| Latin America Posing New Challenge to the U.S. |
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Washington loves its boogeymen. They make uncooperative nations so much simpler to understand. When recent elections in Latin America brought a series of populist governments to power, pundits warned of the growing influence of Hugo Chavez, the Villain of Venezuela. 26th February 08 - Douglas Savage, Milwaukee Journal Sentinel As an acolyte of hemispheric bête-noire Fidel Castro, Chavez provides a convenient explanation of why our erstwhile allies are, one by one, slipping their North American moorings and sailing off in a new direction. An analysis of recent history suggests that rather than exerting Svengali-like control over their gullible publics, leaders like Chavez are simply capitalizing on deep-seated dissatisfaction with an economic model their citizens perceive as having been forced upon them by the north. In the 1960s and '70s, many countries in Latin America began borrowing heavily to finance development. By 1975, external debt reached 50% of the region's gross domestic product. When the global economy slid into recession in the early 1980s and interest rates rose, many Latin American countries had trouble servicing their debt. A watershed event occurred in August 1982, when Mexico declared it was defaulting on its loans. In response, creditor nations and organizations such as the International Monetary Fund and World Bank induced governments to adopt a neoliberal economic model that restricted the role the state played in the economy, allowing unfettered operation of market forces. The neoliberal approach was further codified in 1989 with "the Washington Consensus," a set of 10 economic reforms that became the standard prescription for Latin America's ailing economies. These included a reduction of public spending on subsidies, privatization of state enterprises, government deregulation of industry and, significantly, the easing of restrictions on imports. There is a truism in economics that says "markets are efficient, not fair." Many Latin Americans would come to experience the truth of this statement first hand in the years that followed. While the importance of macroeconomic stability played well in government ministries, people on the street were less convinced. A 2005 study by the Inter-American Development Bank found one in four people considered privatization to have been beneficial for their countries, and only 16% thought the market was doing a good job of meeting their needs. This does not mean, however, that leaders of the new left are bent on dismantling the basic structures of a market economy. In assessing their intentions, we do well to look beyond the rhetoric and political theatrics of Mr. Chavez and examine the actual policies being promoted. Governments are simultaneously creating expanded safety nets for their poor, encouraging foreign investment and promoting private sector enterprises. Some worry that in their rush to repudiate neoliberal economics, Latin American societies are recreating authoritarian strongmen of an earlier era. The region's citizens have demonstrated, however, an unwillingness to grant their leaders powers they perceive to be overly broad. As the next U.S. administration charts its course in Latin America, it's time to reconsider the basis of our relationship with the region. The sun is rapidly setting on the Monroe Doctrine. Many Latin Americans feel the U.S. has left the stage, and our preoccupation with the war on terror has helped China and others make inroads. As long as Washington defines its interests primarily in terms of its free trade agenda, it can expect continued resistance. If we are to constructively engage with the nations of Latin America, we must first acknowledge that the neoliberal approach has not provided a solution to the region's enormous income disparity. We must also recognize that leaders following an alternative path are not necessarily our adversaries. The traditional rubric of Left vs. Right is becoming irrelevant. As one observer put it, having an occasional lunch with Castro doesn't make you Che Guevara. Given the economic and political challenges of past decades, the choices Latin America's voters have made in recent elections are understandable. While embracing change, however, they have demonstrated little interest in completely undoing the existing order or granting their leaders dictatorial powers. When the next American president returns our collective attention to Latin America, he or she will find a region that, in the words of Ecuador's President Rafael Correa, "is not living an era of changes, but an actual change of eras." If we understand and accept this, it can be an era of opportunity for north and south alike. Douglas Savage is assistant director of the Institute of World Affairs at the University of Wisconsin-Milwaukee. Other recent articles on Latin America: Peru: Workers resist ‘free trade’ agreement - 24th August 07 - David T. Rowlands, Green Left The Ghost of Pinochet Haunts the Campaign Against Chavez - 21st August 07 - John Pilger Rethinking the Development of Latin America and the Caribbean for the 21st Century - 17th August 07 - James Petras ~ STWR Contributing Writer The New Politics of Political Aid in Venezuela - 25th July 07 - Tom Barry, Americas Program - Center for International Policy (CIP) Cuba's Cure - 4th June 07 - Sarah van Gelder, Yes! magazine What’s Behind the Withdrawals from the World Bank, IMF? - 27th May 07 - Alejandro Reuss, NACLA News Latin America Rising - 25th May 07 - Nadia Martinez, Yes magazine Washington’s New Imperial Strategy In Venezuela - 16th May 07 - Chris Carlson, Venezualanalysis.com
Latest articles on Latin America Featured video: La Toma (The Take), by Naomi Klein and Avi Lewis
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