Reborn American Giants

In the nearly half century since the 1930s, the development of import substitution industrialization has always dominated Latin American countries. Countries have attempted to use the import substitution model to develop their own industries and strive to meet their own needs with domestic production.

This is a relatively closed economic development model. The government attempts to use high tariffs and low import quotas to impose import restrictions on goods that the country imports in large quantities. At the same time, it supports the development of related domestic industries and strives to gradually replace them with domestic production.

Import, thereby driving economic growth, achieving industrialization, correcting the trade deficit, and balancing the international balance of payments.

This method generally has two stages. The first stage is to establish a number of final consumer goods industries, such as food, clothing, home appliance manufacturing and related textile, leather, wood industries, etc., in order to replace imported goods with domestically produced consumer goods.

, the second stage will be entered when domestically produced consumer goods can replace imported goods and meet domestic market demand.

In the second stage, import substitution shifts from consumer goods to the production of capital goods and intermediate products that are in short supply domestically, such as machine manufacturing, petroleum processing, steel industry and other capital-intensive industries. After the development of these two stages, the import substitution industry has become increasingly mature.

, laying the foundation for comprehensive industrialization.

Unfortunately, Latin American countries have all fallen into the first stage and have never been able to take the second step.

This closed economic development model that lacks competition has made the technical level and production equipment of El Salvador's domestic production industries seriously backward. The products produced lack international competitiveness and cannot achieve the original goal of earning foreign exchange through exports.

The export of raw material commodities has been greatly affected by price fluctuations in the international market. In recent years, due to the impact of the international oil crisis and civil war, raw material prices and output have declined severely.

Affected by these two aspects, El Salvador's foreign exchange reserves have been further depleted, and restricting imports does not mean importing nothing, because the land in El Salvador has begun to be concentrated in the hands of a few people. In order to pursue profits, large plantation owners have planted economic crops.

Crops have led to a reduction in food production. Since the 1970s, El Salvador has changed from a food exporting country to a food importing country. It needs to spend a large amount of precious foreign exchange to import food from other countries every year, further depleting foreign exchange reserves.

The depletion of sources of foreign exchange reserves means that El Salvador must continue to borrow external debt, so a surge in fiscal deficit and foreign debt will inevitably occur. This is a major inducement for high inflation.

As a result, El Salvador fell deeper and deeper into the quagmire under the guidance of the economic policy of export substitution for industrialization development for decades.

Under the protection of tariff barriers, domestic producers who have made huge profits often do not invest funds in product technology upgrades, replacement of production equipment, and expansion of reproduction because of the lack of competitors.

Where did it go?

There is no doubt that financial speculation that can obtain more profits has been sought after, and a large amount of hot money has poured into the financial speculation industry.

Without the relief of expanded reproduction, the original industrial production was unable to create more jobs, and the lack of employment opportunities resulted in a high unemployment rate.

The high unemployment rate and the prevalence of the financial investment industry have led to a break in wealth distribution.

People who have lost their jobs are getting poorer, while those who participate in financial speculation are getting richer. A large amount of wealth is circulating in the nihilistic financial field, and correspondingly, the real economy is further shrinking.

The final result is that the import substitution industrialization development strategy has always stalled in the first stage, with no hope of launching the second stage of comprehensive industrialization development.

At this point, the country's economy is on the verge of collapse and social conflicts are acute.

Corresponding to the economic model of import substitution industrialization development, it is the export-oriented economic development model. The representative countries of this model are the Four Asian Tigers during the same period. They all adopted export-oriented policies to develop their economies and vigorously developed labor-intensive enterprises.

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In Victor's view, if El Salvador can abandon the inward-looking import substitution industrialization development model and adopt a more positive, freer, and broader export-oriented or liberal model economic development policy, supplemented by complete laws and regulations,

Especially relying on labor-intensive enterprises, taking advantage of El Salvador's population advantages, superior geographical location and relations with the United States, and gradually integrating with international standards, there is no possibility of further development.

Unfortunately, changing a country's economic development policy is not as simple as eating and drinking. The rise of a policy will create a group of vested interests. They rely on the original policy to obtain a large amount of wealth and rights. Relying on this wealth, they in turn

Come and use this power to influence the government, or even kidnap the government. Any person or organization that attempts to change this policy will face their obstruction and attack.

At this time, a strong political figure needs to stand up. He must have the ability and prestige to make the final decision and be able to promote the country's strategic transformation. Just like the old man when the rabbit was just reborn, he must be able to use whatever he wants.

His unparalleled personal prestige and skillful political methods suppressed opposition forces from all sides.

However, in El Salvador, Victor saw no sign of the existence of such a prestigious person. Although Jose Napoleon Duarte is the current chairman of the military government, he has also carried out political reforms and returned power to the civilian government.

However, his prestige is not enough to make all political forces bow their heads. At the same time, as a politician close to the United States, his influence on the local planters in El Salvador is really limited. This leads to the strong opposition he faces. Victor does not

I wonder if Jose, under such circumstances, still has the courage to carry out a series of economic reform policies and reach out to the original interest groups.

Judging from all aspects of the situation, the countries that emerged in the 1960s after World War II all started with an inward-oriented economy, using the economic policy of import substitution for industrialization development to create favorable conditions for the country's industrial capacity, and then switched to an inward-looking economy.

The export-oriented economic model, supplemented by a complete social security system, minimum wage standards, social charity and other means, resolves social conflicts caused by the gap between rich and poor, ushering in the country's economic take-off.

Today, El Salvador has reached a point where reform is the only solution, but this requires the emergence of a nodal figure. Victor knows very well that in this tossing and collision of the fate of the country and the people, the fate of many people will change.

As for whether this change is good or bad, only God can probably know.

But although Victor doesn't know what he can gain from this change, at least he knows what he should do now...