Understanding Latin America is not an easy task, particularly given the vast heterogeneity of the region. But despite divergences, many issues are common to the countries in the region and can provide guidance in the endeavor. Latin America can be seen from two perspectives: as a region with its own intra-regional dynamics, and also as it interacts with the United States. The countries of Latin America can be compared in the ways the different countries relate to each other, how their domestic politics compare, how those politics come into play when acting in the international arena, and how these interests help create differing coalitions when dealing with various issues. The disproportionate power of the United States—both political and economic—defines its role in the hemisphere, and also influences both the individual countries of Latin America and their varying alliances.
Excluding either of these dimensions would provide an incomplete picture of the complex forces at work in the hemisphere. The distinction is more apparent in some issues than others. Population migration and drug trafficking are broadly defined issues that create similar problems for most Latin American countries in their relations with the United States, although global issues such as human rights and democracy create overlaps that make the distinctions less neat. Trade, development, and economic growth are less easily categorized because the priorities of the United States do not always align with those of Latin America, and even within Latin America priorities diverge depending on political leanings. An awareness of these interrelationships is essential to fully understand Latin America, its affairs, and its dynamics.
U.S.—LATIN AMERICAN RELATIONS
Relations between Latin America and the United States are among the most studied and scrutinized issues in any review of the hemisphere's past, present, and future, and also among the most controversial. There has never been a consensual vision of this relationship, either in the United States or in Latin America. From the time of the Monroe Doctrine in 1823, when the United States declared that it would not countenance any intervention by a foreign (meaning European) power in the hemisphere, through the Texan secession in 1836 and the subsequent Mexican-American War (1846–1848), extending to the so-called Spanish—American War in 1898 and all the way to George W. Bush's 2001 attempt to truly elevate the hemisphere's priority on Washington's agenda, the relationship has been a difficult one, to say the least.
U.S.—Latin American relations have encompassed a variety of issues over the years: territorial expansion and U.S. claims against Latin American states; trade and investment; geopolitical and ideological questions during the cold war; human rights and democracy (sporadically); security (cooperation to keep communism out of the continent during the cold war or to counter terrorism in the early twenty-first century). In the latter twentieth century the particularly sensitive and problematic issues of immigration and drugs arose, though some nations, such as Chile and Argentina, rarely find either issue raised in their conversations with Washington, and Uruguay, Costa Rica, and Venezuela have few disputes with the United States over immigration. For most other countries in Latin America, these are among the most salient questions in their dealings with the United States. There is no link between the two issues, although many people often associate them, on occasion even tying them to terrorism and security. But these issues are nonetheless complex, long-standing, and defiant of any simple solutions or answers.
Hemispheric Drug Issues
The traditional view of the hemispheric drug issue has been, on the part of the United States, that Latin American nations are the producers of most of the illicit substances consumed in the United States—cocaine, heroin, marijuana, and meta-amphetamines—and that because of corruption and negligence, their governments fail to carry out a proper job of drug enforcement. The traditional Latin American perspective has always been that the United States is the world's largest consumer of drugs, and that as long as its insatiable demand is not curbed, it will remain almost impossible to control the supply side of the equation. Both sides have a point. On one hand, Washington asked Mexico during World War II to cultivate poppies in the mountains of Sinaloa to make morphine for the military, because the traditional Asian sources were unavailable. On the other hand, the complicity between some Latin American states, including Mexico, Guatemala, Cuba, Colombia, Bolivia, and Peru, and the drug trade has never really been rebutted by the states themselves. What is in dispute is where the responsibility lies.
In the early twenty-first century the drug issue between the northern and southern halves of the hemisphere is more convoluted than ever. Most drug-enforcement efforts in the past have largely failed. Crop eradication through spraying and weeding, for example, became too noxious or expensive, environmentally, socially, and economically, and most such projects have been abandoned. Alternative crop support programs have failed because the price differential between what coca leaf, marijuana, or poppies and conventional crops will fetch on the market is just too wide. In some cases cultivation is simply shifted from one country to another, as occurred with the spread of coca leaf cultivation from the Chapare region in Bolivia to the Upper Huallaga Valley in Peru, then to Colombia and more recently to the Brazilian Amazon. The same happens with transshipment routes. In the mid-1980s the south Florida route to the United States from Colombia was largely shut down; the drug cartels moved to Mexico, where they have remained ever since. To compound the problem, even when progress is made in reducing the demand for certain substances, cocaine and crack, for example, the use of other drugs, such as meta-amphetamines, increases to take their place. Even if by some standards overall drug consumption is dropping in the United States, it appears to be rising in other wealthy nations, such as those of western Europe.
A further complication stems from the fact that the while most Latin American nations were once primarily involved in drug production and transshipment, many have ultimately become major consumers as well. In countries such as Colombia, Brazil, and Mexico, the notion of Latin America as the source of supply and the United States as the source of demand has become increasingly obsolete. Moreover, the money for drugs and the traffic in arms and precursor chemicals for producing cocaine and meta-amphetamines flows in a north-south direction, not the other way around. Consequently, the violence and criminality generally associated with drug trafficking and consumption is more frequently appearing everywhere, in the major cities of Latin America as well as in the larger U.S. cities. The distinction between producer and consumer societies is more and more blurred, and the problems facing both the United States and Latin America are increasingly similar. This has begun to lead to greater cooperation, and also to a broader debate about what the best response may be to the challenges drugs represent for everyone.
