Journal of Economics and Development Studies

De-industrialization and Industrial Policy Options for Mexico and Latin America, 1990–2017
Benjamin G. Páez

Abstract
The growth of the major LatinAmerican economies in the first decade of the 21st century was remarkable. They experiencedan economy-wide convergence with the US, which was boosted by cheapbanking credit and the raw material super-cycle. However, this growth slowed considerablywhen the commodity boom ended in parallel with both a sluggish global demand due to the 2008-2009 recession and China´s slowing economy. Hence, out performing LatinAmerican countrieswere left in shock, asking themselves what went wrong with the economic programs purported to avoidboth the traps predicted by the resourcecurse hypothesis and previous economicpolicy failures. So, this paper showed that Latin America is now facing a de-industrialization process and that the surge in the primary products index in the 2003–2013 period did not benefit their societies as much as expected. In response to the missed opportunitiesthat have recurredin LatinAmerican´s economic history, this article first aims to evaluate de-industrialization as its leitmotif. Second, it explores the relevant literature to show that an unexpected windfall of wealth may become a resource curseand howeconomic policiesmaylead to deepeningde-industrialization. Third, itidentifiesde-industrialization sources in LatinAmerica, which has led it into a service economy.Fourth, results obtained are discussed. Some concluding remarks andeconomic policy optionsare delivered in section fifth.

Full Text: PDF     DOI: 10.15640/jeds.v6n4a4