Volume 44, Number 174,
July-September 2013
Colombia: Commercial Integration
and Trade Imbalances in the Pacific Basin
Jaime Torres
MANUFACTURING EXPORTS FROM LATIN AMERICAN COUNTRIES, 1970-2010 ( ...continuation )

Figure 14 shows the global value index of manufactured products calculated by the World Bank, which exhibits a clear growth trend, indicating that in 2011 the average value of manufactures was 61% higher than in 1980. Projections for 2025 are also positive, forecasting appreciation in industrial production, a trend that would allow nations with broad industrial platforms to not only gain higher revenue for commercial production but also to generate more jobs, technological development and social stability.


Figure 14. Global Value Index of Manufactures 1980-2011 and Projections for 2012-2025 (1980=100)


Source: World Bank, Development Prospects Group, published on June 12, 2012, index calculated using US dollar values, http://data.worldbank.org/data-catalog/MUV-index, consulted on July 20, 2012.


DETERIORATING PRODUCTIVITY IN LATIN AMERICA VS. THE EXPORT MINING SECTOR

The difficulties that thousands of Colombian companies face in improving their local market share and entering international commerce are shared by the majority of Latin American nations. In a recent study by the Inter-American Development Bank (Pagés, 2010: IX), the President introduced the following situation regarding productivity levels in the sub-continent:

From a comparative global perspective, slower growth in Latin America (LA) is due to slower growth in productivity [...]. Productivity in LA is only at half of its potential [...]. Low and slow productivity, rather than obstacles to the accumulation of factors, helps explain low revenue in LA [...], a region where there are a few very productive companies and many very unproductive. [...] As productivity in the industrial sector fell, so did the number of employees working in the sector.

This evaluation highlights how a large number of people live off of informal activities with low productivity. The majority live in cities and their share in total employment is over 50%. Once the industries created following the Second World War no longer captured labor and their share in national gdp fell in the 1980s, the services sector absorbed this population, generally in activities with low productivity.

The low productive contribution of millions of poor urban and rural residents in Colombia is practically a historical constant that has existed for over four centuries since the Spanish colonial era, when the native populations were expropriated and decimated, guaranteeing that their descendants would have minimal access to public goods such as education or property. This exclusive regime was also reproduced by the independent Republic (Torres, 2010) and sincere efforts to overcome it, through industrialization following the Second World Ware, were frustrated before reaching fruition. The high concentration of agricultural, industrial and financial property was not only left alone, but actually increased (Kalmanovitz, 2010), alongside unemployment, under-employment and violence. The explanation for why the industrialization strategy initiated at the beginning of the twentieth century came to a halt and actually led to the Colombian elite capturing an even higher portion of revenue resides in this type of concentrated, elitist and exclusive culture (Misas, 2002). This is what the Argentinean economist Aldo Ferrer (eclac, 2010) has argued: “Our challenge in solving the dilemma of development in a global world is greater here than in other places, because we must respond to current issues while also repairing the damage of history.”

The Gini coefficient calculated by the oecd with 2011 data for 36 countries in the group, including Brazil, Argentina and Colombia as observers for Latin America, lists Colombia in the last place, with a Gini index of 54.8 (79% higher than the oecd average of 32.9), but also far from countries right above it. Chile is in 35th place with a Gini coefficient of 48.0, while Mexico ranks 34th with 46.3, Turkey 33rd at 39.8 and the US in 32nd with 36.8 (oecd, 201313 ). The fact that Colombia’s Gini coefficient is so high not only indicates unequal income distribution, but also confirms the way in which broad swaths of the population’s social rights are not met. It is also a sign of the nation’s low productivity. Growth in labor productivity between 1990 and 2011 was substantially lower than overall Latin America and the oecd average, and even below low-income countries in the organization, including Mexico, Chile and Turkey (oecd, 2013).14 The fractured social structure of Colombia and resulting low labor productivity have hindered the achievement of better results in competing with the countries of the Asian Pacific.

13 Organization for Economic Cooperation and Development, oecd Economic Surveys: Colombia 2013 — © oecd 2013.

14 oecd Economic Surveys: Colombia 2013 — © oecd 2013, labor productivity per hour worked.

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 2018 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,
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