economists, for endorsing ISI instead of the comparatively more successful EOI, it appears history would judge Prebisch and CEPAL more kindly. For the Cepalistas had originally proposed export-led industrialisation as a suitable policy for economic development, but “barriers to Latin American access to U.S markets” 183 resulted in ISI being the second best of all available options. Export-orientated industrialisation just did not make sense for most Latin American countries, as many of them had already accumulated large nonconvertible reserves of foreign exchange from previous primary export booms in the past. They had enough trouble spending their already large foreign exchange reserves, without further increasing their exports. The transition from ISI to EOI in Latin America would have been plagued with difficulties: the performance of the region’s relatively productive imports meant that a significant shift in policy would have required a substantially greater income sacrifice to achieve world-competitive low wage levels via devaluation, a feat made near-impossible due to structural and political obstacles. When considered fully then, it appears that Prebisch’s and CEPAL’s push for ISI was not folly or foolishness, but rather the correct and rational response to the structural obstacles confronting Latin America in the industrialisation process. Moreover, ISI was a partial success in Brazil and Mexico – both countries have used ISI as a base on which to develop their manufactured goods exports. And though the most successful East Asian economies – as well as Mexico and Brazil – primarily pursued an export-led industrial policy, it was in addition to, rather than instead of, import substitution industrialisation. Although the onset of the Latin American debt crisis may have m arked the decline of CEPAL’s influence in the region, Prebisch’s work as its de facto leader for decades was consequential in 183 E.V.K. Fitzgerald, “The New Trade Regime, Macroeconomic Behaviour and Income Distribution in Latin America” in Victor -Bulmer Thomas, ed., The New Economic Model In Latin America and its Impact on Income Distribution and Poverty (New York: St. Martin’s Press, 1996), page 51.
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