Developmentalism in Trenado
Developmentalism in Trenado is a recurring economic strategy that has been in practice since the Pato Pezzella administrations, between 1888 and 1908. The industrializing strategy has led to significant evolutions in the country's financial status, though it was also adapted to laissez-faire influences during certain governmental administrations.
Developmentalism is often defined as a theory that defends the use of a strong and varied internal market and high tariffs on imported goods, to favor less-developed nations. The definition of the word has been more flexible in Trenado, however, generally being related to the term angular development — coined by former Minister of Economy Simonetti Alves in 1962 — which implies a strong emphasis on positively-balanced exportations, mass production and investments in education to amplify future workforce. Although generally associated with Social Democratic mandates, it was a strategy frequently employed by the Libertarians when leading the nation's economy between 1973 and 2000.
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History
First Republic (1807–1932)
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Trenado's economic strength after gaining independence in May 1807 was strongly fragilized due to economic limitations imposed initially by the Spanish Empire, and the lack of recognition from countries in the international community. Thus, the Abraham Saabedra administration was remarkably dependant on trading and developing strong diplomatic relations with other countries, such as France and the United States. Pato Pezzella's administrations (1888–1908) marked the first significant attempt to implement developmentalist policies in Trenado, as a response to the neo-colonialist tendencies and conflicts in Europe. The president's financial cabinet, inspired by the economic transformations taking place in Europe and North America, sought to modernize the nation by investing heavily in infrastructure and promoting industrial growth. His government raised tariffs on imported goods to protect fledgling local industries from foreign competition and encouraged the production of textiles, steel, and agricultural machinery.
Santiago de Medeiros, who served as Minister of Economy from 1901 to 1908, had a perspective of not only reducing Trenado’s dependency on foreign imports but also fostering a self-sustaining internal market that could drive economic growth. His strategy was based in creating a network of interdependent industries, where growth in one sector would stimulate others. By the early 1920s, this economic plan would see the nation being widely advanced in the South American economic sphere, although the Libertarian presidents Victor Novoa and Filipe Salles would pursue a laissez-faire style of financing. This new strategy would open the economy for more importing, reducing tariffs and leading to a strong influx of cheaper goods and capital, though the industrial workforce would suffer a slight decline.
The Great Depression, however, would cause a change of scenery for the country's economic plans, as liberal policies would not be sufficient to keep up the growth. Alongside the rise of the Integralist Union and the 1932 coup d'état, developmentalist strategies would return as the nation needed replacements for the less attractive idea of importing from countries that were producing in minor quantities due to the financial crash.
New Republic (1947–)
The Post-World War II period marked a dramatic shift back toward developmentalist strategies, as governments sought to capitalize on the global economic boom and rebuild Trenado's industrial base. The strong focus on key industries such as oil, mining, and energy in the 1950s became central to these efforts. Administrations during the 1950's would also pursue a strong focus on research and technological imports, as the first televisions began reaching the general public as an investment from the Gael Pino administration and scientific research appeared to have high potential in the country's development.
During the Ferreyra era, then-minister Simonetti Alves brought the concept back under the term angular development, defending the idea of a multifaceted growth beyond the "classic" industries (metallurgicals and mining, for instance), as the human capital would serve an emphasized role through education. He promoted a model where industries would be supported by a well-trained workforce coming from universities and technical courses, capable of driving innovation and increasing productivity. Alves believed that a focus on positively-balanced exports — meaning the country would consistently export more than it imported, as opposed to the 1920s economic strategy employed by his political partners — was key to maintaining long-term economic health. His policies encouraged mass primary and secondary production, while also placing a premium on technological advancement.
The Great Trenadian Miracle of the 1970s until 2004 saw a significant investment in education and infrastructure in order to favor technical formations and attract foreign investments (both financial and in terms of human work). The recent boom of the developmentalist strategy would be named neo-developmentalism by economists, term generally associated with the Libertarian hybrid approach of market-oriented reforms with selective developmentalist policies. Further negotiations with the First World caused the country to thrive economically and socially through the global changes of neoliberalism during the 1980s.
As the national economy began opening up to massive imports during the 2000s, Trenado would suffer from political and economic instabilities masked by the commodity boom. These factors would cause a massive decrease in imports and trade value, which then led to an unprecedented socioeconomic crisis. Although the term "developmentalism" wouldn't be properly used for the next decades, Cristóforo Muniz' administration would have a similar approach dealing with the effects of the crash of 2008, focusing on the internal market in order to substitute the undervalued trade routes.