SOCIAL CHANGE IN LATIN AMERICA IN THE EARLY 1970s(1)(excerpts)
ECLA
1. THE ECONOMIC CONTEXT, THE INTERNATIONAL CONJUNCTURE, AND THEIR
IMPLICATIONS FOR NATIONAL STYLES OF DEVELOPMENT
Explorations of the patterns of growth and change in Latin America
have long focused on the gap between what is really happening and
what should be happening according to the values and theoretical
preconceptions of the explorers.
They have generally concluded, for many different combinations of
reasons, that the identifiable real trends are neither acceptable nor
viable over the long term, but they have managed to find grounds for
expecting major positive changes in those trends, whether by means of
enlightened policies to be embarked on by the dominant forces in the
societies or by means of a transformation of these forces emerging from
the trends themselves.(2)
Variations on these themes, in fact, predominate in the series of
chapters on Latin America in the Reports on the World Social Situation
published by the United Nations.
Nevertheless, the patterns of growth and change that have so often been
described and deplored have persisted, changing quantitavely and in the
relative prominence of certain features rather than qualitatively, and
showing a great deal of resilience and adaptability beneath apparent
instability and precariousness. They have brought Latin America, or at
least the larger countries comprising most of its population, to
situations that can be labelled "semi-development" accompanied by
pronounced and persistent structural heterogeneity.(3)
That is, per capita income levels are now midway between those
characteristic of Europe and those characteristic of Africa and Asia,
with a few countries within the lower part of the European income
range.
Sizable and growing proportions of the national populations, except in
a few of the smaller and more predominantly rural countries, are
participating in "modern" productive and service activities and "modern"
patterns of consumption.
By 1972 the share of agriculture in the gross domestic product, for the
region as a whole, had fallen to 15.4 per cent and the share of
manufacturing had risen to 25.4 per cent.(4)
The State, in most of the countries, manages to support an increasingly
varied range of "modern" public services and infrastructural investments
that are important to the livelihood and the expectations of the greater
part of the population.
At the same time, however, the majority in almost all the countries
continues to engage in activities of relatively low productivity and
low bargaining power, ranging from technologically intermediate
labour-intensive activities fully integrated, however disadvantageously,
with the more highly capitalized "modern" activities, down to the
manifold forms of ill-paid personal services, subsistente activities,
and concealed or open unemployment.
The groups at the lowest levels of productivity, bargaining power and
incomes continue to be concentrated in agriculture, as the contrast
between its share of employment -still over 40 per cent for the region
as a whole- and its share of the product demonstrates, but similarly
disadvantaged groups persist or even grow in size in the urban
activities, most obviously in the services sector, but also in
manufacturing and construction.
The differential expansion in their present form of the more "modern",
relatively high-productivity activities, at the foreseeable rates of
growth and with the foreseeable technological and capital inputs, does
not hold out much hope that they will help to overcome structural
heterogeinity by absorbing the greater part of the population now
subsisting outside them.
In fact, structural heterogeinity seems to be self-reinforcing both
economically and politically. The further growth "modern" consumer goods
industries, housing construction and services depends on the size and
purchasing power of the upper-income minorities rather than on the
scanty purchasing power of the rest of the population.
The structure of production is rooted in and draws its sustenance from a
highly uneven income distribution, but this income concentration, by the
logic of the system, cannot generate a high rate of capital
accumulation.
Price policies (particularly for domestically-produced foods), the
functioning of the tax system (if not its intention) and weak bargaining
power aggravate the disadvantages of the groups in the lower reaches of
the economic structure and compel them to subsidize the consumption
levels of the "modern" groups, so that their incomes may be even lower
than their productivity would justify -although the urban low-income
groups can counteract this to some extent by securing compensatory
subsidies and services from the State.
Moreover, once the industrial sector becomes important enough for
national policy to set out to promote exports of manufactures, an
additional reason for income concentration appears, since labour costs
must be kept competitively low.
