- 14

-

85. There are, of course, substantial differences between countries within the group. Among the less intensive adjusters, the trade balance for Jamaica deteriorated sharply in 1986-89, while that of Colombia improved substantially during the same period. 16' In general, trade reform did not cause the trade balance to deteriorate despitz the increases in imports resulting from import liberalization. The improvements in the trade balance is explained by the greater increases in exports in comparison to imports and reduced domestic absorption.

**Tablt** S **TRADE** BALANCE AS A **RATIO** OF GDP **[ie l911 Ui)**

|**1973**|1579|1910|19B1|19Q|**1933**|**14**|**1'M**|**193**|**1937**|**133**|**1959**|**A~cg**<br>19M82|**19%-**|**19649**|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|(A)**Ilaetuiuas ads.**|||||||||||||||
|Gb<br>**04**|**LA4**|<br>**-0.7**|**_-02_**|4.4|**0O5**|0.7|**4.2**|**1.L**|03|**-042**|_QJI_|_I_|0.4|**0.7**|
|**lad1s**<br>16.1|13.9|US|0.0|**-16**|**-2m**|**2.9**|0.6|1.4|**4.0**|7.0|**6.7**|LI|03|4.8|
|**Uesic**<br>_1.7_|**0.3**|**-23**|-3.1|4.7|9.9|**9.4**|7.7|**95**|10.6|**03**|6.9|**_03_**|9.0|La|
|MG=<br>**-14.4**|-14.7|**-10R**|-11.3|**-10.3**|**-5.9**|***61**|**-5.0**|**-59**|**-62**|-3.3|4.4|**-122**|-5.7|-5.4|
|Turkey<br>**-&a**|-7J|-7.1|**-44**|**_-D_**|_1.6_|**-32**|**0.0**|**-5.**|**-4.0**|**0.0**|**-44**|-SJ|-16|**_-24_**|
|A%aW<br>**-09**|-1.4|-1.7|-3.3|**-1.0**|QO|**0n3**|0.7|**04**|**1.**|**2.3**|15|-17|05|13|
|*13)**L1s labiie**<br>**ads**|||||||||||||||
|**Cd1a**<br>**1.3**|2.4|**06**|-2.0|_-335_|**-to**|**0.0**|**2Q**|**53**|53|**6.1**|**6.3**|**-02**|03|62|
|**CMk**d'lwsc<br>**-9.7**|-75|-6.1|**-. 6 **|**2.9**|3.1|**9.7**|**10.4**|9.1|**&.1**|7.6|143|4.4|7.7|**93**|
|***3in**<br>**4-63**|**-15**|-21|-33|**410**|**-6.9**|**-5**|-12.4|**_-53_**|-7A4|**47**|-21.4|**-42**|-93|**-13.7**|
|**PFWioz**<br>-9.3|-14.1|-11.6|**-40**|**4.4**|-3.1|**4.6**|**-51**|_-IA_|02|**-13**|**-0.1**|**-33**|**-45**|**046**|
|A-MP<br>**-61**|**_-52_**|48|**-2.7**|-33|**-2**|-0.9|-12|**L.9**|1.7|**-1S**|**401-**|**-44**|**_-4A_**|**4**|
|(C) AN aiusim|||||||||||||||
|A%CW<br>_-32_|**_-30_**|-3.1|**-3**|**-20**|**-. 0 **|**0.0**|**O42**|1.1|13|0.5|**0**|**-2.9**|**404**|**09**|
|T'ade**_RHahn_IewptNFS**<br>m<br>1978-2**lis pe-efrm**<br>**ped:**<br>**19**|om**iqowe**<br>**10-45 is a**|**.**<br>**mjsu**<br>|**sad19319**|i pwt|**per**|**iodL**|||||||||

**3n Weld B11 DBan (BIED Nshmui Amat).**

# E. Exhange Rate and the Labor Market

19The interaction between exchange rate and the labor market is central to the export supply response- Usually, currency devaluation provides an export supply response by reducing real wages and improving the international price competitiveness of exports. It has been argued, however, that a

- f' The deterioration in the trade balance in Jamaica, partly, was a result of Hurricane Gilbert.

- MI Some adjusting countries were forced to reduce the level of external imbalances before the adjustment process began; this was caused by the change in the international environment for commercial lending. The data for Mexico shows that it increased the surplus on trade balance from 1983 onwards.