Cuadernos de Economía

Shortly after the economic opening, the economy began a cycle of rapid growth and accumulation of deficits, followed by another stage of monetary correctives which brake growth, but don't eliminate the causes of the disequilibrium. The Development Plan reduces the fiscal deficit and it is probable that the next expansion phase will last three years, instead of the barely one year that the previous expansion lasted. But the current account deficit of the balance of payments persists, and willgrow when privatizations slow down toward the third year of the Plan. The country needs outside capital to sustain its growth and modernize its production; thus private debt and foreign investment will continue togrow, along with foreign debt servicing and the repatriation of the profits of capital. Reducing the trade deficit to almost zero by 2002 is not enough; a surplus must be generated, that is, in addition to increasing exports we must substitute imports, but without the simplistic protectionism of the pasto instead of high tariffs, sources of risk capital must be created which are willing to finance new firms, technological innovations, and production of goods with sufficient quality and pricesto substitute for a good part of what we now import.