Capital goods imports and investment in Latin America, 1913 and 1925

"For many years Latin America economic history has been focused on the export performance of the region’s countries and on the import substitution industrialisation policies. The former have paid most of their attention to world markets for Latin American products. The latter have researched the development of domestic output, typically for the largest economies. The imports have usually been neglected as well as the standards of living. Indeed, our knowledge of the development of income levels is very much limited to the large economies. This lack of estimates on levels of income is increasingly becoming a major brake to put Latin American experience in a real world wide comparative perspective. We propose to look at the import side of Latin American economies to find proxies for economic modernisation. In this paper we focus on capital goods imports in order to estimate capital formation. We rely on the exports of the three major capital goods exporting economies – the United Kingdom, United States and Germany – and we check the data with the imports of almost all Latin American and Caribbean economies. We do this for 1913 and 1925. The 1913 benchmark corresponds to the final stage of the classical age of development of the international economy. The 1925 one is at the middle of the recovering twenties, and it has been chosen as it usually corresponds with the start of a better historical statistics recollection. We will discuss the consistency of the two sets of data – exports from the UK, US and Germany and imports from Latin America – and propose a series of figures on capital goods imports (cements, metal products, machinery and transport equipment) for all Latin American and Caribbean countries in 1913 and 1925. The results that we have reached so far, allow for a systematic Latin American and Caribbean (and in some cases even to a wider international) inter country comparison point at a reassessment of the past economic performance of some of the small Latin American and Caribbean economies. We interpret these results within the framework of the opportunities provided for the smooth working of the international economy."