Neo-colonialism the Cause of Latin America's Economic Ills

The Uruguayan weekly, Accion, explained that the industrialised countries which followed a buy-cheap-and-selledear policy were responsible for the capital outflow, accumulative payment deficits and inflation in Latin American countries, Because of a drop in world prices, the governments of raw material exporting countries devalued their currencies to strengthen the competitive power of their commodities on the world market, the paper said. This gives rise to inflation, especially in such countries as Uruguay which have to import large quantities of consumer goods and services, From 1959 to 1964, under the forceful impact of currency devaluation, the cost of living went up 12 times in Brazil, 6 times in Truguay and 4 times in Argentinse The rising trend of the cost of living became still more acute after 1963. Under galloping inflation, the paper continued, the discrepancy between prices in the domestic market and in the world market widens and this demands another currency devaluation, This is merely the beginning of a vicious circle, From 1959 to 1964, the paper pointed out, Uruguay devalued its currency 3 times, Chile 11 times, Brazil 12 times. In these countries, the rise in exchange rates is completely at one with the decline in the selling prices of ayvnarta and the soaring prices at home.