Latin America, so called today, was originally home to great civilizations such as the Aztec, Maya, and Inca. However, by the end of the sixteenth century, these civilizations were wiped out and most of Latin America was colonized by Europeans, particularly the Spanish and Portuguese who speak the Latin-languages. And a long time passed before this region saw light. Inspired by the American and French Revolutions, and due to the weakening of Spain and Portugal, Latin American nations began independence movements in the nineteenth century. Starting with Haiti in 1804, most nations gained independence by 1825. This was to bring immense hope to the people of Latin America. But instead, despair was brought and consequences of independence were severe. The economy and politics were tremendously instable and became even worse than the colonial period. Serious economic setbacks occurred and foreign intervention increased as outsiders looked to take advantage of the troubled region. Dictators emerged due to political instability and civil wars for power-control arose.
Independence resulted in free trade and access to the international capital market. These would be key factors in advancing Latin America. However, due to lack of experience in the world of trade and weakening of Latin American economic institutions from prolonged wars of independence, its potential growth was hindered. Furthermore, the region lost its main trading partners, former rulers Spain and Portugal, who provided them with much of the export income. The Spanish and Portuguese also directed and protected the economy of Latin America but there was no legitimate character within the continent to replace them. Trade among the newly independent nations decreased as well because of tariffs imposed on each other's imports. The Latin American nations had no choice but to ask for help from foreign nations, specifically Great Britain and the United States, because foreign investment and sale of exports was all the Latin American nations could rely on for national income. The foreign powers gratefully accepted as they wanted to establish Latin America as its new market in order to sell their products. However, the Latin Americans had more to lose than gain from this trade. Despite tariffs imposed on finished products from Great Britain and the United States, these imports were far cheaper than domestic products because the costs of producing domestic finished products were higher as Latin American nations lacked efficiency. Furthermore, the products Latin America exported was mainly raw material and each nation had only one or two types of these to export. What's even more troubling was that the production of these raw materials was also a difficult process due to lack of skills. Silver production decreased by fifty percent in Bolivia and seventy-five percent in Mexico compared to production before independence. Foreign investment was also no help since there was a limit to how much the United States and Great Britain could give to the numerous nations of Latin America.
The political situation in Latin America was far worse than the economic situation. Except for a few nations such as Chile and Uruguay, no nation had had a stable regime. This was mainly because the nations were new ('f 15). They were only beginning to gain their identities as a nation with new names, flags, and national anthems. Furthermore, there was no established border between these countries and there were ongoing battles between nations to gain more land. The political parties of most nations were divided into the conservatives, who wanted preservation of traditional social hierarchies to guarantee national stability, and the liberals, who wanted reform of economy and individual initiative to develop their nation. These parties struggled against each other for power and control in their nation, causing civil wars in some nations. Due to these conflicts, some states such as the Gran Colombia and the Federal Republic of Central America collapsed and divided into several different nations.
Political-military dictators known as caudillos emerged as a result of the economic and political crisis. These caudillos were formerly top class officers of armies that came into existence during independence wars. Evidently, they were deemed heroes by their people due to their feat in gaining independence. However, they wanted compensations for this deed and did not disband their armies in order to influence the course of political development as they were more stable and organized than other institutions. Eventually, leaders of these armies rose to the highest status within their nations. But this turned out to be catastrophic as they did not have enough knowledge about how to run a nation and did not care about the lives of their people. All they wanted was power and wealth. Thanks to these 'great' leaders, the first decades of the newly formed Latin American nations were marred by militarism and the nations experienced great setbacks despite gaining the freedom they yearned for so long. Even today, most of these nations have trouble overcoming the problems that existed for so long. Not a single one of these nations are considered developed and their future still remains cloudy.
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