U.S. Neglect of Latin America Poses Risks for Both

With Washington alternately threatening and cajoling, many of the nations of Latin America over the past decade have made large strides in reforming their economies and political institutions. The result was supposed to be greater hemispheric cooperation and prosperity for all. Yet in the wake of Sept. 11, 2001, many Latin Americans find themselves feeling profoundly neglected as the U.S. single-mindedly pursues its newfound mission of combating global terrorism.

 

That neglect could indeed become a serious problem for Latin America, according to Jorge F. Quiroga, the former president of Bolivia. “It’s a great danger for Latin America because the United States is concentrating on security issues that are not necessarily in Latin America’s backyard,” Quiroga told Wharton’s 4th Latin American Regional Alumni Meeting in Miami. “There’s a danger that between the debates for funding and resources that flow for security and the ones that flow for poverty, Latin America … may fall through the cracks.”

 

But rather than complain to one another about that neglect, Latin American nations must continue to pursue their internal reforms while finding new ways to mobilize support and bring their plights to the attention of the United States, Quiroga suggested.

 

Strengthening democracy, battling corruption and improving education are the three highest priorities that Latin American nations can undertake on their own, he said. Noting that in the last four years, six of 10 elected Latin American leaders failed to finish their term in office (including his own predecessor, Hugo Banzer, who stepped down in August 2001), Quiroga pointed out that in every case a solution was found under the constitutional rule of law. But he admitted that the process wasn’t always pretty and that more attention needs to be paid to formal mechanisms for succession, perhaps along the lines of European parliamentary systems. “We need to discuss constitutional solutions to terminal political problems,” he said.

 

One reason for the feelings of neglect, Quiroga suggested, was the apparent failure of the Washington Consensus, a set of goals established more than a decade ago that were intended to lead to more stable economies in Latin America. The problem, Quiroga said, lies not so much with the goals themselves, but with Argentina’s failure to achieve political and financial stability. The primary lesson to be learned from Argentina’s problems, he added, is that low inflation is best achieved through fiscal policy, not exchange policy.

 

While economic reforms will be an important part of the development process for Latin America, Quiroga said government institutions such as the judiciary and tax collection agencies are the real engines that make a country function. But they can only be useful tools in achieving stability and growth if they work efficiently and fairly. In many nations in Latin America, he said, “the civil service is non-existent,” the result of elected politicians who promise and make immense changes in government institutions, to be followed by the next politician who makes his own sweeping changes.

 

That process of “revolution by destruction” contributes to corruption and prevents ordinary citizens from understanding and utilizing government services. What Latin American countries need, he said, is “evolution by construction,” a process that provides continuity in government agencies and that makes government services easily understood and accessible. Bolivia is adopting reforms aimed at providing oral rather than written explanations of government policies and laws in order to make government accessible to illiterate citizens.

 

Poverty clearly is an all-pervading concern among Latin American nations and one that often seems intractable. Yet Quiroga said that when he travels to other Latin American countries, he gets a fix on how well a country understands the ultimate solution to poverty by asking a simple question: “How many days of public schooling do your children receive?” In Bolivia, children are in school 170 days out of the 200 days available; in Honduras, children receive only 110 days of education. While nearly 60% of Bolivians still live in poverty, he said, that’s better than the 86% who lived that way 25 years ago and the 70% that lived in poverty 10 years ago.

 

Meanwhile, getting the United States’ attention refocused on relations with Latin America won’t be easy, but it isn’t impossible, Quiroga noted. Policymakers in Washington apparently don’t realize that Latin America has economies the size of China and India, energy resources larger than those in Iran or Iraq, and nations whose serious financial problems could hurt the U.S. economy. At the same time, the United States is a place where votes count and Hispanics are the second largest voting bloc in the country.

 

“Why do we have to wait for the United States to put an agenda forward?” he asked. “Why don’t we do it ourselves?” He cited as an example the United States’ desire for energy independence. While it’s unlikely that the U.S. could achieve that goal in the foreseeable future, it could and should be persuaded to think more about the energy resources present in the Western Hemisphere. “We have a chance to achieve hemispheric energy independence,” Quiroga said.

 

The single most painful issue that Latin America needs to pursue with the U.S. is trade, according to Quiroga. Much of Latin America depends upon exports to the U.S. to improve standards of living, yet the region faces enormous barriers in two of the areas in which it could be most productive: labor-intensive manufactured goods and agricultural products. Labor-intensive manufactured goods face particularly onerous barriers that heavy penalize the very countries that would most benefit from increased trade flows.

 

Quiroga said that nations in which the average citizen earns over $2-a-day face 6% tariffs on labor-intensive manufactured goods while those countries in which the average wage is less than $2 a day must overcome 14% tariff barriers. At the same time, agricultural subsidies paid by the United States, Europe and Japan to their farmers make similar products from Latin America uncompetitive. Quiroga recalled that when he was trying to negotiate an agreement for textile trade between the U.S. and Bolivia, he was told that Bolivia – a landlocked nation seven hours by air from the United States – would have to use U.S.-grown cotton.

 

He likened the problem of trade with the developed world to a one-sided soccer match in which Latin American countries were allowed to score goals only with their heads, not their feet, could not come close to the opponents’ goal and had to make their own goal larger while their opponents’ goals were made smaller.

 

Quiroga suggested that the United States might be a little more understanding of Latin America’s struggle to modernize if U.S. politicians were aware of the alternative to improved agricultural trade. Consider cocaine as a cash crop: There are four harvests a year, the resulting product is lightweight and easy to transport, it has high value-added content for the producers and there are no real tariffs or import barriers.

 

Finally, the tremendous migration of Latin Americans to the United States over the past few decades gives Latin American countries a vast, albeit unorganized, voting bloc in the U.S. If immigrants there could be organized to reflect the needs and desires of their relatives and friends who remain in the home countries, said Quiroga, that voting bloc could be an effective force for change within the U.S.

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