Economic Policy and Manufacturing Performance in Developing Countries

Economic Policy and Manufacturing Performance in Developing Countries

Edited by Oliver Morrissey and Michael Tribe

This book considers the impact of economic reforms on manufacturing performance and explores policy options for promoting manufacturing. Using country-specific case studies spanning Africa, South Asia, South East Asia and Latin America, the authors examine the evidence for and against both trade liberalisation and government support policy.

Chapter 9: Economic policy and the changing structure of small-scale manufacturing in Quito, Ecuador, 1975–95

Alan Middleton

Subjects: development studies, development economics, economics and finance, development economics, industrial economics

Extract

9. Economic policy and the changing structure of small-scale manufacturing in Quito, Ecuador, 1975–95 Alan Middleton* 1 CONTEXT: THE ECONOMY OF ECUADOR SINCE THE 1970s The changing position of Ecuador in the international economic system has had a profound effect on its development trajectory. The dramatic changes in international oil prices in 1972, at a time when Ecuador’s production was coming on stream, produced considerable structural change in the national economy. For most of the post-war period, Ecuador has been the world’s largest banana producer and in the early 1970s it became the smallest member of the Organisation of Petroleum Exporting Countries (OPEC). This heralded the beginning of a period of rapid economic growth. However, by the late 1970s the economy was in decline, and 1982 saw the beginning of a period of severe economic adjustment. The aim of this chapter is to examine the performance of small-scale enterprises in Quito during these two periods – the boom in the mid-1970s and adjustment in the 1980s. The study is based on successive fieldwork visits undertaken by the author (see the Appendix for details) which reveal dramatic changes in the structure and fortunes of smallscale enterprises. We begin with an overview of the performance of the economy. Between 1972 and 1973, GDP grew by 25.3 per cent and for the rest of the decade it grew by an annual average rate of 6 per cent (Banco Central, 1980). Growth after 1972 was not due to oil production alone. Other sectors of...

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