Arguments such as the above, here presented in a very simplified
fashion, are by now well known. The reality of structural heterogeneity
is clear enough. Some diagnoses continue to place their main emphasis on
insufficient dynamism of economic growth and insufficient accumulation;
others on over-rapid population growth and insufficient investment in
raising of the quality of "human resources"; still others on the
pervasive dependency of Latin American development patterns on controls
and stimuli from the world centres.
The following questions have come to the fore:
First, does economic growth with structural heterogeneity lead
inevitably to a developmental impasse or societal breakdown because of
increasing polarization of incomes and life-styles, increasing
impoverishment of large masses of the population, inability to offer
productive employment to an increasing part of the labour force or
vulnerability to changes in the international conjuncture? In other
terms, is it non-viable over the long term as well as unacceptable in
terms of values?
Second, can structural heterogeneity be overcome or kept within
manageable dimensions without the achievement of radically different
styles of development, supported by different distributions of power and
participation in the societies and incorporating new priorities and
mechanisms for production, distribution and consumption?(5)
Third, are styles of development capable of overcoming structural
heterogeneity achievable at the national level (except at prohibitive
costs), in view of the places of the Latin American countries in the
world order, national endowments of human and natural resources, and
internal structures of power and consumer demand?
Fourth, if alternative styles of development are not within reach and if
the non-viability of economic growth with structural heterogeneity
cannot be conclusively demonstrated, can one realistically envisage
policies within the confines of prevailing styles of development that
will gradually reduce the dimensions of structural heterogeneity and
alleviate the extremes of poverty and misuse of the human potential
associated with it?
During the late 1960s and early 1970s, more national regimes than
previously moved toward endorsement of the diagnoses that have answered
the first of the above questions in the affirmative and the second in
the negative.
At the regional level, this trend found expression in intergovernmental
declarations that judged the record of the 1960s with considerable
harshness, despite the undoubted gains in the per capita product, and
called for a bold rethinking of the meaning of development and how it
might be achieved.(6)
Recent experience, however, has not provided encouraging answers to the
third question. Despite the declarations made, public action continued
along conventional lines in most countries, with the expansion of
certain social services responding more to the momentum of what had
previously been done than to any over-all development strategy.
Certain regimes formally endorsed innovatory attacks on structural
hetergeneity through a broad combination of employment policies, but did
not act decisively to apply the combination as envisaged.
A few national attempts at more radical changes in the styles of
development failed to cope with the contradictory pressures and
resistances thus generated, while other attempts continue to tackle the
problems with a reasonable degree of success, but without achieving an
incontrovertible breakthrough to the human-oriented development
aimed at.
In the very recent past, while the debate has continued and a good deal
of ambivalence or vacillation can be detected in national objectives as
well as actions, the predominant trend in governing circles has seemed
to be towards renewed confidence in the viability of the prevailing
style of development, or resignation to the absence of a politically and
economically viable alternative.
This trend leads logically, on the one hand, to a preoccupation with
means of bringing the whole range of economic and social policies into
closer correspondence with the efficient functioning of the style and
of repressing or diverting incompatible demands from within the
societies, and, on the other, to a secondary preoccupation with
initiatives aimed at finding an affirmative answer to the fourth
question posed above, through compensatory social services and
redistributory mechanisms compatible with the style.
The achievement of relatively favourable economic growth rates, which
have been over 6 per cent annually for the region as a whole since the
late 1960s has provided an objective basis for the trend towards greater
confidence, and the achievement of remarkably high rates of growth in
the value of exports since 1971 further bolstered this trend.
Previously unfavourable terms of trade for raw material exports
-agricultural products as well as minerals- were reversed, and some
countries also made appreciable gains in exports of manufactures.
The "internationalization" of the economies came to be looked on with
more complacency than previously, and the previous emphasis on import
substitution and economic nationalism began to fall into disfavour.
National experiences, of course, have continued to differ widely, since
not all countries have shared in the favourable growth rates, and the
regional average is heavily influenced by the exceptionally rapid growth
of the largest country, Brazil, where confidence in the viability of a
renovated and dynamic version of the prevailing style has been
strongest.
(Rates of growth in the English-speaking Caribbean countries
deteriorated during the early 1970s, so that per capita incomes have
stagnated or even declined.)
