Wednesday, April 2, 2008

Can Washington Regain Interest in Latin America?

Can Washington Regain Interest in Latin America?
The presidential race in the United States and whether the next American president will come from the Democrats or the Republicans have important impacts for Latin countries. Tom Trebat, has (convincingly) argued that the positive aspects of Obama as the next US president and what he would do for Latin America. He argues that the Washington politicians and policy makers have given up on Latin countries and some of the countries in the Latam region display indifference about Washington. Opinion polls show that Latin Americans have an increasingly negative opinion of the United States, coupled with growing doubts about the success of Washington-affiliated political and economic reforms during the 1990s.
The gap between the U.S. and Latin America is partly a reaction by Latin America to the United States’ post 9/11 foreign policy agenda. Latin America was not central to the global war on terrorism. Moreover, China captured the economic imagination of the U.S. However, one must recognize that Latin America itself bears some responsibility for Washington’s lack of interest in the region. Latin America’s slow growth reflects its failure to fully implement the so-called Washington Consensus – not the failure of Washington Consensus policies. In brief, the United States lost interest in Latin America both because US foreign policy changed (the pressing need to fight terrorism) and because Latin America failed to implement the economic reforms needed to compete with China.
Indeed, most Latin countries failed to implement the main aspects of the ‘Washington Consensus’ and as a result, failed to credibly consolidate macroeconomic stability and support sustained growth. On the political front, Latin countries displayed progress and have stable democratic regime. It is puzzling that economists and political analysts keep praising China and its economic performance without mentioning the dictatorship type of regime. Hugo Chavez, the Venezuelan president, tends to be more of an apprentice especially when compared to the not-so-soft Chinese leaders. In any case, we all know that Latin America countries still need to take additional steps to reduce poverty and inequality, in order to achieve high and sustainable growth rates.
The fact that US lost interest in Latin America does not suggest a severed relationship but something more related to the deep economic problems almost all the countries in South America experienced during the 1990s. On the other hand, as explained by Tom Trebat, republicans have never cared about the region. All in all, I think that as long as we have a democrat as the new US president, Latin countries will get closer to Washington than ever before. Nowadays, Brazil, Mexico, Chile, Peru have stable economies and tend to move forward with their structural reforms. I have no doubts that a new democrat president will regain interest in the region mainly because they are aware of the economic potential of these countries that could be bring positive spillovers across the Americas.
We know that dictatorship-types of regimes display higher growth than democratic types. If Latin countries did not implement ALL the so-called structural reforms, they did conquer democracy. For those that argue that China is more democratic than Brazil, for example, because you can afford to send your kids to school, I suggest they spend sometime in rural China to see what is going on out there. In any case, we all know that Latin America countries still need to take additional steps to reduce poverty and inequality, in order to achieve high and sustainable growth rates.

No comments:

Post a Comment