The international debt crisis has received a great deal of attention at the macroeconomic and the political levels, but there have been few analyses of its impact upon individual sectors. Thus this article will consider the consequences of the Latin American debt crisis for manufacturing industry, particularly the adjustments that this sector has made in its response to the crisis.

The adjustment process which the manufacturing sector has undergone has produced implications which depend partly upon factors exogenous to the sector and partly upon the nature, and degree of competitiveness, of the manufacturing activity in each of the countries. In turn, the latter factors have been influenced by those very macroeconomic and exogenous variables. Some variables, such as the exchange rate, play major roles in determining the competitiveness of industry, as has frequently been emphasized in recent years. This is true of a number of variables at the industry and enterprise level as well.