Legalization does not seem to be a viable approach anywhere: not in Latin America, because unless the United States followed suit it would provoke a major crisis in hemispheric relations; not in Europe (with a few urban exceptions) because drug users would flock to the continent if it were to legalize unilaterally as was exemplified in the Zurich needle park experiment in the 1990s; not in the United States, because the political environment does not seem to be conducive to it. So what can be done? Not very much. Each country can be more or less effective in attempting to fend off the scourge of drug trafficking and consumption, but paradoxically, as a larger number of Latin American countries experience economic success and broaden their middle classes, they also, inevitably, expand their market for drugs. Some, such as Mexico, can perform much more effectively, for example, in sealing off its southern border and stop drug traffic through its territory but that will only drive the flows going northward to other areas; a win for Mexico, but a loss for others, and a draw for the United States. Ultimately the best solution is either that the consumption of illicit substances be freed of the stigma, enormous profits, and criminality wrought by its illegal character, or that through education, jobs, and publicity, demand be driven down so dramatically that prices fall, and drug trafficking is no longer a profitable trade.
Immigration is an even more delicate affair, full of twists and turns. It has become one of the most important items on the U.S.—Latin American agenda for countries ranging from Mexico to Ecuador, and including almost all of Central America and the Caribbean. It involves more than ten million undocumented citizens of these nations in the United States, with an influx of probably above half a million yearly. Immigrants are responsible for more than $40 billion in remittances every year and account for an average of more than a death per day at the Mexican border, as well as uncounted other deaths on the trip north from countries as far away as Brazil and Bolivia. While migration is not a new issue—the first emigrants from Mexico to the United States traveled in the late nineteenth century—it has always been a contentious one (witness Operation Wetback in the early 1950s, when hundreds of thousands of Mexicans were forcibly deported). Immigration issues have attained greater prominence in the twenty-first century than ever before, and the related problems have no easy solution.
By its very nature, immigration reflects a dual perspective. Americans acknowledge that their economy needs workers from abroad, and that theirs is a country of immigrants. But, they insist, those immigrants must enter and reside in the country legally. Latin Americans point out that U.S. law is constantly changing, that it is hypocritical—Washington has been letting people in without authorization since the early twentieth century—and that immigrants' contributions to U.S. society and well-being are not appreciated or recognized. Americans are deeply divided about immigration questions—some favoring legalization and a guest worker program, others supporting deportation and a fence on the border—and many Latin Americans wonder whether at the end of the day out-migration is good for their countries or not.
Public opinion is inflamed in Latin America when children die in trucks or railroad cars on their way north, or when the U.S. Congress votes to build a wall in the Arizona Sonoran Desert; U.S. citizens are shocked when the extent of unauthorized immigration becomes apparent in communities across the United States heretofore unaccustomed to a foreign presence. Latin Americans want and need the remittances sent home by emigrants, but not the loss their departure entails for their society; Americans want the quality of life, competitiveness, and low prices for many goods that unauthorized immigration provides, but not the violation of the rule of law it implies, nor the diffusion of immigration to areas of the country unfamiliar with the phenomenon.
In the long term, several converging trends may provide at least a partial solution to this controversial and sensitive issue. At some point, the enormous wage differential between the main sending countries—Mexico, Central America, the Caribbean, and increasingly Peru and Ecuador in South America—and the United States will diminish, making the costs and perils of out-migration too high in relation to its benefits for migrants. And at some point—no one knows for certain when—the American economy's appetite for low-wage, low-skill labor will slake, and unauthorized migrants, or legal ones for that matter, will no longer find employment almost immediately on arrival in the United States. In addition, as population growth in most sending countries continues to drop precipitously, the population will age, and the pool of potential emigrants will shrink. But all of this will take years.
In the meantime, the best way to address the issue is cooperatively, that is, not as an exclusively domestic U.S. concern but as a hemispheric problem. Moreover, reaching even temporary solutions will require compromises both within the United States and also by the originating countries' governments. Washington could legalize those who have already crossed the border; the Latin American nations could make greater efforts to control outflows. The United States could accept a temporary worker program that avoids and corrects abuses and mistakes of the past; the Latin American countries could share responsibility with Washington in managing these programs and ensuring that their citizens are not exploited or mistreated. It will not be easy.
There have never been simple answers to the riddles and conundrums of U.S.—Latin American relations. Some, such as questions of trade and investment, have been settled partly through lengthy negotiations. Others have been largely laid to rest thanks to history: The end of the cold war eliminated the main geopolitical component that had poisoned hemispheric relations since 1947. New issues have emerged, and on occasion greater accord than ever before has been achieved, on human rights, democracy, and the fight against corruption. But some issues, such as drugs or immigration, will just not go away. They will continue to be present and to plague north-south relations in the hemisphere for years to come. Impatience, over-simplification, and extreme points of view, however understandable on occasion, cannot be a substitute for wisdom, tolerance, and statesmanship. Only thanks to virtues of this nature will these immensely difficult matters be addressed appropriately.
HUMAN RIGHTS AND DEMOCRACY
Democracy and human rights should have been present on Latin America's agenda in the past, although neither the hemisphere's elites nor the general population have typically recognized this fact. That is perhaps the best way to sum up the hemisphere's attitude toward these fundamental matters in the past; it also illustrates how far Latin America has traveled since the early 1990s: In the early twenty-first century these are perhaps the central questions facing its societies and future.
As the nineteenth century wore on and the twentieth century approached, some Latin American countries began to construct a very basic structure of democratic rule, usually of a highly elitist nature. Chile, Argentina, Uruguay, and Brazil (after the end of the Empire) all established electoral procedures. In general they all restricted suffrage rather severely, tolerated labor unions (relatively), and accepted at least a partial separation of powers, in most cases featuring a powerful legislative branch, an overwhelming executive branch, and, almost always, a submissive judiciary. This was in the best of cases; in others, the chaos of insurrections, foreign invasions, coups d'état, assassinations, and revolutions was met with the emergence of perennial dictatorships such as that of Porfirio Díaz in Mexico and Juan Vicente Gómez in Venezuela, with numerous shorter-lived variations across Central America and the Caribbean.
