Table Of ContentINTERNATIONAL POLITICAL ECONOMY SERIES
General Editor: Timothy M. Shaw, Professor of Political Science and Inter
national Development Studies, and Director of the Centre for Foreign Policy
Studies, Dalhousie University, Nova Scotia, Canada
Recent titles include:
Pradeep Agrawal, Subir V. Gokarn, Veena Mishra, Kirit S. Parikh and Kunal Sen
ECONOMIC RESTRUCTURING IN EAST ASIA AND INDIA: Perspectives
on Policy Reform
Solon L. Barraclough and Krishna B. Ghimire
FORESTS AND LIVELIHOODS: The Social Dynamics of Deforestation in
Developing Countries
Kathleen Barry (editor)
VIETNAM'S WOMEN IN TRANSITION
Jorge Rodriguez Beruff and Humberto Garcia Muniz (editors)
SECURITY PROBLEMS AND POLICIES IN THE POST-COLD WAR
CARIBBEAN
Jerker Carlsson, Gunnar Kohlin and Anders Ekbom
THE POLITICAL ECONOMY OF EVALUATION: International Aid Agencies
and the Effectiveness of Aid
Steve Chan
FOREIGN DIRECT INVESTMENT IN A CHANGING GLOBAL POLITIC AL
ECONOMY
Paul Cook and Frederick Nixson (editors)
THE MOVE TO THE MARKET? Trade and Industry Policy Reform in
Transitional Economies
O. P. Dwivedi
DEVELOPMENT ADMINISTRATION: From Underdevelopment to
Sustainable Development
John Healey and William Tordoff (editors)
VOTES AND BUDGETS: Comparative Studies in Accountable Governance in
the South
Noeleen Heyzer, James V. Riker and Antonio B. Quizon (editors)
GOVERNMENT- NGO RELATIONS IN ASIA: Prospects and Challenges for
People-Centred Development
George Kent
CHILDREN IN THE INTERNATIONAL POLITICAL ECONOMY
David Kowalewski
GLOBAL ESTABLISHMENT: The Political Economy of North/ Asian Networks
Laura Macdonald
SUPPORTING CIVIL SOCIETY: The Political Role of Non-Governmental
Organizations in Central America
Gary McMahon (editor)
LESSONS IN ECONOMIC POLICY FOR EASTERN EUROPE FROM
LATIN AMERICA
David B. Moore and Gerald M. Schmitz (editors)
DEBATING DEVELOPMENT DISCOURSE: Institutional and Popular
Perspectives
Juan Antonio Morales and Gary McMahon (editors)
ECONOMIC POLICY AND THE TRANSITION TO DEMOCRACY: The Latin
American Experience
Paul J. Nelson
THE WORLD BANK AND NON-GOVERNMENTAL ORGANIZATIONS:
The Limits of Apolitical Development
Archibald R. M. Ritter and John M. Kirk (editors)
CUBA IN THE INTERNATIONAL SYSTEM: Normalization and Integration
Ann Seidman and Robert B. Seidman
STATE AND LAW IN THE DEVELOPMENT PROCESS: Problem-Solving and
Institutional Change in the Third World
Tor Skalnes
THE POLITICS OF ECONOMIC REFORM IN ZIMBABWE: Continuity and
Change in Development
John Sorenson (editor)
DISASTER AND DEVELOPMENT IN THE HORN OF AFRICA
Howard Stein (editor)
ASIAN INDUSTRIALIZATION AND AFRICA: Studies in Policy Alternatives
to Structural Adjustment
Deborah Stienstra
WOMEN'S MOVEMENTS AND INTERNATIONAL ORGANIZATIONS
Sandra Whitworth
FEMINISM AND INTERNATIONAL RELATIONS
David Wurfel and Bruce Burton (editors)
SOUTHEAST ASIA IN THE NEW WORLD ORDER: The Political Economy
of a Dynamic Region
Latin America's
New Insertion in the
World Economy
Towards Systemic Competitiveness
in Small Economies
Edited by
Ruud Buitelaar
Chief, Industrial Development Unit
Economic Commission for Latin America and the Caribbean (ECLAC)
Mexico
and
Pitou van Dijck
Associate Professor of Economics
Center for Latin American Research and Documentation (CEDLA)
University ofA msterdam
First published in Great Britain 1996 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS
and London
Companies and representatives
throughout the world
A catalogue record for this book is available
from the British Library.
ISBN 978-1-349-24722-6 ISBN 978-1-349-24720-2 (eBook)
DOI10.1007/978-1-349-24720-2
First published in the United States of America 1996 by
ST. MARTIN'S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth A venue,
New York, N.Y. 10010
ISBN 978-0-312-12823-4
Library of Congress Cataloging-in-Publication Data
Latin America's insertion into the world economy: towards systemic
competitiveness in small economies : edited by Ruud Buitelaar and
Pitou van Dijck.
p. em. -(International political economy series)
Includes bibliographical references and index.
ISBN 978-0-312-12823-4 (cloth)
I. Latin America-Economic policy. 2. Competition-Latin America.
3. Competition, International. 4. Foreign trade promotion-Latin
America. I. Buitelaar, Ruud. II. Dijck, Pitou van. III. Series.
HCI25.L35365 1996
338.98-{!c20 96-2581
CIP
Selection, editorial matter and Chapter 16 © Ruud Buitelaar and
Pitou van Dijck 1996
Chapter I © Pitou van Dijck 1996
Chapters 2-15 © Macmillan Press Ltd 1996
Softcover reprint of the hardcover 1st edition 1996 978-0-333-64527-7
All rights reserved. No reproduction, copy or transmission of
this publication may be made without written permission.
