Passive Integration of Latin America in the world economy
Why does Latin America draw few conclusions from the early recognition that the “terms of trade” of developing countries experience a secular deterioration?
- The region - as predicted by Dr. Raúl Prebisch - is not sufficiently adapted to the structural shift in world trade towards the growing importance of manufactured products. In the past three decades, its share in world exports has been decreasing more markedly than that of the remaining developing regions. 80% of Latin American exports continue to be made up of primary products. (Hanbook of International Trade and Development Statistic) Due to insufficient export efforts, the “import-intensive” development style was highly risky for the region. "The OECD Observer," marks that in 1980, at its peak, between 30% and 40% of imports were irrelevant according to the priorities of an industrialization strategy.Only Brazil, due to its internal demand, managed to overcome the mere assembly of consumer goods, including those as complex as automobiles, forming a widely integrated productive apparatus. In the remaining countries, industrialization, due to “import substitution” brought with it high imports of intermediate inputs and capital that could not be replaced from an economic point of view. For what reason, despite the long period of substitution, not Was there a stronger reduction in imports, at least of consumer goods? It should be borne in mind that Latin America has the highest concentration of all world regions in wealth and income. Second, the middle and upper classes adopted, in the early phase of the industrialization process,in the early phase of the industrialization process, the post-war consumption pattern coming from the OECD countries, particularly the United States. Finally, with the “outward opening” (1970s), the interest of these social groups in importing modern consumption was totally imposed. Latin American countries did not react with a cautious adjustment strategy to changes in external conditions. that occurred in that decade, as occurred in the OECD States and the developing countries of Southeast Asia. On the contrary, they intensified their strategy of “growth with debt” that was made possible by the easy financing of the industrialized countries. “growth with debt” strategy,It was based on the assumption that external financing would allow spectacular growth that would ensure the repayment of “cheap money.” The adjustment and restructuring of the productive sector was neglected in favor of “growth by large projects”, which required imports and income from On the other hand, neoliberal conceptions and strategies were assumed, which put aside the problem of development, without even adapting them to national conditions. Monetarist experiments were particularly radical in countries whose "import-substitution industrialization" had long been exhausted, without its supporters having surpassed it.The adjustment and restructuring of the productive sector were neglected in favor of “growth through large projects”, which required imports and high capital inflows. On the other hand, neoliberal conceptions and strategies were assumed, which put aside the problem of development, without even adapting them to national conditions. Monetarist experiments were particularly radical in countries whose “import-substitution industrialization” had long been exhausted, without its supporters having surpassed it.The adjustment and restructuring of the productive sector were neglected in favor of a “growth by large projects”, which required imports and high capital inflows. On the other hand, neoliberal conceptions and strategies were assumed, which put aside the problem of development, without even adapting them to national conditions. Monetarist experiments were particularly radical in countries whose "import-substitution industrialization" had long been exhausted, without its supporters having surpassed it.Monetarist experiments were particularly radical in countries whose “import-substitution industrialization” had long been exhausted, without its supporters having surpassed it.Monetarist experiments were particularly radical in countries whose “import-substitution industrialization” had long been exhausted, without its supporters having surpassed it.
Latin America must face processes of Active Integration in the World Economy
Latin America will continue to develop, mainly to the centers of urban agglomeration; most of them already live in large cities. For this reason, it is even more important to delegate to the communes and regions, a greater number of political and financial competence. This will make it possible to decongest the economic centers with adverse effects of agglomeration and take advantage of the neglected potential in the interior of the country.
Another important point - and which today is a serious obstacle - is the dysfunctionality of "human capital". In the education sector, reforms and investments are necessary to broadly and effectively improve development conditions; to strengthen self-help capacity and willingness to take business risks, as well as to increase productivity. It is a basic education and training and research at the university level with a strong practice orientation. Universities must become nuclei of social and technological development.
The role of the state
State intervention and regulation alone do not guarantee any dynamic evolution. Latin America registers a large number of failures of state management. This is clearly expressed in the self-granting of privileges by the bureaucracy in the mentality prone to abuse of subsidies in the state economic sector and to multiple interventionism, generally irrelevant from the strategic point of view in the distortion in prices through privileges and in the conception of the middle class, often engaged in the expansion of the public sector for its own support.
The problem does not really lie in whether the State should be an “aggressive agent” in the development process, but to what extent it has sufficient management and reform capacity for the transformation of society.
Two months ago a new book by political analyst Andrés Oppenheimer was published, who with great humor and success, entitled it "Chinese Tales" (2005), where he makes a deep and well-documented analysis of the current world situation.
Its main sources were: a) the study by the CIA's Center for Long-term Studies and b) another carried out by one of the main experts in Latin America of the European Parliament, the socialist Rolf Linkohr, “studies that shook the few Latin Americans who they had access to them ”. Both studies reached conclusions diametrically opposite to those heard daily from the mouths of the leaders of Latin America and the Caribbean.
Oppenheimer wonders: “Who was closer to reality? "The CNI and the Linkohr Report with their dark predictions? Or the Latin American Heads of State and ECLAC with their optimistic speeches? There are reasons to distrust both. Aren't CNI studies and the Linkohr Report haunted by the infatuation of rich countries with the Asian boom, the Icelandic miracle, and the awakening of the former Eastern Europe? Was there not a clear purpose to spread optimism in Latin American speeches, from the messianic Venezuelan president Hugo Chávez to his more pragmatic colleagues like Fox? Who to believe? Who was presenting a realistic picture of Latin America? Who is telling tall tales?