Unfortunately, even the best of the post-colonial governments ultimately collapsed. With the coming of the Great Depression, highly fragile democracies, erected on excessively unequal social foundations that excluded and disenfranchised the bulk of the population, were rapidly replaced by military or semi-military regimes. Takeovers by the armed forces or other authoritarian sectors occurred in Argentina and Brazil in 1930, and in Colombia, Peru, and even to some extent in Chile during the first half of the twentieth century.
The chasm between theory and practice present in the early Latin American democracies extended to the realm of human rights. Basic rights such as freedom of expression, association, and religion, due process, and habeas corpus were largely absent from the real life of practically every Latin American nation, with the possible exceptions of Uruguay and Costa Rica. Certain regimes were more repressive than others; some governments were every now and then democratically elected, but were soon overthrown; some political systems achieved lasting stability and regularity through pro forma rigged elections; but by and large democratic rule and respect for human rights continued be sorely lacking in the region as a whole until the early 1960s.
Then two events precipitated a short-lived but promising change that was a harbinger of things to come. The Cuban Revolution of 1959 showed that even if broad sectors of sophisticated though unequal societies were not hungry for democracy and human rights, they certainly were desperate for social justice and economic progress. The route sketched out by Fidel Castro and Che Guevara was appealing in many nations eager for equality and prosperity, or in their absence, at least the trappings of democracy. In Washington, the Kennedy administration decided that any response to the perceived threat from Havana had to include a restoration, or in some cases the beginning, of democratic rule and a minimum respect for human rights. The Alliance for Progress, an economic aid and development plan launched by John F. Kennedy in 1961, never really got off the ground, but it laid the groundwork for what would happen later. In Colombia, Venezuela, Peru, Chile, Uruguay, Argentina, and Brazil, mainly for domestic reasons, but also very clearly in response to actions in Havana and Washington, democratic rule and human rights flourished during a brief but significant interlude in the early 1960s.
It could not last. The menace of the Cuban Revolution led elites throughout the region to retrench behind bloody dictatorships, and Kennedy's death together with the Vietnam quagmire quickly dissipated any interest on Washington's part in what was occurring south of the Rio Grande. One country after another lapsed into authoritarian rule, increasingly managed by the armed forces directly, and taking repression and human-rights violations to extremes unknown until then. Beginning with the 1964 coup in Brazil and extending into the early 1980s, even countries previously distinguished by their democratic traditions, such as Chile and Uruguay, were engulfed by the authoritarian tide.
Despite these setbacks, the seed of change had been sown. From the early 1980s onward, Latin America began to move firmly in the direction of representative democracy and respect for human rights. The military began to withdraw from power, either because of its utter humiliation, as in Argentina's defeat by Britain in the Falkland Islands (Malvinas); through sheer exhaustion and internal divisions (Brazil after 1985); or through miscalculation, as when Chilean dictator Augusto Pinochet lost a 1988 referendum to extend his presidency. For whatever reason, elections began to be held almost everywhere. In addition, they were increasingly free and fair, thanks to civil watchdog groups, international observers from various organizations, better electoral laws and independent authorities, and because outgoing rulers were reluctant to step in and blatantly rig the vote. Even Mexico, known both for the stability and fraudulent nature of its electoral processes, began to change.
The political situation in Latin America in the early twenty-first century is remarkably different from what it had been during the first two centuries of independence. With the exception of Cuba, power is contended for, and obtained only at, the ballot box. State repression, at a national or federal level, has been largely eradicated; due process has started to prevail in most cases; freedom to create political parties, unions, and associations is widely guaranteed; the media are largely free from direct censorship; vibrant groups in civil society fight for women's rights, indigenous people's rights, reproductive health, and choice (or the opposite); and the armed forces have gone back to their barracks, if not for good, at least for a considerable period of time. What's more, this progress has been partly locked in by a series of international and regional treaties that most Latin American governments have signed and ratified. These covenants are not iron-clad, and can of course be broken, but instruments such as the Inter-American Democratic Charter, and the now better-funded and more accredited Inter-American Commission on Human Rights (in Washington) and the Inter-American Court of Human Rights (in Costa Rica) constitute significant obstacles to backsliding.
Furthermore, in poll after poll, year after year, country after country, Latin American public opinion shows itself increasingly convinced of the virtues of democracy in comparison to any other type of government. Ratings of well over 70 percent prevail in most countries, and the lowest ones are never below 50 percent. The notion that people are becoming disenchanted with democracy because it has not delivered prosperity or eliminated poverty and inequality is simply not born out by continent-wide surveys carried out over several years. This does not mean that Latin Americans are satisfied with how democracy functions in their societies, but simply that they prefer it to the alternative: the authoritarian regimes they previously suffered under.
Despite this undeniable progress, very real problems in the realms of democracy and human rights still plague Latin America. Although electoral systems are in place that generally guarantee free and fair elections, they do not insure against other excesses. Losing candidates in various countries, including Mexico, Venezuela, and Brazil, have complained that reelection procedures or their equivalent have allowed incumbents to use the power and resources of the state in favor of their candidates and against the opposition. Media coverage is unregulated, and in some countries, outrageous. National elections generally work well, but local elections are often beset by tampering and cheating. Representation mechanisms in congress are still deficient—congressional representation is still deficient as members of congress typically do not respond to their constituencies, but to other political interests—and the prevailing political systems in place at least nominally since independence, modeled on the U.S. system of checks and balances, have led (now that the laws are respected in their letter and spirit) to gridlock or outright paralysis and endless bickering between the legislative and executive branches.
