroelectric stations became one of the Peruvian government’s top priorities, even taking precedence over its citizens. In response to the destruction of the Canon del Pato hydroelectric station due to the Jankurish flood, the Lakes Commission was created in order to conduct glacial lake studies and disaster mitigation. This effective government effort to moderate glacial disasters was due to the destruction of a hydroelectric station, rather than the deaths of thousand of citizens. As a result of the government’s attempt to protect its hydroelectric interests, the lake environments were compromised. Certain lakes such as lake Paron were drained because of the danger its potential flooding could impose on a hydroelectric plant, while others such as Tullparaju were, despite being dangerously close to flooding, ignored. Additionally, in order further expand hydroelectricity, the Peruvian government created artificial reservoirs, particularly in the Canon del Plato, which contributed to the change in the Peruvian environment. Hydroelectricity, developed by the will of the Peruvian people advance, brought not only economic change, but a environmental transformations as well, leaving legacies of the Peruvians’ attempts to break out of the lower echelon of nations, and become truly recognized.