SUNS  4313 Friday 30 October 1998


LATIN AMERICA: ECLAC DEVELOPMENT PARADIGM TURNS 50

Santiago, Oct 28 (IPS/Gustavo Gonzalez) -- The U.N. Economic Commission for Latin America and the Caribbean (ECLAC) has marked its 50^th anniversary by vindicating its role as creator of an economic development paradigm that has held its own for decades.

The ECLAC policy of economic development, derided by the radicalised leftist intelligentsia of the 1960s, has survived the past five decades, although it is still fighting for space in government and
influential business circles.

Founded in 1948 as the UN Economic and Social Council's regional commission, ECLAC has been commemorating its half century of history this week at its headquarters in Santiago, Chile with reflections on the evolution of its thinking.

The commission, headed by Executive-Secretary Jose Antonio Ocampo of Colombia, has been a fountain not only of ideas, but also of political and economic leaders for Latin America, including Brazil's recently re-elected president, Fernando Henrique Cardoso.

In exile in Chile in the 1960s - during Brazil's 1964-85 dictatorship - Cardoso, along with Chilean sociologist Enzo Faletto, came up with the famous dependency theory, which projected Cardoso from the academic world into politics.

The interesting thing is that it has become clear today that Cardoso and Faletto's theory was set within the framework of the line of analysis that ECLAC had been building since its earliest days, under the inspiration of Argentina's Raul Prebisch and other Latin American thinkers.

In the introduction to a book published on the occasion of ECLAC's 50^th anniversary, Ricardo Bielschowsky cites "the structuralist theory of Latin American peripheral underdevelopment" as one of the commission's chief contributions.

Prebisch, who died in Santiago in 1983, was one of the economists to first set forth a development theory for Latin America, based on the peripheral nature of the region with respect to the central economies of the industrialised North.

The normative principle of the birth of ECLAC "is the need for the state to contribute to guiding economic development in the conditions of the Latin American periphery. It is, in short, the Latin American development paradigm," says Bielschowsky.

The Latin America that emerged from World War II in the setting of the Cold War needed its own formulas, not only for relating to the rest of the world, but also for tackling its own internal social and economic problems.

In ECLAC's five decades of history, central ideas have emerged which have marked the approach and emphasis of its theories on the development of Latin America and the Caribbean.

The industrialisation promoted by ECLAC since its founding led its thinking to be identified for years with the import- substitution process which, in the 1970s, entered into a crisis that continued in
the 1980s.

But the book has not yet been closed on the long-running debate on that model. Import substitution, devastated by the winds of free trade and the comparative advantages brought by neo-liberalism, provided the region with economic growth rates that have not been seen since.

In any case, ECLAC's leading thinkers deny that the commission can be identified with a single approach, and maintain that its central ideas have evolved to the rhythm of global and regional changes, without losing sight of the central objective of development.
Thus in the 1950s, state-driven industrialisation was the formula for reinserting the region into the post-war world, with growth, technical progress, job creation and income distribution.

In the 1960s, the aim was to remove the obstacles to industrialisation centred on import substitution in a world in which commodity prices were falling and terms of trade were deteriorating.

Regional integration began to take shape in the 1960s, while negative balance of payments, inflation and unemployment took on a structural character in Latin American countries.

But those first two decades coincided with expansive cycles of the global economy, interrupted by the crisis of the mid-1970s, a forerunner to the foreign debt crisis that led to the "lost decade" of
the 1980s.

In the 1970s, ECLAC proposed a "reorientation of the 'styles' of development toward social homogenisation and diversification in favour of exports," according to Bielschowsky.

In the 1980s, the central ideas were aimed at overcoming the foreign debt crisis through "adjustment with growth," which sought to counteract the impact of economic shock policies on poor sectors.

On the verge of the new millenium, ECLAC's central proposal for the 1990s advocates "a productive transformation with equity" - which continues to entail the double objective of inserting Latin America and the Caribbean into the globalised economy and simultaneously attacking the region's social shortcomings.