Democracy and respect for human rights are not limited to electoral matters and basic freedoms, as essential as these may be. If the state no longer directly engages in repression or violence against its citizens, other individuals, and sometimes local and regional authorities, do. Indeed, the violence and criminality suffered by millions of Latin Americans is largely inflicted upon them by gangs, drug cartels, paramilitary groups, and other criminals tolerated or even encouraged by governments at the local level. There is scant recourse against them: The judicial system is often in the hands of the very perpetrators of the crimes it should be judging and punishing. Democracy starts with elections, but does not end there. Protection from abuse and violence is one of the main responsibilities of a democratic government, and most Latin American states fail miserably at this.
Transparency and accountability is another weak area. While many countries have transparency laws and strong sanctions against corruption, the scandals that continue to emerge in practically every Latin American nation show that the problem has not gone away. Transparent, honest, and accountable governance is a requirement of democratic rule, even if it can never be totally and permanently achieved. In this respect, Latin America still has a long road to travel. The rule of law is also problematic. Due process, property rights, and legal security for people, property, and transactions are woefully inadequate in most of the region. Judicial procedures are slow, opaque, often corrupt, and seriously skewed in favor of those with money. Enormous numbers of crimes go unreported; large tracts of slums around and within the great cities of the hemisphere lack deeds or land titles; the size of the underground or informal economy can sometimes reach that of the formal one; bureaucracies are still notoriously slow, inefficient, corrupt, and expensive. In these complex and subtle aspects of democracy and human rights, the region has its work cut out for it.
Despite the advances democracy has made in Latin America, a new and troubling trend seems to be emerging in many countries. Since 1998, in nations including Argentina, Venezuela, Bolivia, and Ecuador, leaders have been elected in an unquestionably democratic fashion but have subsequently begun to change constitutions, stack legislative and judicial branches, control the media, govern from the streets, harass and intimidate the opposition, and manipulate elections brazenly. Leaders come to power in democratic elections, but govern less and less democratically. They rarely broach the limits of democracy and respect for human rights, but they stretch those limits as far as they can. They seek to transform the constitutional framework in which they operate in a direction that clearly is aiming toward a concentration, and perpetuation, of power. It is too soon to know whether this represents a lasting trend or a brief and partial interruption in the progress toward democratic governance. Despite these problems, however, Latin Americans have much to celebrate. The region appears to have made its peace with representative democracy and the respect for human rights that so many of its founders sought, and never achieved.
THE SURGE OF THE LEFT
One of the most significant political developments in Latin America is the marked trend since the 1990s for parties self-identified with the ideological left to be elected, one after another, in various countries. Leftist governments have taken power in Argentina, Bolivia, Brazil, Chile, Ecuador, Nicaragua, Peru, Uruguay, and Venezuela. Together, these countries represent more than half of the Latin American nations, and account for about 60 percent of the population in the hemisphere. Few of these leaders will face presidential elections again until the end of 2010 and those who do are highly unlikely to lose power, so this phenomenon will most likely last at least until 2010. Aside from the symbolic importance of having parties from the left in power, or the possibility of a policy shift derived from their ideological orientation, the redefinition of political alliances in the hemisphere represents a significant trend. In political terms, it is hard to understand Latin America without acknowledging these developments and their effects both on relations among Latin American countries and between Latin America and the United States.
Precedents and Historical Background
With very few exceptions, the ideological left in Latin America has been a constant political presence in the hemisphere since the 1950s, assuming different forms in a variety of countries. Communists, socialists, social democrats, populists, or left-leaning political-military groups emerged either as ideological currents, as political parties or, especially during the 1960s to 1980s, as armed groups seeking to change the political landscape. Yet with the exception of Cuba, and briefly in Chile in the 1970s and Nicaragua in the 1980s, the left was never able to assume power and enact its agenda, let alone be competitive in the polls. Until, that is, the 1990s.
The most celebrated benchmark for the left in Latin America was the Cuban Revolution and Fidel Castro's entry into Havana on January 8, 1959. As a result of this feat, advocates of a revolutionary approach to power gained prominence and the influence of Cuba was ubiquitous among the Latin American left. The 1960s and 1970s were thus characterized by a politically active but later marginal left in some countries (including Brazil, Chile, and Uruguay) or by an actively revolutionary left in others (including Uruguay, Brazil, and Argentina, Venezuela, and Bolivia), usually supported by Cuba and usually with little success. The exceptions were the Socialist Party of Chile (PS) that took Salvador Allende to the presidency from 1970 to 1973, when he was overthrown by a military coup, and the Sandinista National Liberation Front (FSLN) that defeated Nicaragua's Anastasio Somoza on July 19, 1979 and remained in power until they were defeated in elections on February 25, 1990.
The 1980s followed a different pattern, both in the intensity of political activity on the left and in rapidly changing economic and political conditions. On the one hand, Cuban-backed guerrilla movements were much more active than in the previous decade in countries including El Salvador, Grenada, Guatemala, and Nicaragua, although without much success. On the other hand, the end of the cold war, prompted by the implementation of perestroika in the USSR and culminating with fall of the Berlin Wall in 1989, as well as a 1980s shift in economic paradigms toward neoliberalism, changed the political landscape in which the Latin American left would operate, and forced it to adapt to these new conditions. By the end of the decade, almost all Communist parties had virtually disappeared (except for El Salvador and Uruguay), and the prevalent view on the left had evolved to advocating legal elections as the preferred means to achieve power.
