Policies for competitiveness

The progress made by the countries of the region in their stabilization processes has led policy-makers and entrepreneurs to pay increasing attention to the competitiveness of production activities and the factors and policies that determine it. The stability attained has clearly revealed the levels of some real variables which were hard to quantify in conditions of extreme price variations. This greater transparency of the market conditions, together with the growing competition resulting from the processes of greater trade openness, has brought out the strengths and weaknesses of the region's firms in terms of competitiveness and in many countries has led to renewed awareness of the need to apply policies aimed at reducing the cost of the microeconomic adjustment processes. This article reviews the current debate on the possible scope of such policies and suggests lines of action to strengthen the competitiveness of the region's enterprises, especially those engaged in manufacturing. Section I presents background elements, at the most general level possible, to gain an idea of the debate on competitiveness policies in the region. Section II suggests some policies needed in order to strengthen regional competitiveness, together with some lines of action to put them into effect in the areas of the generation and spreading of technology, which are the fundamental field of action for policies of a horizontal or neutral nature. Finally, section III indicates some analytical elements which are very important for the formulation and implementation of policies which will surely be in the forefront of the debate on competitiveness.