special issue: report on neoliberal restructuring || introduction

IntroductionAuthor(s): Elena AlvarezSource: Journal of Interamerican Studies and World Affairs, Vol. 37, No. 3, Special Issue:Report on Neoliberal Restructuring (Autumn, 1995), pp. i-ivPublished by: Center for Latin American Studies at the University of MiamiStable URL: http://www.jstor.org/stable/166330 .

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Introduction

THE recent Summit of the Americas held in December in Miami reiterated the need to preserve and strengthen the

community of the Americas; the need to promote prosperity through economic integration and free trade; and the need to guarantee sustainable development and conserve our natural environment for future generations. All this is important because it helps to establish new criteria to assess the social and economic development in the Americas.

In recent years, with differences in timing, intensity and duration, most of the countries in Latin America have under- gone far-reaching processes of economic reform and restructuring. While significant progress has been made in many nations regarding macroeconomic stability and market liberalization, poverty and social disintegration have increased.

Indeed, many observers of Latin American development contend that today's poverty is primarily the result of two related phenomena: the severe economic crisis that the Latin American countries suffered during the early and mid-1980s, and the drastic economic adjustment measures subsequently applied to alleviate the effects of the crisis. In particular, the adjustment policies have had a severe impact upon the poorer segments of the population. Social and political disintegration worsened even as the number of elected governments increased in the 1980s. The expansion of illicit activities and localized forms of violence in several countries of the region are an indication of this.

The persistence of poverty and increasing social disintegration demand attention to the shortcomings of neoliberalism, the creation of the intellectual basis for additional or alternative strategies, and the construction of politically viable policy options. To address some of these questions, the North-South

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ii JOURNAL OF INTERAMERICAN STUDIES AND WORLD AFFAIRS

Center of the University of Miami invited a number of noted economists and social scientists to a conference on Develop- ment Strategy after Neoliberal Economic Restructuring in Latin America. The conference was organized around the following six themes: 1) Social, Political, and Economic Conditions: A Historical Perspective and Thoughts for the Future; 2) Trade and Economic Development; 3) Employment, Income Distribution, and Market-Oriented Reforms; 4) Markets and Rural Development Strategies; 5) Economic and Political Effects of the Underground Activities; and 6) Sustainable versus "Successful" Economic Growth in Latin America. The following articles are a sample of the papers presented in that conference.'

Osvaldo Sunkel asks: "Is the Chilean 'Miracle' Sustain- able?" Chile has been the most successful of the Latin American countries in promoting an export-oriented market strategy and, as the author reminds us, enthusiasm for this approach remains high. Yet he has thoughtful points to make on the limits to an export strategy that is highly dependent upon natural-resource based products. Natural resources are finite. How long can such a strategy, whose success is at least partly dependent upon deferred social costs, be sustained?

Manuel Agosin and Ricardo Ffrench-Davis examine a different aspect of the neoliberal approach when they explore the links between "Trade Liberalization and Growth: Recent Experiences in Latin America." The authors begin by outlining the strategies for outward-oriented growth that have been most prevalent in Latin America, with special attention to the case histories of three countries in particular: Chile, Mexico, and Bolivia. They next tur their attention to the strategies that have proved so successful among some of the more dynamic Asian economies to determine how, and in what regard, these are either similar to, or different from, the Latin American approach. Finally, they attempt to draw "lessons" from a compari- son of these development strategies.

However, development does not take place in a vacuum. Economic growth and development are highly dependent upon the capital flows needed to finance production, techno- logical change, and the strategies needed to become competi-



ALVAREZ: INTRODUCTION

tive in the international marketplace. To this end, Stephany Griffith-Jones and Barbara Stallings trace the history and current situation of the "New Global Financial Trends: Impli- cations for Development." What have been the major sources of external funds for development to the various regions of the Third World over the past 25 years? How have these capital flows changed over time, in both composition and direction? How have these changes affected Latin America, and what does this portend for future development?

All this emphasis upon outward-oriented growth and market strategy comes at a cost. Ann Helwege takes up one of the more salient costs in her account of "Poverty in Latin America: Back to the Abyss?" The author describes the degree and rates of poverty in Latin America during the 1980s in order to show how these have begun to change in the early part of the 1990s, particularly in those countries that have begun to resume an upward growth trajectory. Like Sunkel, however, she asks if these changes are sustainable and explores some ramifications that may affect the future.

Finally, my own article on "Economic Development, Restructuring, and the Illicit Drug Sector in Bolivia and Peru: Current Policies," tries to identify the interrelationships between restructuring and the existence of the illicit coca drug sector in Bolivia and Peru, as well as discuss current policies. The illicit drug sector may have served to ameliorate the costs of restructuring, to the extent that it created employment opportunities. However, to the extent that it affects indirectly the profitability of other licit sectors, the illicit sector may have made the sectoral and macroeconomic adjustment somewhat more difficult.

Elena Alvarez Guest Editor

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NOTES

1. An edited volume based on the conference papers and other papers prepared on this theme is forthcoming by Elena Alvarez and Sherry Tross, entitled Development Strategy after Neoliberal Eco- nomic Restructuring in Latin America (Boulder: Lynne Rienner Publishers for the North-South Center, 1996).



special issue: report on neoliberal restructuring || introduction

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