On the opposite end of the spectrum, by the beginning of the 1990s a new type of radical leftist guerrillas emerged in various Latin American countries: Peru's Shining Path, Colombia's Revolutionary Armed Forces of Colombia (FARC), El Salvador's Farabundo Martí National Liberation Front (FMLN), and Guatemala's Guerrilla Army of the Poor (EGP). Unlike their predecessors, their relative success was based on creating a base of supporters among peasants and advocating change through long-term struggle. None of them became powerful enough to change their countries' government, as had occurred in Cuba, or to force radical changes in the political landscape.
At the beginning of the 1990s only Cuba, Nicaragua, and Chile had governments linked to the left. Cuba and Nicaragua had gained theirs by means of armed revolution, and Nicaragua's Sandinistas were defeated in the polls in February of 1990. Chile, through an alliance of parties that included the Chilean left, elected Patricio Aylwin president on December 14, 1989. Aside from the Chilean socialists, no other parties from the left were elected into office between the 1970s and the 1980s, although some of its candidates were able to amass significant amounts of votes during this period, including Cuauhtémoc Cárdenas in Mexico and Luiz Inácio Lula da Silva in Brazil. Prior to the election of Salvador Allende (1970–1973) in Chile, there had been some brief experiments with governments that advanced a leftist agenda in Guatemala with Jacobo Arbenz (1951–1954), the Dominican Republic with Juan Bosch (1963), and Brazil with João Goulart (1961–1964).
The left became more adept at playing by democratic rules in the 1990s, presenting candidates in regular elections and seeing encouraging results. The left has been in power in Chile since 2000, Venezuela since 1999, Brazil since 2003, Argentina since 2003, Panama since 2004, Uruguay since 2005, Bolivia since 2006, Nicaragua since 2007, Peru since 2006, and Ecuador since 2007. The winning candidates in these countries all portrayed themselves as leftists. An interesting question is whether all of these governments have enough common traits to share that single category.
A closer assessment of the various parties suggests that there are clear differences between them. At the very least, there are two clearly distinguishable groups, one a moderate and modern left identifiable in Chile, Brazil, and Uruguay, and another a populist version seen in Venezuela, Nicaragua, Bolivia, Ecuador, and Peru, and to an extent in Argentina and Mexico. The leftist parties have varying origins: Some are the natural descents of the traditional left, others appeared with appealing new candidates and discourse. Some aim for long-term results that derive from sustainable policies, others look for more immediate results as means to remain in power. Some play by the rules, while others simply ignore institutions that stand in the way of their goals.
Many reasons have been advanced to explain the recent surge of the left. The failure of previous economic models to cope with poverty and reduce inequality is frequently cited. The left advocates redistribution of wealth and elimination of poverty as a matter of principle, so it seems reasonable that it should be supported by those who would benefit the most from these policies, namely the poor in Latin America, who constitute the majority of the population. The argument would carry more weight if it could also explain why it was not until the 1990s that the left began to win elections. Poverty and inequality have been constants in Latin America that have not particularly worsened during those years. In fact, the new leftist governments have not implemented many radical or self-sustaining programs to reduce poverty. Those countries most successful at reducing poverty, namely Chile and Brazil, have done so by implementing programs inspired by principles more in accordance with the right, as is the case of the Brazilian Bolsa Família program or the Mexican Progresa program, designed and implemented by the orthodox government of Ernesto Zedillo.
A much better explanation for the rise of the left in Latin America and the policies it implements can be found in the confluence of two factors: better candidates and change in voters' tastes. There is little doubt that the leftist parties have been able to nominate superior candidates since the 1990s, whether they are evaluated in terms of discourse, charisma, effectiveness, or credibility. And these candidates have been able to appeal to enough voters to win elections. At the same time, assessments of ideological values among Latin Americans show that the candidates from the left have broadened their appeal and acquired votes from the center and the right of the ideological spectrum. As their constituencies have broadened, governments from the left have less leeway to enact radical policies if they want to remain in office. And this explains why many governments from the left typically enact centrists policies. These seemingly contradictory trends help explain why most of the leftist candidates are not more radical: The voters would not re-elect them.
The surge of the left since the 1990s has had an important impact on relationships both within Latin America and between Latin American countries and the United States. On the international front, ties between the United States and Latin America have become strained. This began with a shift in U.S. priorities following the terrorist attacks of September 11, 2001, and worsened as a result of the strengthening position of Venezuelan president Hugo Chávez Frías (1999–), who undertook the task of preserving Cuban ideals in the hemisphere. This translated into a new political landscape in the region for the United States. As a political offspring of Cuban socialism, President Chávez has assumed the hemispheric role of critic of American policies. His administration supports a closely knit offensive to free trade alternatives ranging from proposing alternative treaties to organizing protests against U.S. presidents. Venezuela finances missions of Cuban doctors in various countries in the hemisphere and has formed commercial and diplomatic ties with countries on the U.S. blacklist. As a result of these tactics, Venezuela has gained the support of Bolivia, Argentina, Ecuador, and Nicaragua.
Chávez's activism has resulted in a de facto division of the Latin American countries into two camps: one that actively opposes the United States, and one that passively resists Chávez's influence. While the populist left engages constantly in confrontations over American policies and initiatives, the moderate left has not aligned itself directly with the United States but does not oppose Chávez directly either, in an effort to maintain a semblance of balance in the hemisphere.
