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Jewish World Review March 5, 2002 / 21 Adar, 5762

Michael Barone

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Latin America and the 'war on terrorism' --
While the United States fights the war against terrorism in Afghanistan and elsewhere, it faces other serious foreign policy challenges–many of them south of the border, in Latin America. For most of the 1990s, Latin America seemed headed toward what some Latins called neoliberalism–political democracy, market economics, stable currencies, more open trade. Now, suddenly, large parts of Latin America seem headed backward. Among them:

Colombia. In 1998, President Andrés Pastrana ceded control of several provinces to the narcotrafficking leftist FARC guerrillas and set about negotiating peace with them. But FARCnever responded and last month hijacked an airliner and kidnapped a senator and a presidential candidate. Pastrana has broken off talks; in their place–civil war. The United States has sent troops but only to aid in the drug war; now the State Department hints that we may be able to do more. In the meantime, there is no civil order in this country of 40 million: Colombia has had the world's highest murder and kidnapping rates.

Venezuela. This country, which provides 14 percent of U.S. oil imports, has a president, Hugo Chávez, who increasingly seems loco. Chávez has changed the Constitution, undermined the legislature, and limited needed foreign investment in oil exploration. The economy is stagnant; crime rates have spiked. Chávez has cozied up to Fidel Castro and FARC, and has criticized the U.S. war against terrorism; the U.S. ambassador was recalled for consultations. Chávez's popularity has declined; there is talk of a military coup. Venezuelans have long assumed that their oil wealth entitles them to effortless affluence. Instead, they have stagnation and a sharply declining currency.

Argentina. Argentina is also a country whose people long assumed that abundant natural resources–wheat fields, cattle plains–should produce automatic abundance. But the country stagnated under dictator Juan Perón and feckless generals. Happily, democracy returned in the 1980s, and, in the 1990s, hyperinflation was ended by a currency board that yoked the peso to the dollar. Unfortunately, Argentina's federal and state governments didn't stop spending profligately, with bloated public payrolls and such perks as free cosmetic surgery. So Argentina has been cut off by foreign lenders, while its president resigned in December. The country had five presidents in two weeks; the currency board was abandoned and the peso plunged; the new president, longtime politician Eduardo Duhalde, rails against neoliberal economics and bounces from one policy to another.

Mexico. Since 1995, Mexico has grown robustly, with huge increases in exports, and has developed, finally, a genuine democracy. But ordinary incomes haven't risen much, and the economy has stalled for a year. Vicente Fox stirred imaginations in 2000 when he became the first presidential candidate to beat the PRI in 71 years. But Fox spent much of his first year negotiating a deal with the theatrical Chiapas rebels that was ultimately rejected, and the Congress, in which none of the three major parties has a majority, rejected Fox's tax plan. Fox's attempts to punish past corruption and create honest law enforcement agencies have been brave, but rising crime rates and corruption in law enforcement discourage investment. His push to regularize the status of the hundreds of thousands of immigrants illegally in the United States has been stalled since September 11.

Yet for all these problems, the neoliberal model is not doomed in Latin America. The Chávez alternative is visibly failing; Duhalde is floundering; Fidel Castro has no allure. Latin America's problem is not so much overlarge government, since lenders will no longer finance it. The greater problem is weak government, government that cannot guarantee the civil order without which political democracy is ineffective and market economic growth unnecessarily weak. We have an interest in helping Latin Americans develop competent government. One way is to help the Colombian president elected to succeed Pastrana regain control over provinces abandoned to FARC. Another is to restrain Chávez's antic impulses. Most important, argues the American Enterprise Institute's Mark Falcoff, perhaps the most astute scholar of Latin America, is free trade. NAFTA has prodded Mexico to reduce corruption, free internal markets, and promote democracy. The Free Trade Area of the Americas, promised for 2005, or free trade agreements with other countries, can do this elsewhere. The war on terrorism absorbs great psychic energies. But Latin America, which supplies the United States 33 percent of its oil imports and 44 percent of all immigrants, also has claims on our attention.

Michael Barone Archives

JWR contributor Michael Barone is a columnist at U.S. News & World Report and the author of, most recently, "The New Americans." He also edits the biennial "Almanac of American Politics". Send your comments to him by clicking here.


©2002, Michael Barone