Economic Integration in Latin America Progress and Problems

Abstract

E CONOMISTS and business men in Latin America are becoming increasingly conscious of the need, in the competitive world of today, to break down the traditional barriers of nationalism and rivalry that have separated the republics from each other for 150 years. None of the early dreams of political unity has ever been realised, and none is likely to be realised so long as moves towards integration depend solely on politicians. The economic approach has more chances of success if only because it involves economic policy-makers, industrialists, and traders, whose interests are other than those of the politicians. The Latin American Free Trade Association (LAFTA), the Central American Common Market (to give it its short name), and the Inter-American Development Bank, are the creations of economists and planners, and they are proving to be powerful forces making for a process of integration that may eventually give the name 'Latin America' some real economic significance, which it does not have today. The efforts of the Latin Americans to overcome by integration the obstacles to economic expansion that are inherent in their isolation from each other-no less than in their dependence on the high-income countries of the Northern hemisphere-have been largely inspired by the European Economic Community, and to a smaller extent by the European Free Trade Association. Integration is in fact a fashionable concept, although the sceptics believe that the difficulties involved in integrating such widely disparate economies as those of the Latin American republics are far greater than those that were involved in forming the European Economic Community. It is possible that when the Treaty of Montevideo was signed in 1960 and 1961 1 the difficulties that lay ahead were under-estimated; it must have been apparent, however, that integration would be a slow process, for the Treaty is modest in its aims an.d attempts no more than to set up a free trade association, with the suggestion that integration might be