REGIONAL TRADE AND ECONOMIC INTEGRATION
The case for Latin American unification has arisen time and again as an echo of the Bolivarian dream of a unified hemisphere. Attempts to integrate Latin America have been made in the political arena through alliances such as the Organization of American States (OAS) and in the economic realm through common or enhanced trade policies. In the twenty-first century the trend is to economic unity and is mostly based on free trade and investment theories that believe that economies operating without the distortions generated by tariffs and with investment allocated efficiently should grow more quickly, specialize, and engage in virtuous cycles of growth.
Ideologically, the processes and policies that represent sound economic policy have undergone a paradigm shift since the 1980s. The economic and trade policies of import substitution industrialization (ISI) advocated by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) since the 1950s led to a period of excessive growth without integration and ended with the economic crises of the early 1980s. They were replaced with a new paradigm, the so-called Washington Consensus, a form of market economics or neoliberalism that advocated self-sustained growth by reducing the size of government, keeping regulation to a minimum, and reducing distortions in domestic markets. Crucial in this mix was the reduction of tariffs and subsidies to allow the free flow of goods and capital across borders. The resulting efficient allocation of resources was expected to contribute to lower production costs, increase employment, and foster long-lasting and sustainable periods of economic growth.
A variety of attempts to achieve economic integration have been undertaken since the beginning of the 1990s and were based on regional trade. They included the Southern Common Market (Mercosur; 1991), the Central American Common Market (CACM; since its reinstatement in 1991), the Andean Community of Nations (CAN; since its trade reorientation in 1993), the North American Free Trade Agreement (NAFTA; 1992), and the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR, 2004). Parallel attempts at a comprehensive reduction of trade barriers were negotiated in Free Trade Area of the Americas (FTAA) discussions beginning in 1994 and from 2001 in the Doha Round of the World Trade Organization (WTO), which was not specific to the Americas but would have a strong impact on lowering trade barriers worldwide.
Trade liberalization has been implemented through two main modes. The first is a hybrid in which a group of countries lower or eliminate barriers among themselves while maintaining them for outside countries. In this scheme, countries can agree to protect a given industry during its developing stages, strengthen its exporting potential, and eventually integrate it into an open market. This is the premise underlying Mercosur. The second model is much more ambitious and attempts the regional integration of blocks and regions where the asymmetries between members can be utilized to exploit competitive advantages. For instance, a member might produce and freely export labor-intensive products at a lower price than the same good produced in a capital-intensive economy. This is the premise of CAFTA-DR and was the original aim of the FTAA.
The Southern Common Market (Mercosur) was created by the Treaty of Asunción on March 26, 1991. Mercosur brought together Argentina, Brazil, Paraguay, and Uruguay in the common task of lowering trade barriers, coordinating economic policies, and establishing a common external tariff that would shape its customs-union character. Unlike previous domestic-market approaches, Mercosur explicitly sought to take advantage of the free flow of goods among members by lowering trade barriers while maintaining a degree of protection from nonmember countries using a common external tariff.
Early on in the implementation of Mercosur, there were clear signs of success in coordinating tariff reductions, increasing intra-regional trade, and fostering investment in the region. But the economic crises of the 1990s highlighted the ideological differences among its members, especially Brazil and Argentina, who were particularly affected. The shared objectives of Mercosur played a secondary role to individual country's needs to deal with their own economic imperatives. By the second half of the 1990s, Argentina and Brazil had engaged in a series of measures ranging from unilateral increases in tariffs for nonmember countries to using antidumping measures against other members. The stability of the agreement was further complicated as the time came to enact the agreed-upon reductions in tariffs on sensible areas for all members, chiefly the automotive and sugar sectors. This, in turn, highlights the difficulties of enforcing trade agreements when no supranational body exists, as is often the case in international relations. There are obviously mechanisms to resolve controversies, but the enforcement of resolutions is based on members' compliance or on the threat of retaliation in the trade arena, which might not be effective when a country is willing to pay the cost in order to protect a politically sensitive sector. Despite these problems, Venezuela became the fifth member of Mercosur on December 8, 2005. Bolivia, Chile, Colombia, Ecuador, and Peru participate as associate members, and Mexico as an observer.
NAFTA and CAFTA-DR
An alternative economic paradigm takes advantage of asymmetries between economies, mainly centered on providing members preferential access to the U.S. market while opening borders to new markets for U.S. exports. This strategy was formally inaugurated with the entry into force of the North American Free Trade Agreement (NAFTA) between Canada, the United States, and Mexico in 1994, with mixed results. The three countries' economies have definitely integrated, to the extent that some believe NAFTA helped Mexico rebound from the 1994–1995 peso crisis, which could have spread throughout the region.
NAFTA is not the only agreement to follow this path. Ever since president George W. Bush obtained trade promotion authority (also called fast-track authority) from Congress in August 2002, the United States formally began to negotiate the Central America Free Trade Agreement (CAFTA), based on the same economic premises as NAFTA. Negotiations between Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the United States were initiated. The Dominican Republic joined in 2004, and the agreement was renamed the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR).
CAFTA-DR's main purpose was to create a free-trade zone between these countries and the United States, but one interesting feature of CAFTA-DR was that some of its members' trade privileges were widened by virtue of membership in other free trade agreements. Members of CAFTA-DR could benefit from rules of origin exemptions from other agreements where the United States is a member, such as NAFTA, when exporting to the United States using materials originating in Canada or Mexico, and by virtue of NAFTA and bilateral free-trade agreements with other countries in CAFTA-DR, Mexico could also benefit from preferential treatment in this area. This is especially important in the case of textiles, because one of the aims of CAFTA-DR is to enhance competitiveness with Asian markets. As a result, a de facto integrated area was created (although a more efficient way of achieving this outcome would be by engaging in comprehensive regional agreements, such as the stalled FTAA).