The partial renewal of confidence in the viability of continued economic
growth with structural heterogeneity and greater international openness
faces a formidable array of external and internal reasons for insecurity,
quite apart from the phenomena of social polarization and poverty, but
up to late 1973 it was arguable that these factors really affected the
acceptability of the prevailing style, in terms of national autonomy
and the quality of life, more than its viability.
Then a new challenge, the energy crisis, appeared quite suddenly to join
these factors in a manner calculated to upset previous expectations, by
enhancing the potentialities of a few countries while bringing the
viability of the prevailing style once more accutely into question for
many others.
The shock has been worldwide, but the Latin American situation of
"semi-development" means that the implications of the crisis differ in
important respects from those in the high-income industrialized
countries as well as from those in the poorer, predominantly rural,
parts of the third world. The factors of somewhat longer duration can
be summed up thus:
(a) The squeeze between the inflow of external resources (loans and
grants to Governments, private investments) and the outflow of
debt amortization payments and remittance of profits, with the
associated balance-of-payments difficulties, has chronically
threatened to bring economic growth to a halt.
The Latin American countries have contracted public debts on
relatively unfavourable terms; in 1970 the coefficient of debt
servicing to total indebtedness was around 15 per cent for Latin
America as a whole, compared with slightly over 6 per cent for the
remainder of the third world.
In 12 countries of the region external public debt servicing in
1970 amounted to more than 10 per cent of the value of the exports,
and in 3 countries (Argentina, Mexico, Uruguay) it was over 20 per
cent. (7)
At the same time, withdrawals of profits from private investments
produced a rising negative balance on private capital flows
throughout the 1960s: -4,100 million U.S. dollars in 1960-64 and
-5,264 million in 1965-69.
This squeeze, however, has affected the individual countries to
quite different degrees, being most severe in those with sluggish
export expansion.
Some of the most dynamically growing countries -Brazil, in
particular- have sharply reduced the ratio of debt servicing to
total exports, while others, such as Mexico, have reconciled a
consistently high ratio with a creditable rate of economic growth
over a long period. In a few countries -notably Venezuela- the ratio
is much too low to amount to a serious problem.
(b) The trends of external private investment, dominated by
multinational corporations and now containing a relatively small
component of resource transfer from abroad, have set in motion a
well-known process of denationalization of national industries.
(Only 17 per cent of total private investment by the United States
in Latin America in the period 1957-65 was financed out of resources
originating in the United States).
This process, however, is not radically incompatible with the
prevailing style, as long as national economic autonomy is not an
over-riding objective, and in most of the larger countries the State
has deliberately exerted a countervailing power, assuming control of
key industries, sources of energy, and transport.(8)
(c) The series of world monetary crises and the tactics of the world
centres in trying to protect their currencies and improve their
balance of payments have naturally been prominent among the motives
for alarm concerning the future, but in view of the favourable
export trends they do not seem to have interfered seriously with the
prevailing style of development through 1973.
The industrialized countries have presumably exported inflationary
pressures to Latin America along with the rest of the world, but
although the countries experiencing relatively rapid inflation since
the early 1960s or before have continued to suffer from this
problem, the decelaryion in Brazil and acceleration in Argentina,
Chile, and Uruguay have derived more from domestic policies and
problems than from the international conjuncture.
In most other countries, while price rises have accelerated and this
has exacerbated internal social tensions, rates of inflation
continue much lower than in the countries mentioned above, and have
not demonstrably interfered with economic growth.
(d) Rapid population growth and urban concentration, combined with the
spatial concentration of industrial growth and urban "modernization"
under the increasing dominance of the automobile have enormously
increased the scale of certain problems that have been repeatedly
described during the past two decades:
the high costs and insufficiencies of urban infrastructure,
the growth of "marginal" settlements, crime and delinquency,
and pollution of air and water.
However, these trends have not had the catastrophic consequences
sometimes predicted. The huge urban agglomerations of today function
badly, with manifold tensions, crises and assaults on the well-being
of their people, but it is not demonstrable that they function worse
or have more unmanageable crises than did the smaller agglomerations
of twenty or thirty years ago.
