ABSTRACT
This chapter focuses on the experience of five countries—Argentina, Brazil, Chile, Colombia and Peru—and draws heavily on discussions of textile industries. This, however, was a major area for import substitution, a sector where the market was established, technology was readily available, raw fibres often obtainable locally, yet still, in 1919, a vital part of Britain's export trade to Latin America. The 'adverse-shocks' theory overestimated the importance of the First World War to Latin American industry through the failure to appreciate the extent of growth in the 1895-1913 period and by overlooking the serious hindrances to expansion created by the war. The wartime years fell into two phases: an initial period of depression followed by a recovery which allowed manufacturers to utilize excess capacity to take advantage of high prices. In some countries, however, such as Argentina and Colombia (with the exception there of textiles), the recovery from the 1913-1914 recession did not develop real momentum until after the war.