The Free Trade Area of the Americas
The first Summit of the Americas, held in Miami in December 1994, saw the launching of an initiative aimed at eliminating trade barriers, unfair practices, and subsidies among all countries in the hemisphere. The initiative came to be known as the Free Trade Area of the Americas (FTAA). In theory, by enhancing free trade, it would contribute to economic integration in the region, which in turn would spur investment, fostering a virtuous cycle of growth. By linking the sustainability of democratic regimes to economic well-being, the FTAA would become a de facto discursive instrument of democratic stability and poverty alleviation in the region that would be in place no later than 2005.
The FTAA, built upon existing bilateral and multilateral trade agreements, would become the largest block of countries (in terms of territorial expansion) to integrate through free trade. The natural asymmetries within such a varied group of countries were bound to create difficulties and complicate the alignment of interests. The United States and Canada were the only two fully industrialized democracies in the Americas, which meant that their priorities diverged from those of the Latin American countries, especially when dealing with agricultural subsidies. The two largest Latin American economies were already engaged in their own unique trade strategies: Mexico actively opened its economy to the world through free trade and reciprocal investment agreements; Brazil engaged in export-oriented trade strategies coupled with tight protection of its own domestic markets. Further complications resulted because members of Mercosur, the South American tariff union, were reluctant to lose their preferential status relative to nonmembers, which would be a necessary condition if they were to become FTAA partners.
The United States engaged early on in a negotiation strategy that used preferential access to its own market to gain leverage in convincing reluctant countries to join the union. The FTAA would give preferential access to the largest market in the world, namely the U.S. market, so few countries wanted to be excluded from gaining or improving their access to it. By 2002 the United States had engaged in a parallel strategy of bilateral and subregional negotiations with Chile, Central America, and the Dominican Republic, and announced negotiations with Panama, Bolivia, Colombia, Ecuador, and Peru. This strategy was something of a two-edged sword: It had the potential to undermine the efforts for a unified agreement, but it could also advance bilaterally on issues that were hard to deal with multilaterally.
The negotiations were further complicated by an overlap of deadlines: The Doha Round of the World Trade Organization (WTO) was also scheduled to be completed by 2005. The fate of the FTAA was inevitably linked to that of the Doha Round. Both negotiations had the common objective of eliminating trade barriers. Unfortunately, progress in the FTAA could translate into disadvantages in the WTO negotiations, and vice versa. Concessions granted by Latin American countries in the WTO negotiations had to be automatically granted in the FTAA negotiations, as the former included a larger number of countries. But concessions made at the FTAA table could reduce leverage in WTO negotiations, as Latin American countries would be losing bargaining chips. The conflicts proved fatal. The Doha Round negotiations collapsed in the fifth WTO ministerial meeting on September of 2003 in Cancún and the FTAA negotiations did the same during the eighth FTAA ministerial meeting in Miami in 2005.
A further effort to revive the WTO negotiations was attempted at the sixth ministerial meeting in Hong Kong on December of 2005, without much success. The FTAA has not progressed since 2005. Neither of these initiatives has been cancelled, but they have stalled despite various efforts to revive them.
Regional integration via trade is clearly not a purely technical issue, but one in which political considerations play a major role; consequently, regional trade initiatives can become controversial. Cuba, of course, and subsequently Venezuela under the leadership of president Hugo Chávez, spearheaded the opposition to regional trade-based initiatives. Chavez portrayed them as imperialist instruments of the United States to consolidate and deepen its economic and political control over the region. To counter the U.S. influence, Venezuela and Cuba signed an agreement that would become the foundation of the Bolivarian Alternative for the Americas (ALBA) on December 14, 2004. Bolivia and Nicaragua joined ALBA in 2006 and 2007. With this platform in place, they called for an international alliance to counter the FTAA, especially among the governments of the left in the region. Brazil and Argentina, however, while sympathetic to alternative efforts, have maintained their distance both from ALBA and the FTAA. It is too early to tell what the economic effects of ALBA might be. But it is clear that it has had political effects, by breaking down the consensus that is required for general trade rules to work properly, and by generating a clearly defined opposition to trade-based integration in the region. These effects will undoubtedly last at least until 2010, when some of the governments from the left face elections again.
Economic development is a comprehensive concept that encompasses not only economic growth, but also issues of poverty and inequality, which are among the most pressing and resilient problems facing Latin Americans. The traditional approach to economic development presupposes growth, in the belief that the more economic growth a country can achieve, the more wealth will be available to be redistributed. So long as wealth continues to be distributed unequally, however, economic growth will have scant impact on poverty and inequality, so countries in the region generally utilize specialized social-spending programs to target poverty and reduce inequality. A growth-based economic development strategy also faces shortcomings when the global economy is sluggish or when closely interconnected economies rapidly transmit economic problems from one country to another.
Latin America was severely affected by the economic crises of the 1970s and 1980s, which resulted in increased economic inequality in every Latin American country. According to World Bank estimates, Latin America is by far the most inequitable region in the world, a situation that dates back to colonial times, when a small minority of the population owned the majority of the resources, a pattern reinforced over time through inheritance. When the ownership of assets is so concentrated, an inequitable distribution of wealth and income is difficult to overcome. In a modern economic setting, where income from labor provides an alternative to income from capital, lack of access to education makes it difficult for large portions of the population to get the training they need to command increased wages and overcome poverty. The strata of society with a very low income faces a tradeoff between working for survival in the present or investing in education in hopes of a higher income in the future. Under these conditions, it is not surprising that those in extreme poverty remain in poverty for generations, with very little chance of improving their situation.