The costs of concentrated urban growth to the State are undoubtedly
very heavy, but it is not clear whether such costs would be more
bearable with different patterns of distribution of population and
economic activities.
As will be discussed below, present evidence casts doubt on the
forecasts of differentially rapid growth of low-income under-
employed "marginal" strata overwhelming the cities, although the
proportion of urban population living in the various types of
ecologically "marginal" sub-standard shelter is certainly growing.
It remains an open question how far present urban growth trends can
continue, or whether they can continue indefinetely without becoming
non-viable for economic, political and environmental reasons.
The rate of growth of localities with 20,000 or more inhabitants was
65 per cent greater in the 1960s than in the 1950s, will be at least
65 per cent greater in the 1970s than in the 1960s, and will
continue on an ever-larger scale during the 1980s as the population
base expands, even if the rate changes and urban growth is
distributed over a wider network of cities.
During the 1970s the cities will grow by about 75 million
inhabitants, 40 million of whom will be absorbed by cities that will
have passed the one million mark by 1980. In any case, the patterns
of concentrated urban growth seem to be compatible with or even
favourable to indefinite continuation of the prevailing style of
development. Their negative aspects could be considered as costs
which can be kept within bearable limits by planning but cannot be
evaded. A readiness to accept still higher costs of this kind in the
interest of economic growth has been evident in the receptivity of
governing circles to the potential transfer of highly polluting
industries from countries unable to tolerate their further growth.
(e) While it is too early to assess the eventual impact of the energy
crisis with any confidence, it promises to bring about a radical
change in the conditions for continuation of the prevailing style
of development, both through its consequences for the world economic
order and through its direct repercussions within the countries.
A few countries with an export surplus of petroleum (including some
of the poorer "relatively less-developed" countries) should find
themselves in a better position than before, with a choice of
continuing along the path of economic growth with structural
heterogeneity or mobilizing resources for innovative value-oriented
styles of development without unmanageable conflicts or
unenforceable austerity.
Other countries in which production and consumption can be brought
into balance with a reasonable effort will have to give more
attention than hitherto to priorities for energy use and
exploitation of additional resources, but need not confront drastic
immediate changes in the combination of factors affecting their
style of development, other than the changes in the world economic
order.
Still, other countries with dynamic industrial growth and a wide gap
between domestic production and consumption may find drastic changes
in the style of development unavoidable, in a context of stubborn
societal resistance to such changes and declining capacity to
finance compensatory measures. Many of the smaller countries of the
region, producing little or no petroleum, face a more difficult
future even if prices for their main agricultural exports remain
favourable.
The present chapter cannot go further into this complex question with
its many unknown quantities, but one aspect must be singled out because
of its multiple repercussions on the patterns of social change.
In the larger countries in which structural heterogeneity is most
pronounced and the "modern" urban sectors most important, the automobile
has become increasingly dominant as the most dynamic sector of industry,
as the supporter of a wide range of ancillary economic activities, as
the focus of the consumption aspirations of the growing middle- and
upper-income strata, and as the main determinant of spatial patterns
of city growth and infrastructural investment.(9)
It is symptomatic that the very rapid population growth of the largest
cities has not been accompanied by any general increase in the density
of human occupation of space; in a good many cities density has
diminished.(10)
The automobiles, along with urban land speculation and other factors,
has encouraged the cities to sprawl over the countryside, transforming
within a few years their previously compact and centralized settlement
patterns, changing upper-class residential preferences from central
locations to suburbia.
Any serious threat to continuing increase in automobile ownership and
use thus not only affects the livelihood of an important part of the
urban labour force and the consumption aspirations of the strata in
which purchasing power is concentrated, but also places a major
additional strain on the capacity of the cities to continue to function
and grow.
________________________________________________________________________
(1) See ECLA, "Social Change and Social Development Policy in Latin
America" (United Nations Publication, Sales No. E.70.II.G.3), and
"Human Development and Social Change in Latin America", chapter I
of "Latin America and the International Development Strategy: First
Regional Appraisal" (E/CN.12/947/Rev.1), 10 June 1973.
