Economic Bulletin for Latin America Vol. VII, No. 1 Santiago, Chile, February 1962 Page 1. The economic development of Latin Ameriea and its principal p.oblems, by RaúJ Prebisch 1 2. Inflation and growth: a summary of experience in Latin America 23 3. Latin America's position in relation to world changes in trade policy, by Esteban Ivovicli 53 4. Hidro-electric resources in Latin America: their measurement and utilization 73 UNITED NATIONS The Economic Bulletin for Latin America, published by the Secretariat of the Economic Commission for Latin America, appears twice yearly. The essential purpose of this periodical is to provide a résumé of the economic situation of the region designed to su- pplement and bring up to date the information published in the Commission's annual economic surveys. Apart from this summary, which is to appear in every issue, special articles on different subjects related to the economy of Latin America are also included. The ECLA Secretariat assumes entire responsibility for the Bulletin. Its content —intended for the information both of public officials and of the general reader— was not submitted to the Commission's member Governments before publication. EXPLANATION OF SYMBOLS ! Three dots (...) indicate that data are not available or are not separately reported. v , A dash (—) indicates that the amount is nil or negligible. ji A minus sign (—300) indicates a deficit or a decrease. A space is used to separate thousands and millions (3123 425). A stroke (/) indicates a crop year or a fiscal year, e.g., 1954/55. i An asterisk (*) is used to indicate partially or totally estimated figures. "Tons" and "dollars" are metric tons and United States dollars, respectively, unless otherwise stated. Minor discrepancies in totals and percentages are due to rounding. Price of Vol. VII, No. 1 of the Economic Bulletin for Latin America U.S. $ 1.50; 10/6 sterling; Sw. fr. 6.50 (or equivalent in other currencies) The Bulletin may be purchased from any United Nations sales agent (see back cover) in national currency Subscriptions should be placed either with these agents or with: Sales and Circulation Section Sales Section United Nations European Office of the United Nations New York Palais des Nations U.S.A. Geneva, Switzerland ECONOMIC BULLETIN FOR LATIN AMERICA Published by the Secretariat oj the ECONOMIC COMMISSION FOR LATIN AMERICA Volume VII 19 6 2 UNITED NATIONS UNITED NATIONS PUBLICATION Sales No.: 62.II.G.1 and 62.II.G.4 Table of Contents Page The economic development of Latin America and its principal problems, by Raúl Prebisch 1 Inflation and growth: a summary of experience in Latin America 23 Latin America's position in relation to world changes in trade policy, by Esteban Ivovich 53 Hydro-electric resources in Latin America: their measurement and utilization 73 Latin American Institute for Economic and Social Planning 115 The creation of a United Nations Economic Projections and Programming Centre and the technique of projections 123 The achievement of co-ordination in Latin American trade policy: Relations with the European Economic Community 127 Short-term economic fluctuations in Latin America during 1948 to 1959 167 Report of the Latin American Seminar on Planning (Santiago, Chile, 19-24 February 1962) .... 181 Conference on Education and Economic and Social Development in Latin America (Santiago, Chile, 5-19 March 1962) 193 Economic development and education in Latin America 215 The Economic Bulletin for Latin America, published by the Secretariat of the Economic Commission for Latin America, appears twice yearly with an annual Statistical Supplement from volume V onwards. The essential purpose of this periodical is to provide a resume of the economic situation of the region designed to supplement and, bring up to date the information published in the Com- mission's annual economic surveys. Apart from this summary, which is to appear in every issue, special articles in different subjects related to the economy of Latin America are also included. The ECLA Secretariat assumes entire responsibility for the Bulletin. Its content —intended for the information both of public officials and of the general reader— was not submitted to the Commission's member Governments before publication. In 1962 two bilingual Statistical Supplements were published separately, each with the corresponding table of contents. EXPLANATION OF SYMBOLS Three dots (...) indicate that data are not available or are not separately reported. A dash (—) indicates that the amount is nil or negligible. A minus sign (—300) indicates a deficit or a decrease. A space is used to separate thousands and millions (3 123425). A stroke (/) indicates a crop year or a fiscal year, e.g., 1954/55. An asterisk (*) is used to indicate partially or totally estimated figures. "Tons" and "dollars" are metric tons and United States dollars, respectively, unless otherwise stated. Minor discrepancies in totals and percentages are due to rounding. Price of Vol. VII, No. 2 of the Economic