Debt crisis,accumulation crisis and economic restructuring in Latin America

The policy debate over the Latin American debt crisis has shifted from the issue of short-term adjustment to that of long-term restructuring. The history of import substituting industrialization (IS) is reviewed in order to establish a context for the current restructuring debates. We argue that the demise of the IS model was primarily due to narrow domestic markets, heavy imports of capital goods and excessive ties with foreign multinationals, not to inefficiencies inherent in market-constraining policies. From this perspective, free market, export-led growth policies are opposed as an appropriate restructuring strategy and policies of redistribution, regional integration and major debt concessions are supported.