INDUSTRY AND ECONOMIC DEVELOPMENT IN LATIN AMERICA, 1980-2002

We analyse the evolution of Manufacturing Value-Added per inhabitant in 20 Latin American and Caribbean countries during the period 1980-2002, and present a comparison with more industrialized countries. We find that very few Latin American countries have experienced an increase in this variable during the sample period, corresponding the most outstanding increases of this variable to the following countries: Dominican Republic with 70%, Chile with 46%, Costa Rica 28 % and Mexico with 22%. Other countries in this area have experienced very small increases, or even stagnation or decrease, in this variable. Argentina follows to be the Latin American country with the highest value of this variable, although far below the levels of Spain, the USA and other industrialized countries. We estimate a cross-section econometric model for Latin America which shows the positive impact of manufacturing on non-manufacturing sectors. The main conclusion is the great importance of manufacturing on economic development