Bulletin for Latin America U.S. $ 1.50; 10/6 sterling; Sw. fr. 6.50 (or equivalent in other currencies) The Bulletin may be purchased from any United Nations sales agent (see back cover) in national currency Subscriptions should be placed either with these agents or with: Sales and Circulation Section Sales Section United Nations European OfiSce of the United Nations New York Palais des Nations U.S.A. Geneva. Switzerland ECONOMIC BULLETIN FOR LATIN AMERICA ^ Published by the Secretariat of the ECONOMIC COMMISSION FOR LATIN AMERICA ^ Vol. VII, No. 1, February 1962 UNITED NATIONS THE ECONOMIC DEVELOPMENT OF LATIN AMERICA AND ITS PRINCIPAL PROBLEMS by Raúl Prebisch I. INTRODUCTION a measure comparable to that obtained by the peoples of the great industrial countries. Hence, the outstanding In Latin America, reality is undermining the out-dated dififerences between the standards of living of the masses ' schema of the international division of labour, which of the former and the latter and the manifest discrepancies achieved great importance in the nineteenth century and, between their respective abilities to accumulate capital, as a theoretical concept, continued to exert considerable since the margin of saving depends primarily on increased - influence until very recently. productivity. Under that schema, the specific task that fell to Latin Thus there exists an obvious disequilibrium, a fact America, as part of the periphery of the world economic which, whatever its explanation or justification, destroys system, was that of producing food and raw materials for the basic premise underlying the schema of the interna- the great industrial centres. tional division of labour. There was no place within it for the industrialization Hence, the fundamental significance of the industrializa- of the new countries. It is nevertheless being forced upon tion of the new countries. Industrialization is not an end them by events. Two world wars in a single generation in itself, but the principal means at the disposal of those and a great economic crisis between them have shown countries of obtaining a share of the benefits of technical the Latin-American countries their opportunities, clearly progress and of progressively raising the standard of living pointing the way to industrial activity. of the masses. The academic discussion, however, is far from ended. The Latin-American countries are thus faced with an In economics, ideologies usually tend either to lag behind immense general problem, embracing a series of minor events or to outlive them. It is true that the reasoning ones which must be defined before embarking on the long on the economic advantages of the international division task of research and practical measures which will be of labour is theoretically sound, but it is usually forgotten necessary if there is a firm intention to solve the problems. that it is based upon an assumption which has been con- It would be premature, in this initial report, to draw clusively proved false by facts. According to this assump- conclusions that would have only the doubtful value of an tion, the benefits of technical progress tend to be dis- improvisation. Admittedly much remains to be done in tributed alike over the whole community, either by the the Latin-American countries, both in learning the facts lowering of prices or the corresponding raising of in- and in their proper theoretical interpretation. Though comes. The countries producing raw materials obtain many of the problems of these countries are similar, no their share of these benefits through international ex- common effort has ever been made even to examine and change, and therefore have no need to industrialize. If elucidate them. It is not surprising, therefore, that the they were to do so, their lesser efficiency would result in studies published on the economy of Latin-American their losing the conventional advantages of such exchange. countries often reflect the points of view or the experience The flaw in this asumption is that of generalizing from of the great centres of world economy. Those studies the particular. If by "the community" only the great cannot be expected to solve problems of direct concern industrial countries are meant, it is indeed true that the to Latin America.. The case of the Latin-American coun- benefits of technical progress are gradually distributed tries must therefore be presented clearly, so that their among all social groups and classes. If, however, the con- interests,, aspirations and opportunities, bearing in mind, cept of the community is extended to include the periph- of course,e, the individual differences and characteristics. ery of the world economy, a serious error is implicit in may be adequately integrated within the general frame- the generalization. The enormous benefits that derive from work of international economic co-operation. increased productivity have not reached the periphery in The task ahead is thus considerable and the responsi- bility heavy.