(2) Gunnar Myrdal, however, has combined a negative evaluation, in
terms of human values, with a conclusion that "perhaps the most
likely possibility would be the continuation of the present trends",
with "neither evolution nor revolution". ("The Latin American
powder keg", Appendix to "The Challenge of World Poverty: A World
Anti-Poverty Programme in Outline", Allen Lane, The Penguin Press,
1970.)
(3) The term "structural heterogeneity" refers to situations of wide
differences in productivity or "modernity" between as well as within
sectors of economic activity, but accompanied by complex ties of
interchanges, dominance and dependence within a national socio-
economic "structure", as opposed to presumed "dualistic" situations
in which two socio-economic structures -"modern" and "traditional"
or "primitive"- co-exist in a national territory with only limited
interchanges and little influence on each other.
(4) See tables 4 and 5 in chapter II, "Economic growth", in
E/CN.12/947/Rev.1, op. cit. Details concerning recent economic
trends summarized later in this section can be found in the same
chapter.
(5) Problems of identification of "real" and "preferred" styles of
development and of establishing criteria for viable and acceptable
styles are discussed in "Report on a Unified Approach to Development
Analysis and Planning" (E/CN.5/477), 25 October 1972, and an ECLA
research project is now exploring the implications of alternative
styles of development for the Latin American countries. See also
Oscar Varsavski, "Proyectos Nacionales: Planteo y estudio de
viabilidad" (Buenos Aires, Ediciones Periferia S.R.L, 1971); and
Marshall Wolfe, "Development: Images, concepts, criteria, agents,
choices", ECLA, ECONOMIC BULLETIN FOR LATIN AMERICA, XVIII, 1 and 2,
1973.
(6) See, in particular, "The Quito Appraisal: A review, adopted at the
fifteenth session of ECLA as resolution 320(XV), of the progress
made in the first two years of the International Development
Strategy" (United Nations/ECLA, 1973).
(7) See chapter VI, "External Financing", in E/CN.12/947/Rev.1, op. cit.
(8) "...at least half of Brazil's major industrial enterprises using
advanced technology and attaining high rates of productivity in such
fields as electric power, the extraction and refining of petroleum,
iron and steel production, petrochemicals, etc. are dominated by
State capital, and the tendency is for these enterprises to expand
at least as fast as the other half of the country's leading
industries, where foreign capital is dominant. Thus, in at least one
of the major countries of Latin America, 'modern' activities are
not synonymous with dominance by foreign capital, and the same is
probably also true at least in Mexico, Argentina and Peru (since
1968). Furthermore, the presence of State capital in the 'leading
sector' is no accident, but the result of a policy put into practice
by many Latin American countries with the aim of not allowing
foreign capital to take over the exclusive conduct of the
industrialization process". (Paul Singer, "Urbanizacion, dependencia
y marginalidad en America Latina", Martha Schteingart, Comp.,
"Urbanizacion y dependencia en America Latina", Buenos Aires,
Ediciones SIAP, 1973.)
(9) Average monthly production (including assembly) of automobiles
between 1966 and 1972 increased from 11,000 to nearly 17,000 in
Argentina; from 11,000 to more than 36,000 in Brazil; and from
7,000 to 14,000 in Mexico. (Table 45 in United Nations "Monthly
Bulletin of Statistics", January 1974)
(10) According to a recent study, four national capitals for which data
are available have grown as follows:
_______________________________________________________________________
Bogota Lima Mexico City Santiago
Area in square km.
1950 42.1 108.7 175.7 155.7
(1954)
1960 73.6 142.1 411.7 288.8
(1959)
1970 136.1 254.8 742.2 294.5
Density (population
per sq. km.)
1950 14,737 10,899 16,080 8,692
(1954)
1960 17,278 10,366 12,104 8,336
(1959)
1970 18,560 9,963 11,768 9,438
_______________________________________________________________________
Source: Ligia Herrera, "Los sitios de ubicacion y el crecimiento de las
ciudades", 'Notas de Poblacion', CELADE, I,
April 1973.
_______________________________________________________________________
rrojas research unit/1998
BACK
|