No paragraph of this publication may be reproduced, copied or
transmitted save with written permission or in accordance with
the provisions of the Copyright, Designs and Patents Act 1988,
or under the terms of any licence permitting limited copying
issued by the Copyright Licensing Agency, 90 Tottenham Court
Road, London W1P9HE.
Any person who does any unauthorised act in relation to this
publication may be liable to criminal prosecution and civil
claims for damages.
10 9 8 7 6 5 4 3 2 I
05 04 03 02 01 00 99 98 97 96
This book is dedicated to the memory of
Fernando Fajnzylber
Contents
List of Tables IX
List of Figures Xl
List of Maps xii
List of Abbreviations xiii
Notes on the Contributors xv
Foreword by Gert Rosenthal xviii
Acknowledgements xx
Maps xxi
1 Towards a New Insertion in World Markets: An Introduction
Pitou van Dijck
2 The Gains from Trade Reconsidered 17
Hans Linnemann
3 The Exchange Rate as an Export-Stimulation Mechanism 31
Hans Visser
4 Structural Adjustment in the 1980s: Stimulus or Setback
for Private Investment in the Industrialisation Process? 59
Valpy FitzGerald
5 The Scope for Industrial Policy in a Free-Trade Environment 75
Jose Tavares de Araujo Jr
6 Export Processing Free Zones as an Export Strategy
for Central America and the Caribbean 85
Teresa S. Weersma-Haworth
vii
viii Contents
7 The Export Processing Free Zone of San Bartolo in
EI Salvador 95
Geske Dijkstra and Carlos Rivera Aleman
8 The Historical Experience: Growth Accounting 105
Andre A. Hofman
9 Social Development during Periods of Structural
Adjustment 123
Rolph van der Hoeven and Frances Stewart
10 Trade Policy and Changing Trade Patterns 139
Cees van Beers
11 Chile: from Early Liberalisation to 'Second-phase
Export-led Growth' 151
Anne Theo Seinen
12 Industrial Competitiveness and Government Policies
in Uruguay 163
Anton Timpers
13 The Competitiveness of Manufacturing Firms: the
Case of Venezuela 175
Carla Macario
14 Export Promotion in Costa Rica 191
Geske Dijkstra and Juut van der Wijk
15 The Systemic Weakness of Guatemala's Competitiveness 207
Juan Alberto Fuentes K.
16 Conclusions 225
Ruud Buitelaar and Pitou van Dijck
References 235
Index 249
List of Tables
1.1 The performance of manufacturing industry in
Latin America and Asia, 1985-92 3
1.2 Manufacturing production and exports in selected countries 4
1.3 Manufacturing production and international trade in
selected countries, 1985-92 8
1.4 Trade liberalisation in selected countries, 1985-92 10
=
1.5 REERs in selected countries, 1980-92 (1980 100) 11
4.1 Shares of private investment in GDP in selected countries,
1970-90 (%) 63
4.2 Relative prices and public investment in selected countries 65
6.1 Incentives offered in EPFZs 91
7.1 Some indicators of EPFZ San Bartolo, 1976--92 99
7.2 Some indicators of EPFZs in selected countries, 1991 100
7.3 Exports from EPFZ San Bartolo, 1977-91 101
7.4 EPFZ San Bartolo, value added and exports, 1976-90 101
7.5 Employment in EPFZ San Bartolo, 1976--90 103
8.1 Labour inputs, 1950-89 (average annual compound
growth rates) 111
8.2 Capital inputs, 1950-89 (average annual compound
growth rates) 114
8.3 GDP and JFP, 1950-89 (average annual compound
growth rates) 116
8.4 Explaining economic growth, 1950-89 117
9.1 Urban unemployment and wages in selected countries,
1980-91 126
9.2 Allocation ratios in adjusting countries, 1981-90 132
9.3 Tax structure, 1981-90 135
10.1 Shares of manufacturing production in GDP (1) and of
manufactured exports in total exports (2) in selected
countries, 1970, 1980 and 1990 140
10.2 Contributions of the five largest manufacturing export
sectors to total manufactured exports in five Latin
American countries, 1968-70, 1978-80 and 1988-90 145
10.3 Contributions of the five largest manufacturing export
sectors to total manufactured exports in three Asian
countries, 1968-70, 1978-80 and 1983-5 146
ix
x List a/Tables
10.4 RCAs in twelve major Latin American manufacturing
export sectors, 1988-90 147
Uruguay
12.1 Import tariffs, 1980-93 (%) 168
12.2 Real effective protection for manufacturing industries,
1981 and 1985 (Corden method, %) 169
Venezuela
13.1 Export to output ratios for manufacturing sectors, 1980,
1988 and 1989 (%) 177
13.2 Ten major non-traditional manufactured exports, 1992
(as % of non-traditional exports) 178
Costa Rica
14.1 Effective protection in manufacturing sectors, 1987
and 1993 (Balassa method, %) 198
Guatemala
15.1 Macro-economic indicators, 1980-92 (%) 209
15.2 Traditional and non-traditional exports, 1981-92
(annual growth rates, %) 214
15.3 Export:output ratios in manufacturing sectors, 1989 (%) 216
15.4 Private investment, 1980-91 (%) 218
15.5 Public investment, 1980-92 (%) 220
LIST OF APPENDICES
8.1 Sources of data 119
10.1 ISIC categories 148
