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DEPRESSION AND UNEMPLOYMENT IN LATIN AMERICA A VIEW FROM URUGUAY
  In 1990 the total  level  of  unemployment  in  Latin  American
countries  hit  50  million;  but  by the year 2000 a further 100
million jobs will be  needed.  The  population  of  the  area  is
doubling  in  the  space  of  30 years as opposed to 100 in North
America and 600 in some European countries. The bed produces many
births   but  the  table  little  food  and  with  underdeveloped
agriculture and industry the future looks bleak for  the  end  of
this and the beginning of the next century.
 Some  Latin  American  analysts,  who  look  at  the  persistant
structural imbalances in the economies of some 20 countries south
of the Rio Grande, estimate  that  the  crisis  is  growing  more
severe year on year with a snowballing effect. In this climate of
ideas, journals linked with CEPAL, believe that between 79 and 89
'Latin  America  lost  10%  of economic growth'... it can also be
noted that growth in GDP per capita in the region was negative in
88 and 89 with figures of  -1.5 and -1% respectively. This is due
to the fact that the annual rate of population  growth  is  2.6%,
one of the highest in the world and only surpassed in Africa.
 Faced with  the  slow  growth  in  agricultural  and  industrial
production  in  the  region and the rapid population growth, some
international financial  organisations  have  put  conditions  on
credit demanding malthusian family planning policies.
 The truth, however, is that this is not the main  cause  of  the
inertia  in  GDP but rather the fact that the developed world has
shouldered the underdeveloped world with external debt  amounting
to $1.2 billion of which 440.000 million is Latin American.
 The region is not overpopulated: population density  is  20  per
km2,  against  101  in Asia, 100 in Europe and 27 in the USA with
Japan coming in at 322. However, Japan enjoys double the GDP rate
of Latin America in absolute terms and is six times richer than a
Latin American.
 South Korea and Taiwan, two decades ago, were  underdeveloped  -
as  much  or  more  so  than  Latin  America. Both countries were
overpopulated but economic growth was high  because  they  ceased
being  exporters  of  primary  products and started producing and
exporting manufactured goods, which gives added  value,  provides
work  and  sells well internationally. Thus, unbelievably, Taiwan
in a reduced area and  with  a  population  of  only  20  million
produced in value terms half the exports of Latin America and has
currency reserves many times greater.
 The population growth in the area  is  actually  beneficial.  In
reality  a  vacuum  lies  at its centre given that the population
concentrates around the  deltas  of  its  great  rivers  and  the
seabord penetrating the interior by about 1500 kms.
 Economic and technological development within  a  given  country
requires  population  densities of some 100 per km2 for only thus
can markets be created which can supply the demand  necessary  to
sustain agriculture and industry. Currently in those markets that
do exist only primary materials are produced  and  exported   and
therefore  given  the  lack  of added value trade balances are in
deficit and the final outcome is crippling external debt.
 In this  sense,  accelerating  population  growth  coupled  with
exports  of primary materials has led to the collapse of economic
and technological development and the  necessary  importation  of
modern  machinery, up-to-date technology has proved impossible to
finance as has also the cost of  patents  and  new  materials  to
export  quality  manufactured  goods  -  the only way to maintain
relatively full emploment. This all  explains  the  level  of  46
million  unemployed  roughly  the  equivalent  of  half the young
labour force. But in the perspective of 2000 if the region wishes
to  escape  from  this crisis of underdevelopment 100 million new
jobs will be needed. Currently the active labour force stands  at
around  124  million  paradoxically  with  more  emploted  in the
terciary sector rather than agriculture and industry.
 If  on  top  of  official  unemployment  we   add   unproductive
employment   of   travelling  salesmen,  shoeshiners,  domestics,
excessive bureaucracy in the  state  aparatus,  supernumaries  in
small  businesses  and low productivity companies we arrive at an
unemployment rate of 40%. But, moreover,since the active part  of
the  labour  force is no bigger than 30% as opposed to 43% in the
EEC there  is  a  difference  of  13%  underemployment  in  Latin
America.  The  reality is that work is scarce and 50 million live
in extreme poverty. The EEC has a productive labour force of  139
million  as  opposed  to  Latin  America's 124 but has a GDP four
times higher.
  Given the facts one asks oneself. How come Latin  America  with
more  university  and  technological development than for example
South Korea 20 years ago the later has industrialised  whereas  a
country like Argentina is facing an almost inescapable crisis?
 It  all  suggests  a  crisis  in   the   economic,   scientific,
technological  and  cultural  development  model in Latin America
which has perversely led to growth in the wrong  sectors  of  the
economy...

Abraham Guilln  Quark Dec. 93 URUGUAY




