During the 1990s, most Latin American governments instituted deep reforms in their economic structures. Countries began opening their borders to trade and reducing tariffs on imported goods, in a reversal of previous inward-looking development strategies. The introduction of new markets and the benefits of specializing in goods that a country can produce more efficiently were expected to generate higher growth rates resulting from enhanced aggregate demand for goods. These reforms were accompanied by greater liberalization in financial markets, under the belief that capital mobility across borders was an essential feature for investment in industries and for financing trade deficits. Neither of these reforms came alone; they were accompanied by a significant rescaling of the size of government. Previously state-owned industries were sold in an effort to induce more efficient management, but also to reduce the size of the budget and deficits, all extremely high in many Latin American countries. With these reforms in place, a call for the sustained implementation of sound economic policies also appeared. As a result, countries emphasized controlling inflation, the role of independent central banks, reduction of government deficits, and balanced budgets as standards that would reduce the likelihood of economic contagion as crises arose elsewhere in the world.
As a result of the peso crisis in 1994–1995 and the Asian crises of the late 1990s that reverberated across Latin America (and especially in Brazil and Argentina), the region did not show the vigorous growth economists expected. Consequently, there was little room during this time to effectively cope with poverty and inequality. According to United Nations estimates corresponding to 2004, 19 percent of the population in Latin America is rated as extremely poor, and 43 percent as poor. Extreme poverty in Latin America did decline by about 4 percent during the 1990s. But it is important to note that extreme poverty rates vary widely across countries. Honduras ranks highest with approximately 54 percent of its population under the poverty line, Mexico and Brazil are at about 13 percent, and Uruguay about 2 percent according to United Nations' projections for 2002. Despite the overall decline in extreme poverty levels, inequality did not change much during the decade, as the ratio between the richest and the poorest quintiles of society remained nearly unchanged.
Recognizing that robust growth rates do not necessarily translate into a reduction of poverty, governments in Latin America have engaged in programs that aim instead at breaking the cycle. These programs are considered an investment in human capital, designed to encourage poor families to keep their children healthy and in school for longer periods of time. If new generations are healthy, well nourished, and well educated, they will be likely to achieve higher incomes than the previous generation. If this pattern is reproduced in the following generation, poverty could be drastically reduced over time, with the appealing feature that the effect would be sustainable, being the result of human capital, which cannot be taken away from the individual once it has been obtained.
Most programs aim to generate incentives for parents to keep their children in school and obtain regular medical attention. Some offer cash incentives to families as long as their children attend the local public school and receive medical attention at local public clinics. If the money offsets the income children could provide by working, parents can afford to keep their children in school, and the resulting potential for higher earnings should allow future generations to break free of the intergenerational cycle of poverty. Perhaps the best known among these programs are Progresa-Oportunidades in Mexico and Bolsa Família in Brazil. Progresa, started in 1997 by the Zedillo administration, targeted children in families below the poverty line in rural areas. Five years later, its scope was broadened to include some urban areas as well; its name was changed to Oportunidades under the Fox administration. In Brazil, Bolsa Família, launched in 2003, targets families using a similar approach.
Despite these efforts, the only country in Latin America that has come close to eliminating extreme poverty is Chile. This occurred as a result of a two-pronged strategy. On the one hand, Chile achieved what has been dubbed growth with equity, a program of trade-based growth with a commitment to a permanent budget surplus as protection against potential shocks to the economy that would require cutting back assistance to the poor. On the other hand, it implemented a comprehensive poverty-reduction program that included raising minimum wages, instituting subsidies for poor families, and expanding social expenditures in health, housing, and education. The sustained implementation of this strategy over three administrations and eighteen years was successful enough to eliminate extreme poverty. This was supplemented in 2002 by a new program, Chile Solidario, which specifically targets families and provides temporary aid in the form of a guaranteed minimum income, access to social services, schooling for children, and training for the adults in the family to obtain stable jobs.
Venezuela has used a different approach to reducing poverty, based on social missions (misiones) that bring services such as health care, schools, and roads to the poor in an ad hoc scheme financed by oil revenues. The program has produced short term results, but the long-term effects and sustain-ability of these policies are still questionable.
Eradicating poverty and inequality in Latin America is an ambitious goal that requires the commitment of both the governments in the region and international agencies. A variety of programs have been attempted, with varying degrees of success. A trade-based approach was proposed in the World Trade Organization's Doha Round negotiations, which stalled over issues including access to agricultural and textile markets in the developed countries, an issue of particular importance for the developing world. Implementation would require a coordinated reduction of subsidies, tariffs, and other trade barriers that would permit developing countries, including those in Latin America, to export more agricultural goods, which would eventually translate into increased growth.
A more comprehensive approach has been advocated by the United Nations as part of its Millennium Development Goals. Proposed programs include debt forgiveness for heavily indebted poor countries (HIPCs), which in Latin America include Bolivia, Guyana, Honduras, and Nicaragua, and increased official development assistance (ODA). These efforts underscore the importance of poverty relief, reduction of inequality, and economic development on the main agendas of international organizations.
None of the issues facing Latin America can be adequately defined in isolation. Developments in one area are likely to have an influence on other issues, directly or indirectly, throughout the region. The ideological orientations of governments, the domestic programmatic priorities in each country, the ad hoc coalitions generated among countries, previous historical developments and current agendas, all contribute to the constantly changing landscape in a complex and diverse hemisphere.
See alsoDemocracy; Drugs and Drug Trade; Economic Development; Free Trade Area of the Americas (FTAA); Human Rights; Mercosur; Migration and Migrations; North American Free Trade Agreement; United States-Latin American Relations.
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Jorge G. CastaÑeda
Marco A. Morales