Reduced Inequalities

Since the beginning of the present decade, and not withstanding a slight revival recorded in the majority of countries in 1984, Central America has been sunk in the deepest economic depression and shaken by the most serious political upheavals of the last half-century. The climate of instability and confusion which is prevailing seriously hampers the search for solutions to political as well as social and economic problems, yet the search for such solutions is the greatest challenge facing Central Americans today, and one which cannot be put off any longer.

In Latin America due importance has not been attached to the problems deriving from population growth, and although it is not a matter of promoting a new malthusianism, attention should be drawn to the challenges with which the countries of the region will be faced if current population trends continue in the next few decades. Suffice it to point out that should this happen, Latin America would have more than 700 million inhabitants by the end of the century and over 6 000 million in a hundred years’ time; that is, its population would be 20 times as big as at present, and one and half times as large as the entire population of the world today.

The public in general, and oiten even economists themselves, feel confused by the wide variety of proposals for solving the international crisis that have been put forward in academic and political circles.

In its simplest expression, this document is based on three premises. The first of these is that planning is capable of playing a major role in consolidating the State, considered as the political manifestation of each Nation. The second is that this role may be shared out within the organizational or administrative structure of each State, and that it is desirable for it to be organized by a highranking institutional body, which, for the purposes of this document, will be generically termed the NPB or National Planning Body. The third premise is that the role played by ILPES in the near future — as at one and the same time a multilateral agency of the United Nations system and an intergovernmental agency— will have as its overall framework the priorities identified in the region in respect of the issues covered by the first two premises.

This article explores the structural heterogeneity and the insufficient dynamism of Latin American societies, with special reference to the use they have chiefly made of the surplus.

The developing countries’ payment crisis has reached dramatic proportions, and cannot be overcome without large-scale action compassing the two variables that determine payments capacity: the capacity to possess or create liquid assets and the capacity to generate foreign exchange income, especially by means of external trade. The measures proposed in the present article relate to the establishment of an international currency based on primary products, which could be administered by the International Monetary Fund, and to the adoption by the developing countries of a more persuasive strategy in negotiations on access to markets. To implement the measures in question the developing countries would need to assume an active role, inasmuch as they would have to turn their own natural resources and import markets to account, manipulating them as bases for negotiations. The payments problems of the developing countries are too acute to be resolved through mere international cooperation commitments or through the adoption of world programmes, which by themselves will never improve the developing countries’ bargaining power. This two-front attack would, however, improve the power of the developing countries to negotiate debt maturities and terms of payment and would also considerably lighten the burden of the adjustment programmes which the said countries are adopting.

Using the experiences of Japan as a basis, the author examines a number of today’s major planning issues. He begins by outlining the characteristics of planning during and after the war, when the State exercised considerable control over the economic process. Once this period had passed and the functioning of the market had been re-established, the complex State/market relationships characteristic of all mixed economies emerged. Both the State and them arket have important roles to play, and each influences the other. The economy as a whole has objectives it must meet in order to provide satisfactory conditions for its members, but these objectives are often contradictory; the main function of planning is to lend them greater consistency and efficiency from a strategic standpoint.

The background, development and prospects of the concerted effort being made by the Latin American countries as expressed in the Cartagena Consensus and Mexico’s role in this effort are discussed in this article from a foreign policy perspective. It is neither a quantitative technical analysis of the debt problem nor a systematic review of the renegotiations of recent years and those currently in progress, Instead, an attempt is made to explore those elements of international economic performance, trade and finance which led the Latin American countries to meet at Cartagena. It goes on to analyse the basic content of the proposals made at that meeting and at Mar del Plata and Santo Domingo, to discuss how the other parties to the negotiations (governments of developed countries, international banking authorities and multilateral financial bodies) have reacted to these proposals, and, finally, to describe what the outlook for the overall Cartagena process appears to be as of mid-1985.

While it is true that some of the causes of the present situation in Latin America are of external origin and that there is little possibility that Latin America will be able to change them, it is no less true that, if the region is to grow it must determine what action its members are ready to take together in order to increase their independence. This article’s main argument is that Latin America must strengthen its arrangements for regional co-operation and integration and make better use of its own resources; ideas, projects and processes have been set in motion for this purpose and must be given real political support.

The task of presenting a general picture of Latin American agriculture is complicated by the diversity of national situations, which is reflected in major agricultural differences among countries. However, some important aspects of the structure of agriculture and changes in recent decades are common to almost all the countries; it is thus possible to compose an overall picture which, without oven-generalizing, throws light on the situation and the prospects for the region’s agriculture.

In national industrialization processes, direct foreign investment, together with the incorporation of new technologies, enables the modernization of industry to go hand in hand with the promotion of its development.

