Can the “industrialization by invitation” strategy, followed by most underdeveloped countries, be successful whether on national or regional bases? Does an industrialization process, predominantly managed these days by multinational corporations, promote development when development is conceptualized not as a process of quantitative expansion of the goods and service output, but as a process of structural change and capital cum knowledge accumulation that moves a nation closer to such social goals as the fulfillment of basic needs, full employment, and increase in socioeconomic equality? Can the regional hybrid integrative system, containing both the elements of laissez faire philosophy and the dirigisme in respect to new industrial activities, take care successfully of the reasonably equal intercountry distribution of the gains from an economic integration scheme? These are the three basic questions raised in this thoughtful study of the first decade of the experiences of the Andean Common Market, written by Professor Mytelka of Carleton University in Canada, a political scientist and also a competent economist.
Mytelka’s answer, supported by the impressive amount of quantitative evidence, numerous interviews with the major regional and national policy makers, and the detailed analysis of the official Andean Common Market documentation, is negative in respect to all three points. “Industrialization by invitation” leads to the establishment of a second-hand copy of a quasi-industrial society. Letting multinational corporations do the job increases the host country’s or region’s technological dependence and sharpens social inequalities. Finally, the mixed integration scheme augments conflicts between multinational corporations’ private goals and the regional public’s needs to equalize the distribution of gains and losses attributable to the integration process. In sum, the basic objectives of a self-reliant development strategy are not fulfilled either at regional or national levels.
Multinational corporations—the author insists—are largely responsible for the disappointing outcome of the Andean integration attempts. “Indeed,” she concludes, “the history of the Andean Group is studded with crises whose roots lie in the efforts of multinational firms to reverse regulating policies, undermine the rationality of industrial plans, and thus mold the integration process to changing corporate needs and interests” (p. 190).
Since the subtitle (The Multinational Corporation, Technology and Andean Integration) clearly delineates the field covered by the study, one can hardly complain that Professor Mytelka concentrates on the multinational corporations and technology transfer in the Andean region and their perverse effect upon that integration scheme. Some other factors sharing responsibility for the trials and the tribulations of that common market might have deserved, however, more attention than they receive. Two are worth mentioning: the first is the onset of the long-term economic stagnation in the industrially advanced countries, which may be traced back to the year in which the Cartagena Agreement was signed (1969). The second is the degree of absolute technological backwardness in the region at the time of the birth of the Andean Common Market. These two factors made regional “industrialization by invitation” under regulation (Decision 24) particularly painful and difficult.
