these reasons would contribute, in the Mission’s opinion, to make the cost of the output not competitive (IBRD 1950a, pp. 423-425).

The Bank’s Mission proposed a different solution: to establish a smaller steel plant for the transformation of imported scrap metal in Barranquilla, on the northern coast of the country. Without a coking plant and blast furnaces, it would be simpler and less costly. Moreover, its location on the Caribbean coast at the terminus of one of the main railway lines of the country put it in a strategic position for supplying both the international and the national markets (IBRD 1950a, p. 427).

Strong political pressures and a public opinion reclaiming self-sufficiency on some strategic goods obliged the Comité de Desarrollo Economico to find a compromise solution<sup>14</sup> . The Barranquilla proposal was discarded in favor of the Belencito integrated steel plant. The plant, however, would be smaller and the technology simpler than originally conceived, so that it could be supplied by Colombian firms<sup>15</sup> .

This proposal seemed to square the circle: on the one hand, the national need to produce a strategic good (steel) without depending on the international markets for scrap metal was guaranteed. At the same time, an investment of gigantic proportions was avoided. Moreover, because of the possibility of internally producing most of the machineries, spending in foreign currency would have also been reduced. Finally, a smaller plant would have helped management and local workers to acquire expertise without incurring in too serious mistakes. The principle of _learning by doing_ would be the basis of an incremental strategy, from small to large dimensions, and from relatively basic to cutting-edge technology<sup>16</sup> .

# _Iron, Steel and Development: The Disagreement between Hirschman and Currie_

This second proposal proved not luckier than the first. The board of directors of the Empresa Siderúrgica Nacional Paz del Río, leveraging the growing concerns related to the difficult international situation – the Korean war had broken out on June 25, 1950, in the middle of the Colombian debate on the steel plant issue, raising the prices of many raw materials – imposed its original project, and a tremendously large integrated steel plant saw the light in Belencito<sup>17</sup> .

Even from this quick description of the events, it appears that the final decisions on the Paz del Río plant were taken primarily in light of political pressures. In the words of Bank’s vice president Robert Garner, “Paz del Río had become a national symbol”<sup>18</sup> . However, the

> 14 The Comité de Desarrollo Economico was the national committee appointed to implement the Currie Mission’s recommendations. Among its advisors were Lauchlin Currie and other Mission’s members.

> 15 Comité de Desarrollo Economico, _Informe de la mision para el Comité. Fomento de una industria colombiana de acero_ , probabilmente una bozza, Dec. 15, 1950, LBCP.

> 16 Comité de Desarrollo Economico, _Informe preliminar sobre el establecimiento de una planta siderurgica_ , Bogotá, Diciembre 14 de 1950, LBCP.

> 17 The plant would produce 140,000 tons per year, costing about US$ 70-80 million, see Empresa Siderúrgica Nacional de Paz de Río, «The Board of Directors of the Empresa...», Dec. 20, 1950, p. 3, LBCP. According to Currie (1981, p. 157), by 1955 more than US$ 150 million had been spent, up to almost 200 by 1959.

> 18 R. L. Garner to Mr. Elmer G. Burland (Tommie), February 13, 1951, Colombia, General Negotiations 2; Country Operational Files; Fonds 1; World Bank Group Archives (henceforth WBGA).

10