The Mexican Rescue by Joseph Kraft. Group of Thirty, 66 pp. $15 (paper). Joseph Kraft, a nationally syndi- cated columnist and regular contrib- utor to The New Yorker magazine, is the author of several books on U.S. government and international affairs. Kraft has taken the journalist's route in tracing the story behind Mexico's traumatic ultimatum to the world banking community in 1982, present- ing the issue in the words of key par- ticipants. The director of Mexico's Department of Public Credit perhaps describes the bombshell best, "We didn't crawl to the international finan- cial community as debtors seeking re- lief through some minor adjustment that could be made backstage. We walked in through the front door. We said we had a major problem with a capital P. We didn't say the problem was a particular debt. We said the problem was the whole international financial structure. We said it was ev- erybody's problem." Kraft's depiction of the impact of Mexico's actions is fascinating and highly readable--especially for lay- people. He plots the manoeuvres re- quired in negotiating with the lending institutions, commercial banks, na- tional governments and dozens of ex- tremely powerful personalities. The author also looks at the political impli- cations of developments in interna- tional finance, and the U.S. Treasury Department's ineptitude in foreseeing Mexico's most apparent financial crisis. Income Distribution and Economic Development: An Analytical Survey by Lescaillon, Paukert, Morrisson and Germidis. International Labour Of- fice, 207 pp. 30 Swiss Francs, (paper). No matter how quickly the gross national product grows, a nation can- not be said to have made progress if its population does not benefit from a corresponding increase in income. The ILO has conducted over 100 studies on economic development vis- A-vis employment throughout the Third World and on the distribution between rich and poor. This book syn- thesizes these studies and is com- plemented by information from paral- lel projects conducted by the World Bank. Opening chapters provide a struc- tural analysis of income distribution; an examination of the demographics of income inequality follows. The closing chapters look at possible dis- tribution alternatives, based on a number of studies undertaken by the ILO. Latin American nations receiv- ing special focus in this pan-Third World study are: Chile, Colombia, Puerto Rico and Panama. Planning the Mexican Economy: Alternative Development Strategies by Jorge Buzaglo. St. Martin's Press, 306 pp. $27.50 (cloth). In this book, Buzaglo looks at Mexico's oil-based development and its effects on agriculture and the rest of the economy. According to Buzag- lo, oil-led development strategies can create a number of long-term prob- lems for Third World nations. Ag- riculture generally suffers most, and agriculture is precisely the sector where development problems tend to be the most serious. Rural poverty, migration to the cities, urban un- employment and underemployment are the usual results, along with higher food prices, inflation and in- creasing dependence on food imports. Mexican agriculture has stagnated since the mid-1960s. Income distribu- tion is extremely inequitable; the poor are getting poorer. Buzaglo considers how an expansion in oil production could alleviate, or exacerbate, de- velopment in the non-industrial sec- tors. Latin America in the 1930s: The Role of the Periphery in World Crisis edited by Rosemary Thorp. St. Martin's Press, 338 pp. $32.50 (cloth). Latin America is now facing its most severe "adjustment" crisis since the 1930s. But while there are certain parallels between the continent's cur- rent role in the world economy and its position in the years preceding World War II, these carefully argued essays emphasize the differences between the two periods, rejecting superficial comparisons. As channels to international trade and finance began to close down fol- lowing the 1929 crash, many Latin American nations recovered through an import-substitution scheme. This group of authors argues that several Latin American economies performed particularly well during the early crisis years, especially in comparison to North America. But today there are no opportunities for rapid recovery, and countries are now looking to ex- pand existing exports rather than di- versify their industrial base. The au- thors of these essays-academics from prestigious international institu- tions, Carlos Diaz Alejandro among them-present an integrated view of the two most important periods in Latin America's modern economic history. The Political Economy of Income Distribution in Mexico edited by Pedro Aspd and Paul E. Sigmund. Holmes & Meier, 542 pp. $85 (cloth). The essays in this volume examine the impact of public policy upon the distribution of income in Mexico. The authors conclude that Mexico's rul- ing Institutional Revolutionary Party (PRI) has not been able to achieve so- cial transformation and growth with equity and political stability. Pro- grams designed specifically to effect a more equal distribution of wealth, have by-passed the traditional and rural