Volume 43, Number 170, July-September 2012


revista164 Latin America’s wealth lies in its natural resources and the profitability of its companies. In the context of the current crisis, strategic alliances and the organizational administration of the public and private sectors present an opportunity for governments interested in achieving economic development and reducing poverty. The drop in earnings for big businesses, general bankruptcy among Spanish banks and the panorama of uncertainty in Europe create a situation that favors large European consortiums that are looking to expand in the Latin American region.

Once again, foreign investors are interested in a region that can provide the opportunity to expand their subsidiaries as the parent companies face liquidity problems. Spanish consortiums took advantage of the banking crisis and privatization in Latin America to expand in the region and position themselves in the gas, oil, communications and banking sectors in the 1990s. Their political and economic interests included profitability offered by governments that thought that privatization and the minimalist State were the solution to hyperinflation and external debt in the lost decade.

Twenty years later, the economic panorama of Latin America has improved. Even macroeconomic indicators like gdp and poverty reduction have proved to be surprising. It could be said that at the beginning of the twenty-first century, Latin America was at the end of a long process of recurring crisis. The brutal drop in salaries and restrictive monetary policies facilitated a democratic change with governments interested in improving their populations’ interests and also in recovering profit-earning, privatized companies that were not looking to invest in their host nations. Even today, the economic process has been protected from the global economic crisis. Still, that does not explain why these countries are insulated from economic fragility, after having sunk further into a primary export model in the past decade, reinforced by the financial markets.

Steps taken to recover privatized companies from the hands of foreign investors in Argentina and Bolivia have been presented as a threat to the European model. Recently, Argentina recovered Yacimientos Petrolíferos Fiscales (ypf) from the hands of Repsol, an example for other countries in the region. The international context and severity of the European crisis, as well as generalized bankruptcy in the Spanish banking system, have made impossible threats towards the Argentinean national project. On the contrary, foreign investors are flooding Latin America.

At the time of publication, Mexico was facing the election of a new government. In many settings, a variety of voices have called for sustained gdp growth, increasing employment and a Financial Reform where development banking goes hand in hand with the State and small, medium and large businesses. The Mexican Academy of Political Economy (amep) and the Development Theory Seminary from the unam Economic Research Institute have presented to the political parties in the race the results of a discussion on the elements necessary for a development project. In the framework of democracy, wealth is principally based on the right of all members of society to the opportunity for a job. Will Mexico learn from economic policies in other Latin American countries?

One of the challenges of the Revista Problemas del Desarrollo(Development Issues Journal) is to rescue the debate on economic development from the Latin American vision, including culture and the overall view of a race interwoven between the encounter between two antagonistic worlds and civilizations. How to plant the seeds for development in Latin America, the continent of the open veins?

Marina Recalde’s article, “Energy Resources in Argentina: Analysis of Income,” reminds us that economic development in a variety of countries is affected by the use of natural resources and the country’s natural supplies. Energy resources are a fundamental piece in the foundation of growth. Argentina meets this condition, as it is a country that is highly dependent upon hydrocarbon resources. One characteristic of energy resources is that they produce income, which creates controversy surrounding the origin and distribution of this income among the various agents involved. In recent years, income resulting from exploiting hydrocarbons has risen, centering the discussion on who is the owner of these resources. This discussion is key to formulate any energy policy, especially when it is linked to development policy.

Pablo Manzanelli and Martin Schorr, in their article “Foreignization and Industrial Economic Power in Argentina,” describe how the collapse of the Convertibility Regime in 2002 sharpened the existing bias in Argentina’s industrial sector between foreign firms and local capital companies. The text analyzes the principal characteristics of the foreignization process of elite manufacturing companies that took place in the 1990s. During this decade, there was a notable process of de-nationalizing local firms and a surge of a few large foreign companies. The process of de-nationalization was accompanied by domestic factors that favored it, such as: (a) the implementation of horizontal practices, that is, commercial and financial liberalization, signing of bilateral treaties, establishment of guarantees and benefits for foreign investors; (b) the governmental decision to support Mercosur. As the authors indicate, this stage was accompanied by a considerable increase in economic concentration and, in that context, the greater predominance of foreign capital in top businesses.

The article “Systems of Banking and Production in Argentina” by Victor Ramiro Fernández, Carolina T. Lauxmann and Julio C. Tealdo alludes to Social Systems of Production. In Argentina, the financial banking system and the social system of production has a high degree of endogeneity (foreignization of capital ownership in the financial banking system), as well as a level of concentration (de-centralization) and reproductive dynamics, where the valuation of surplus is part of the reproductive dynamic of the post-crisis financial banking system of the 1990s, a time period when the financial banking system and the productive system displayed an endogenous, de-centralized and dynamic accumulation pattern. Likewise, the banking system does not show an improvement in the efficiency of the local economy. This phenomenon is evident in the degree of control that foreign capital banks exercise over assets, loans and deposits.

