ABSTRACT
The disappointing performance of the mining sectors in the four countries (worsened by sectoral policy errors in Bolivia, Peru and Jamaica) enhanced the need for competitive diversification of the non-mining tradeables. Doctrinaire orthodoxy would expect this to be achieved by markets: it assumes that the exchange rate adjusts output from the non-mining tradeables to compensate for any weakening (or strengthening) in the economic contribution of the mining sector. The experience of Chile under doctrinaire orthodoxy over 1978-82, however, suggests that such a policy may be damaging-even in an economy with several years of liberalization behind it. It is likely to be even more problematic in economies with less mature non-mining tradeable sectors like those of Peru, Jamaica and Bolivia.