This article discusses some issues which ought to be taken into consideration in the preparation of a new industrialization strategy that will make it possible to deal with internal disequilibria and face up to the predictable international situation in the coming years. The first section expounds the concept of linkage, which is regarded as the most significant of the attributes differentiating the productive and social structures of the advanced countries from those of the countries of the Latin American region. In the former, the characteristic feature is organic and interdependent growth of the various parts of the industrial complex, and in the latter, a transplantation of fragments of that structure which leaves in external hands complementary aspects of crucial importance for the functioning of the whole.

As we prepare this edition of CEPAL Review, our editorial team wishes to express its deep sorrow upon the death of Oscar Altimir on 27 September in Santiago. His departure is deeply felt by the ECLAC community, especially by those of us involved in the production of CEPAL Review. We acknowledge the intellectual legacy of Altimir, who directed this publication between 1996 and 2008, succeeding its first two directors: Aníbal Pinto Santa Cruz (1986–1996) and founder Raúl Prebisch (1976–1986). This editorial is intended to convey our heartfelt homage to Altimir’s academic figure and distinguished career as a leading development economist in the region and as one of the most prominent thinkers of the Economic Commission for Latin America and the Caribbean (ECLAC) over the past 40 years.

In order to examine the decisive role played by transnational private banks in the Bolivian economy in recent years, the author considers the concept of external dependence. After analysing in his introduction the usual meanings of this concept as referred to external vulnerability and foreign participation in the economy, he concentrates on what he calls Voluntary dependence’, where such dependence is generated or increased due to the actual economic policy adopted by the State.

The great problems of the Latin American countries, which are manifested most clearly in the poverty, malnutrition, unemployment and underemployment of a considerable part of the population, have made it necessary to rethink the role of agriculture in the process of development.

The concept of integration dates back a long time, although it has been used as an economic term only since the Second World War, when it was used to explain one of the objectives of the programmes for the reconstruction of Europe. Since its distant origins, its meaning has changed according to circumstances, which justifies an exploration of its various meanings in order to give them a sense appropriate to the present circumstances.

The travelling conditions of all the city-dwellers of Latin America are made more difficult by high levels of congestion, but the lower-income strata are in a particularly negative position, since they are usually limited to the use of buses and thus have to spend a larger proportion of their time and money on travelling than the better-off sectors of the population.

This article gives a brief overview of the post-war international m onetary system and its main characteristics, w ith special em phasis on the aspects which subsequently created difficulties. It shows how the system developed and identifies the events which led to the international m onetary crisis at the beginning of the 1970s. It describes the exchange arrangem ents w hich arose as a consequence o f the crisis and analyses the conditions in which such arrangem ents can be effective, the developing countries’ possibilities of using them, and the effects on those countries and on the dem and for international liquidity by the public and private sectors. With regard to this latter aspect, it stresses the increase in the private sector’s intervention role in the exchange m arkets and the influence of this increase on the international generation and transm ission of disequilibria. It then goes on to the attem p ts to reform the m onetary system and the am endm ents to the Articles of Agreement of the International M onetary Fund and their effects on the developing countries.

Since 1973, the Latin American countries have had to adjust to a world economy and a world trade situation which are characterized by slow growth and instability in the central countries.

The form of development which particularly pre-dominates in the largest countries of the region has been repeatedly criticized in various CEPAL studies because of its tendency towards a concentrated distribution of income, the persistence of extreme poverty, incapacity to absorb the entire labour force in a productive manner, growing external vulnerability, and increasing loss of national capacity to manage the economy.

A large proportion of the Latin American countries have sought and are still seeking to incorporate into their development plans and the design of their economic policies elements whereby they seek to correct or minimize some of the most obvious internal disparities in growth rate, well-being and modernization between the various areas or regions which make up the nation.

Now, as 1983 begins, there are few remaining doubts about the gravity of the international economic situation. Not since the Great Depression of the 1930s has the world known such a serious and prolonged crisis. Almost no society has managed to escape its pernicious effects, for the problems suffered by the countries of the developed North and the developing South, those of the socialist East and the West are all similar. The fact that this crisis affects all societies, whatever their ideological orientation, political system or economic model, is the best demonstration that we are in the presence of a universal phenomenon involving all nations.

In recent years, increasing attention has been paid to the changes that have been taking place in the rural environment, particularly those relating to the peasantry of Latin America.

For a number of years CEPAL has conducted an inter-agency project financed by UNDP and UNICEF on critical poverty in Latin America, in which systematic consideration is given to the characteristics of poverty and policies for overcoming it are suggested.

Full understanding of the nature of the present crisis calls for an interpretation which is at once broad enough to cover both the centres and the periphery and deep enough to penetrate beyond the superficial manifestations of the problem to the very heart of its causes.