9_Law and State_Volume 17

Underdevelopment, Dependencia, and Modernization Theory 59
in the international market through a system of multiple exchange
rates and export expenditures which discriminated against export activities23.
Only in very recent times have countries such as Brazil and Mexico
more firmly adjusted their industrialization strategy to the promotion of
industrial exports, since they have recognized the limited possibilities of
currency saving through import substitution.
Foreign enterprises, with their prohibitions and taxes on exports, have
frequently impeded industrial exports and hence have made a smaller
contribution to the balance of payments than they otherwise might have
done. If foreign enterprises, despite their principal orientation toward the
Latin American domestic market, have nevertheless assumed a leading
role in Latin America’s industrial goods export, then this is primarily due
to the fact that, together widi the national enterprises’ even lower degree
of national export orientation, international concerns’ multi-national character
involves them more in the international economy, and they can
better capitalize on export opportunities. But on the whole, foreign direct
investments appear to have worsened Latin American states’ foreign currency
position24.
With respect to the balance of payments problem, the dependencia
school’s theses manifestly have a high degree of plausibility. However, the
question again arises as to whether the growing foreign debts are caused
by the strategy of import substitution. It is impossible to see how the
high overall economic growth rates of the past decades could have been
achieved without ongoing import substitution and with a low credit
requirement. The problem of foreign debt can presumably be solved only
if every effort is made to increase industrial exports while increasingly
capitalizing on all export opportunities in the traditional export sectors.
It is very difficult to imagine another way in which the existing overcapacities
in many Latin American countries, which are produced by
exaggerated import substitution and excessive production and which signify
an enormous social waste, can be purposefully utilized, since an
increase in domestic demand would have to lead to imports. A strategy
of industrial exports presupposes that the products, because of their
quality and price, will find buyers on the international market, i. e., that
they will take foreign interests into account. In this connection, the role
of assistance provided by multinational concerns would have to be examined
without bias and the export potential of foreign enterprises would
have to be considered25. A strategy of this kind would be in contradiction
to the demands of the dependencia school, but at present may well be the
only realistic alternative.
The discussion surrounding dependencia has made a world-wide public
I