“Industrial policy is the mechanism to overcome the lock in that limits manufacturing activity in the region,” the Deputy Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Antonio Prado, said at the inauguration of the Dialogue on Industrial Policy between the European Union and Latin America, which was held on Thursday, April 23 at the regional organization’s headquarters in Santiago, Chile.
The other participants in the opening session of the event organized by ECLAC and the European Commission were Eduardo Bitrán, Executive Vice President of Corfo (Chilean Economic Development Agency) and Didier Herbert, acting director of Enterprise Competitiveness, Industry and Growth Policies at the European Commission’s Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs.
“The high profitability of sectors linked to natural resources and to some services means that most investment is oriented towards these activities, relegating the formation of industrial capital,” Prado explained, underlining the importance of cooperation between both regions in the design and implementation of industrial policies to increase labor productivity and reduce social inequality.
Eduardo Bitrán spoke about Chile’s “industrial policy of intelligent specialization,” which aims to respond to the crossroads faced not only by this South American country but by all the Latin American and Caribbean nations that depend on the exportation of natural resources and have seen a decline in the total productivity of factors in their economies due to the end of the so-called commodities “supercycle.”
“More of the same leads us to stagnation,” warned Bitrán, recalling that “mining represents 60% of Chilean exports, similar to the percentage recorded in 1970.” Chile is not rejecting its natural resources, he said, but “moving from the static comparative advantages linked to natural resources to a phase centered on the incorporation of more knowledge into products and services (dynamic advantages).”
Didier Herbert praised the joint event as an opportunity to deepen bi-regional cooperation on industrial policies, identifying approaches, goals and instruments not only for strengthening productivity and boosting innovation but also for improving job quality.
The European official recalled that the dialogue provides follow-up to the Memorandums of Understanding signed by the European Commission and some of the region’s countries.
The meeting was attended by representatives from Argentina, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Mexico, Panama, Paraguay, Peru and Uruguay, from the Ministries of Industry; Economy; Science, Technology and Innovation; and Production.
Antonio Prado said that “ECLAC is aware of the difficulty of implementing industrial policies in economies such as those of the region, with weak institutions,” but he stressed that “in the last three years we have received and responded affirmatively to requests for support in the design of industrial policy on the part of countries like Argentina, Uruguay, Ecuador and El Salvador.”
“At this time, we are processing similar requests from Bolivia and Panama, among others,” he added.
The event’s conclusions will contribute to the debate during the Europe-Latin America Business Summit, which will take place on June 10, 2015 in Brussels.
