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The Past, Again

Reading today's headlines from Latin America, the situation seems eerily similar to the cold war years. A new bout of political instability would prove very costly.


REPORTING ON THE RECENT recent visit of Secretary of Defense Donald Rumsfeld to South America, the New York Times headlined its article, "Like Old Times: U.S. Warns Latin Americans Against Leftists." Specifically, the article claimed that Rumsfeld’s warnings about the destabilizing activities of Cuban President Fidel Castro and Venezuelan President Hugo Chavez "had the throwback feel of a mission during the cold war, when American officials saw their main job as bolstering the hemisphere's governments against leftist insurgencies and Communist infiltration." The article implied that Rumsfeld was living in the past, viewing today’s Latin America through the distorting lens of the cold war years.

It is true that Rumsfeld's words seemed a throwback to the past,
but the New York Times is incorrect in belittling and rejecting the relevance of the cold war years to today’s realities. Rumsfeld’s concerns seem stuck in the past precisely because in important ways Latin America also is stuck in the past.

During the Cold War, Latin America was vulnerable to Communist penetration for a number of reasons. These included weak, ineffective democratic governments that were plagued by corruption. Efforts to hold government officials and politicians accountable for their actions generally failed, in part because the rule of law was very weak and judicial systems did not function well. At the same time, there was a large and dangerous gap between the rich and the poor, with the latter often feeling that their interests were not represented by the governments they had elected. The combination of alienation from government and inadequate education made the large numbers of poor people susceptible to charismatic, populist leaders who promised to change things by giving them what they did not have.

READING today's headlines from Latin America, the situation seems eerily similar to the cold war years. Mass demonstrations in Bolivia and Ecuador have already driven several presidents from office, cut oil production in Ecuador and kept Bolivia from profiting from its large deposits of natural gas. The territorial integrity of Bolivia is also at risk. Brazil is caught in a corruption scandal that has paralyzed the government. The president could be impeached or he could resort to class-based populist appeals to maintain lower-class support, thereby undermining recent economic achievements. Peru's president has also has been accused of corruption and currently has an approval rating of 8 percent.

To make matters worse, Venezuela's president is using democratic processes to create an increasingly authoritarian and militarized regime. He also is using petrodollars to support Marxist guerrilla groups in Colombia and populist and anti-American leaders elsewhere in the region who oppose market economies and who promise to revive the statist development schemes that led to the debt crisis of the 1980s. Finally, the significant decline of foreign investment in Argentina because of the government's repudiation of its debt is causing the demand for goods and services to outstrip their supply, resulting in the resurgence of inflation that is expected to increase rapidly after the October elections.

THIS IS NOT a picture that inspires confidence in the future stability of the region. This is why Secretary Rumsfeld said what he did during his recent trip. Obviously the geopolitical consequences of instability today are not the same as those prevailing during the Cold War, since the Soviet Union no longer exists. Despite the absence of a second global superpower, however, a new bout of political instability would prove very costly to Latin America. It would lead to increased violence, less investment, slower economic growth, a further loss in global competitiveness and a greater probability of undemocratic governance.

Latin America needs to do more to reduce its persistent political and economic vulnerabilities. This involves figuring out what kinds of incremental improvements are needed to make democracy and market economies work better, and then trying to persuade the population why such changes are in its interest. Increasing the transparency of political and economic processes would be a good place to begin, followed by political and legal reforms to make public and private sector officials more accountable for their abuses of power. Achieving such changes will not be easy, but it will be far less difficult than changing course in order to revive strategies and processes that collapsed in the 1980s under mountains of debt.

Susan Kaufman Purcell, is director of the University of Miami's Center on Hemispheric Policy and the author of several books on Latin America, including Mexico Under Fox and Cuba: The Contours of Change. Prior to her current position, she was vice president of the Council of the Americas for 16 years and has also served as senior fellow and director of the Latin America Project at the Council of Foreign Relations. This column originally appeared in Spanish in AmericaEconomia magazine.

Originally published October 2005

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