CEPAL Review - Volume 1985, Issue 26, 1985

At its twentieth session, held in Lima in April 1984, the Economic Commission for Latin America and the Caribbean decided, inter alia, that at the 1985 session of the Committee of the Whole one of the main items should be “the examination of those pivotal aspects of long-term economic and social development policy which could serve as sources of inspiration for meeting the challenges posed to the countries of the region by the changes in the international economy”.

It goes without saying that it is a source of great pleasure and emotion to be back here in what I continue to regard as my home, beside my dear friend Norberto González, in whose capable hands the institution now rests, and Dr. Raúl Prebisch, to whom I owe so much and whose opinion I value so highly. I am also very pleased and moved to be at this meeting for which we all worked so hard, which we were preparing so hopefully throughout the past year, and which is now a reality through the generous presence of all those attending.

Taking a down-to-earth view of the probable evolution of the main economic conditioning factors affecting the countries of the region, especially the external debt, the author sketches the broad outlines of a strategy for stimulating medium- and long-term development. As regards the external debt he forecasts an increasingly conflictive situation, to the point at which its seriousness will lead to the acceptance of more flexible proposals by the creditor banks and countries. The conflicts will themselves hasten the historical process and help to generate the situations and actors that will strive to relieve the present stifling situation.

A part from its intrinsic value, this article has the added merit of providing a straight forward presentation of a prominent German scholars views on Latin American industrialization. It is divided into four chapters. The first two outline the main interpretations of this process from the 1930s up to the present, while the last two address the central issue of the modification of the predominant industrialization model. The author takes a critical view, not only in terms of a long-term historical perspective, but also of the policies implemented during recent years in response to the crisis, which are generally marked by “stabilization without creativity” and the hope of resuming economic growth with the help of direct foreign investment.

During the three decades leading up to the present crisis the growth of the product, employment and the level of investment in Latin America reached a very high rate, but the process of accumulation had two important defects, if compared to the United States in the period 1870-1910. First, its greater dependence on the exterior, both on direct foreign investment and on external financing and, second, the lesser relative importance of local private investment in comparison with State investment. Both these features illustrate the relative weakness of local private business in the process of capital accumulation.

After outlining some of the most harmful effects of the present crisis, the writer describes two theoretical ways out of it: the liberal capitalist and the social democratic. Although the second way seems to him more propitious for the future development of the countries of Latin America, he argues that even this way will be inadequate unless it is accompanied by the establishment in these countries of an independent and self-sustained pattern of development.

One of the most striking features of international economic and political relations in recent years has been the revival of United States power in the Western world. After a couple of decades in which a situation of multipolarity seemed to be consolidating itself in the structure of the relations among the developed capitalist countries, there is once again a concentration of power in the hands of the country which, of course, has been for many years now the main centre of the world economy.

The crisis in Latin America has a sui generis character, the elucidation of which has impelled the author to venture into virtually unexplored fields of in terdisciplinary analysis and to make generalizations covering a variety of national situations. Within this framework, he asserts that many of the central problems which look like conjunctural distortions—shortages of foreign exchange, deficits in public finance—in reality stem from imperfect structural adjustments both in the international economy and within the Latin American countries, the treatment and cure of which will be much more than a short-term matter.