In the article “Socio-Environmental Development Index for the State of Bahía,” authors Leonardo Ventura de Araújo, Elaine Aparecida Fernandes and Patrícia Lopes Rosado aim to establish a measure of quality of life in the region, by observing the non-inclusion of environmental variables in the un’s Human Development Index. The article attempts to associate variables that describe the socio-economic and environmental conditions of municipalities in the state. To relate these factors, the methodology used the Environmental Conditions Indicator (eci), developed for each municipality with the goal of getting closer to the level of human development. They also used the Socio-Economic Environmental Development Indicator (idsa in Spanish), which was created to describe living conditions in the municipalities. It is important to note that the idea of including environmental variables relates to the Human Development Index, according to Sachs (2007), which is a factor in the quality of life for the population.

In “Economic Growth and Industrial Policy in Mexico,” Cuauhtémoc Calderón and Isaac Sánchez conclude that during the period under study, the gdp only grew an average of 2.1% annually, while gdp per capita grew 0.46%. Between 1982 and 2008, an annual average of 354,306 jobs were created in the formal economic sector. The rate of manufacturing gdp growth from 1982 to 2009 was an annual average of 1.88%. Finally, precarious work went from 13 million people to a little over 19 million. The text explains how the manufacturing sector is the economic area that most generates the most virtuous cycles, in keeping with Adam Smith. Nicholas Kaldor’s ideas are also referenced.

In his article, “Emerging Countries: The Marxist-Institutionalist Controversy,” Sergio Ordóñez reveals that there is a central problem in the social sciences regarding the role that the agent-structure relationship plays in societal development. The current importance of the agent-structure problem refers to the series of changes that have resulted from the crisis and that have produced an expectation for a new phase of capitalist development. In other words, the current phase is characterized by a technological-productive base and arises from a political-ideological context. Later on, it is thus necessary to study the action framework of social subjects to understand why the predominant development route was not produced in countries classified as “lagging.” The author proposes a hypothesis that countries that have achieved an industrial scope have done so based on social institutional tenets that differ from neoliberalism, and have developed knowledge capitalism processes.

In his essay, “Economic Competition in Mexico. A Necessary Debate,” Rogelio Huerta debates the conditions of economic competitiveness, and establishes an economic reality idealized by perfect competitive markets. The intensity of competition does not pressure markets downwards. Earnings margins may fall for other reasons not linked to price reductions. External opening did not reduce prices, but rather reduced the quantities sold by businesses, obligating the companies to maintain or raise prices in order not to lose earnings. Productivity in Mexico increased for two reasons: because the cost of imported supplies fell when tariffs dropped, and because workers were fired. Now, the greatest levels of competition do not necessarily increase productivity. Rather, high levels of productivity provoke an increase in market competition. Finally, the author mentions that the use of pro-competition policies from national commissions in a variety of countries has not been demonstrated to bring about price reductions, and as such, it has not been shown that these policies imply a benefit for the consumer.

The journal closes with five reviews: “An Introduction to the Economies of Nature,” from Rosario Pérez Espejo, Sophie Ávila Foucat and Alonso Aguilar Ibarra, with the review written by Monika Meireles; “Fiscal Federalism in Mexico. A Proposal to Strengthen State Public Finance,” from the author Nicolás Mandujano Ramos, written by Aderak Quintana; “Poverty: Concepts, Measurement and Programs,” coordinated by Verónica Villarespe Reyes and written by Bernardo Ramírez; “Female Labor: The New Inequalities,” from Marina Chávez Hoyos, reviewed by Diana Atempa; and finally, “Public Banking, the Financial Crisis and Development,” a book coordinated by Alicia Girón, Eugenia Correa and Patricia Rodríguez, reviewed by Patricia Duarte.

Alicia Girón
Journal Editor
unam, June 2012

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 48, Number 191, October-December 2017 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
CP 04510, México, D.F. Tel (52 55) 56 23 01 05 and (52 55) 56 24 23 39, fax (52 55) 56 23 00 97, www.probdes.iiec.unam.mx, revprode@unam.mx. Journal Editor: Alicia Girón González. Reservation of rights to exclusive use of the title: 04-2012-070613560300-203, ISSN: pending. Person responsible for the latest update of this issue: Minerva García, Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, Coyoacán, CP 04510, México D.F., latest update: Nov 13th, 2017.
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