In this paper, Ocampo summarizes some of the most significant conclusions leading to proposals for a new development agenda. He points out that the Asian crisis was probably the worst reverse in the process of financial liberalization, since it revealed that this could be the source of profound macroeconomic instability when it does not occur within a suitable institutional framework.

Similarly, although trade and direct foreign investment have grown significantly in recent years, the 'promised land' of high growth rates is increasingly perceived as a mirage. In Latin America, the region that has advanced the most in the reform process, annual growth during the 1990s reached just 3.2%, significantly less than that of the 1950s and 1970s (5.5% per year).

Within this debate in favour of a new development agenda, two issues stand out. The first is the call for a new balance between the market and public interest, in the sense that markets can receive powerful benefits from those measures tending to help them to function suitably within a competitive framework and guaranteeing fair participation in the fruits of development. The second issue is that rather than being restricted to state actions, 'public policies' should be understood as any organized form of action that pursues objectives of collective interest.

Other issues included in the proposals for a new development agenda include the following:

1. A more balanced form of globalization based on a genuine respect for diversity: Although globalization responds to dynamic economic and technological processes, there is no doubt that it can be shaped. Currently, its most worrying feature is how incomplete and imbalanced it is, reproducing long-standing asymmetries in the world economy and creating new ones. Because of this, a network of regional institutions, which respect the global order but act with greater autonomy, constitutes the best option for building international institutions that are at once more solid and balanced.

2. A broad view of macroeconomic stability and the role of countercyclical policies: Within economic discourse, the concept of macroeconomic stability has undergone significant changes over the past two decades and, as a result, should strive for a broader definition of stability. In this sense, there are two important lessons to be learned. The first is that real instability is very expensive, and the second is that private sector deficits are as costly as public sector imbalances. Managing countercyclical macroeconomic policies to counteract these behaviours is no easy task, given that globalization imposes objective limitations on the autonomy of national policies. This makes it all the more important for this management to be based on highly credible institutions and macroeconomic policy instruments.

3. Macroeconomic policies are not enough: The role of productive development strategies: The idea that the combination of an open economy and stable macroeconomics would by themselves spur economic growth has not been borne out. Examples of other decisive factors include insufficient institutional development or scarce accumulation of human capital. Several theories have underlined the need for a strategy of productive development as the fundamental ingredient for an open, dynamic developing economy. Similarly, establishing development strategies that aim to stimulate innovation and build on complementary features of production seems to be a path that the region's open economies cannot fail to take.

4. Improved social linkages: In economic terms, social progress can be viewed as the product of three basic factors: long-term social policy that improves equity and guarantees inclusion; economic growth that generates a suitable number of quality jobs; and a reduction in the structural heterogeneousness of productive sectors, thus narrowing gaps between different economic activities and agents. Given the undeniable relationship between economic and social development, it is essential to design integrated policy frameworks, the author emphasizes.

5. Broader goals: The paper concludes with the observation that experts have realized that the economic system must be subordinated to broader social objectives. It is important to encourage social solidarity that has steadily lost ground among the populations of developed and industrialized countries. In this sense, the 'public sphere' should be understood as the meeting point for collective interests, rather than a synonym for State activities.

The paper 'Rethinking the Development Agenda' is available on ECLAC's website. For more information, please contact ECLAC Information Services, Tel: (56-2) 210-2149/210-2380, Fax (56-2) 208-0252/228-1947, e-mail: dpisantiagoeclac.cl