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The challenge of industrial competitiveness

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Author: Buitelaar, Rudolf - Mertens, Leonard UN symbol.: LC/G.1792-P p. 49-67 December 1993

Description

Latin American manufacturing industry has undergone various changes in recent years. It has registered a favourable performance as far as exports are concerned, but production and investment have grown only slowly in a context of sluggish recovery of domestic demand and greater foreign competition. Other features are greater specialization in natural resource-based intermediate goods characterized by the importance of economies of scale, relatively long lead times for the heavy investments required, and the presence of privatized and transnational enterprises. At the same time, there are signs of the emergence of a varied range of competitive manufacturing activities of a scale which is as yet too small to be clearly reflected in the aggregate indicators. This article reviews some of these cases and concludes that it is necessary to establish a favourable environment for this type of activities: to this end, higher productivity needs to be promoted at the enterprise level. Finally, from a sectoral point of view, emphasis is placed on the need to continue to promote exports, adding new products and exploring new markets, while it is also noted that competitiveness on the domestic market needs to be raised, as this market continues to be the main source of demand for industry in the region.