sectors. As a consequence, "re- distribution in Mexico in recent de- cades . . . has benefitted the middle sectors at the expense of" the mar- ginalized sectors. In 1977, 36% of Mexican families, 22 million people, were living below the national poverty line. Uncertain Future: Commercial Banks and the Third World edit- ed by Richard E. Feinberg and Valer- iana Kallab. Overseas Development Council/Transaction Books, 124 pp. $12.95 (paper). Commercial banks became the main channel for the transfer of capi- tal from the North to the South during the 1970s. But in the current external debt crisis, higher interest rates are draining Latin American nations of badly needed development just as new MARCHIAPRIL 1985 11 MARCH/APRIL 1985 11bank lending is tapering off. Outright default seems unlikely, but an inten- sified conflict between the creditor and debtor nations seems imminent, unless corrective measures are im- plemented in the near future. The Overseas Development Coun- cil is an independent, non-profit or- ganization founded in 1969 to pro- mote awareness of the economic and social problems confronting the de- veloping nations. In this volume, the Council has collected essays covering: the politics and diplomacy of bank lending; the changing relationship be- tween the banks, the IMF and the World Bank; and proposals for a re- formed lending framework encompas- sing credit and improved data collec- tion. Brazil's State-Owned Enterprises: A Case Study of the State as En- trepreneur by Thomas J. Trebat. Cambridge University Press, 287 pp. $42.50 (cloth). Thomas Trebat has written a sys- tematic analysis of the performance of Brazil's state-owned enterprises in petrochemicals, steel, electricity and telecommunications. Private enter- prise is actively encouraged in Brazil, and the state-owned enterprises have served primarily as a catalyst to eco- nomic growth, at least through the early 1980s-and they have grown rapidly relative to the private firms. They have also performed better than many of their counterparts in the de- veloping nations. Trebat argues that the Brazilian economy's large-scale production capacity and the govern- ment's supervision of the firms have been key to this success. However, the real test will be if public enterprise performance can withstand Brazil's current crisis. Transnational Corporations and In- dustrial Transformation in Latin America by Rhys Jenkins. Cam- bridge University Press, 255 pp. $27.95 (cloth). In the 1950s and 1960s, "develop- mentalism" touted the benefits of di- rect foreign investment for Latin America's growing manufacturing sector. By the late 1960s, economic nationalism was on the rise through- out the region, and the tide turned against foreign investors. Taking the criticism further, dependency theo- rists pointed to a new and greater form of dependency in which significant sectors of industry fell under the con- trol of the transnationals. In this com- prehensive study, Rhys Jenkins illus- trates shortcomings in all three posi- tions. He concludes with case studies on the automotive industry and phar- maceuticals, with sections on the in- ternationalization of capital and class structure. The Role of the International Fi- nancial Centres in Underdeveloped Countries by Xabier Gorostiaga. St. Martin's Press, 139 pp. $25 (cloth). Xabier Gorostiaga is director and founder of the Institute of Socio-Eco- nomic Research (INIES) in Managua. In 1976 he began a study of the impact of the international financial centers on local economic structures in Pa- nama as part of a doctoral thesis in economics at Cambridge University. This study is an extended look at the role and function of financial centers in the world economy, with Panama as a key example. Gorostiaga ana- lyzes the structural causes that have given rise to the centers in various de- veloping countries, their function and operating mechanisms and impact on the zones in which they operate. He also explores the historical and geo- political backgrounds of these host na- tions which make them ideal operat- ing bases. Economic Liberalization and Sta- bilization Policies in Argentina, Chile and Uruguay: Applications of the Monetary Approach to the Bal- ance of Payments edited by Barletta, Blejer and Landau. The World Bank, 163 pp. $17.50 (paper). In May 1982, the Latin American and Caribbean Regional Office of the World Bank convened a conference to review the recent economic experi- ences of Argentina, Chile and Uruguay, each of which had adopted what is here termed "the monetary approach to the balance of pay- ments." There were considerable var- iations in the three nations' policies, and very mixed results. Equally i2 REPORT ON THE AMERICAS mixed were the interpretations of the experts. The theoretic validity, inter- nal consistency and social costs of the applied programs are still hotly de- bated. The conference participants repre- sented major international lending in- stitutions, research centers and uni- versities of North and South America. And for the most part, these presenta- tions are in strictly balance-of-pay- ments terms, ignoring political and social components.
