CEPAL Review - Volume 1989, Issue 37, 1989

The international crisis of indebtedness with transnational banks arose from a number of causes, of which the three main ones are the following: the negative repercussions of the world economic situation, the effects of the conduct of borrowers, and the consequences of the behaviour of the main transnational banks. The first two of these have been the subject of exhaustive analysis, but this has not been so in the case of the third cause, mainly because of the lack of concrete detailed information. This article sets forth the new ideas which emerged from the Interregional Project on Transnational Banks undertaken by the United Nations Centre on Transnational Corporations, the executing agency for which was the Joint ECLAC/CTC Unit on Transnational Corporations. This project was directed by the author of the present article.

Since the onset of the debt crisis, officials in both creditor and debtor nations have declared that commercial banks would resume making new loans to developing country borrowers once the debtors completed their macroeconomic adjustments and restored their creditworthiness. However, the commercial banks’ long-term business interests may no longer coincide with Latin America’s debt service and investment requirements.

In order to make the problem of external debt compatible with that of the economic growth of Latin American countries, the adoption of a “growthoriented adjustment” strategy has been suggested. Since both the International Monetary Fund and the World Bank are called upon to play an important role in this strategy, there is a need to review and co-ordinate the conditionalities imposed by both institutions. This need is related to the fact that the current deficits in the balance of payments of the Latin American countries are structural, and therefore must be dealt with in the long term; on the other hand, it has been proven repeatedly that short-term macroeconomic adjustment affects the pattern of long-term growth.

This article analyses one of the fundamental categories of ECLAC thinking: the economic integration of Latin America and the Caribbean. It suggests a different approach to Latin American integration, taking into account past experiences and current circumstances within and outside the region. In accordance with this view, integration must become a political strategy for Latin Americans. This would mean involving the largest possible number of social actors in the task, especially the democratic political community, thereby strengthening the possibility of bringing their democratic principles to fruition. Hence integration would become a part of national aspirations and political movements.

The Great Depression of the 1930s and the Second World War engendered an inward-directed growth process in Latin America, the continuance of which was later spurred by the important interests that grew up in connection with the region’s industrial production. The exhaustion of the import substitution process at the national level triggered a new intellectual effort to seek appropriate development strategies; thence arose the interest in economic integration which acquired great impetus from 1960 onwards. Integration enjoyed considerable success in terms of the expansion of trade among the countries participating in the various schemes, and mechanisms were soon added which helped to save foreign exchange in the financing of regional trade payments.

The institutional environment of international economic co-operation is based on harmony between national and international interests. Conflicts between those interests can be expected to arise, however, in a period of major industrial transition marked by changes in international competition and in production technology, such as that of recent years. The factor of power, so often neglected in the discussions of international economic co-operation, comes up distinctively when a country tries to change the international rules to maintain its competitive position as an industrial power. This article analyses in particular the relations between Brazil and the United States in this respect.

The author of this article contends that, as a consequence of the debt crisis, macroeconomic goals and social goals have become relatively dissociated from one another and that the latter have tended to be reduced to the provision of special attention to the needs of the poorest groups in the population.

The economic crisis suffered during the present decade by the Latin American countries reduced the wages and incomes of many families, with a consequent deterioration in the living conditions of the affected population. Homes which had previously met the minimum conditions for ensuring the social integration of their members sank into poverty, thus increasing the heterogeneity of this phenomenon.

The process of privatization has an impact on various macroeconomic variables. This article presents an analytical framework for studying that impact: it is a conceptual study which can be applied to different actual situations.