The Washington Diplomat / February 2008
By Larry Luxner
With all 34 countries south of the Rio Grande now enjoying the fruits of democracy to one extent or another, the United States has not generally focused much attention on the region, with the glaring exception of Venezuela, ruled by populist President Hugo Chávez, and Cuba, where Fidel Castro's failing health has raised questions about the island's future.
Those two countries, not to mention Chávez's warming ties with Iranian President Mahmoud Ahmadinejad, concern the Bush administration, which is widely percieved as having ignored Latin America in the six years following the Sept. 11 terrorist attacks.
Col. Lawrence Wilkerson, who for many years was the "right-hand man" of former Secretary of State Colin Powell, calls the Bush policy one of total neglect.
"We're not using our power very well in general, and certainly not vis-a-vis Latin America," said Wilkerson, who's now a professor. "Here we are with a city in our own country, Miami, that is increasingly becoming the financial capital of Latin America, and we have one of the worst relationships with Latin America that we've had in a long time. Despite the fact that we occasionally send a hospital ship down there, or that we put National Guard reserves in Honduras to build this school or that school, there is very little U.S. attention paid to Latin America, and I think that's a grievous mistake."
With regard to Cuba, President Bush has relentlessly pursued an anti-Castro policy, squeezing the Havana regime of hundreds of millions of remittance dollars and preventing Cuban-American exiles from visiting their families on the island — all in the name of promoting a "transition to democracy."
Yet the rest of Latin America sees this as bullying.
"We believe that isolation is not the way forward. It's not constructive," said Antonio de Aguiar Patriota, Brazil's ambassador to the United States. "The UN resolution condemning the U.S. embargo [overwhelmingly approved last October by a vote of 184-4] speaks for itself."
Brazil, which by itself accounts for more than half of Latin America's size and population, is governed by a highly popular social-democratic president, Luiz Inácio Lula da Silva. Lula, whose term ends in 2010, was for years an outspoken trade unionist; today, he's viewed as an effectve leader who has managed to halve Brazil's poverty rate while keeping foreign investment flowing into the country.
"We've been very fortunate in Brazil to have a leader of the stature of Lula, who is above and beyond a depiction of leftist or rightist — a man of dialogue, who built his career as a negotiator," Patriota told the Diplomat. "From the beginning, he negotiated increases in salaries and better working conditions. He ran four times for office before being elected."
Patriota said bringing democracy to the region is about more than holding free and fair elections; governments must act decisively to improve their citizens' standard of living.
"These categories of leftists and rightists don't apply so well to what's happening today in South America. They don't capture the political dynamics of the moment. These days, democracy is taking root; all governments in South America are democratically elected. But there's a common perception that without dealing with social challenges, our economic growth will not be sustainable, and our democratic development will remain unsatisfactory. So we think the state must participate in reducing poverty and combatting hunger."
In mid-January, Lula visited Cuba, offering the communist-run island a $1 billion line of credit for a wide range of items vital to the island's survival — from roadbuilding and food products to nickel mining and offshore oil exploration.
Yet the Bush administration isn't protesting too loudly; Lula is now one of its strongest allies in the region, despite his lifelong dedication to socialism and friendship with Fidel Castro.
"Washington is acutely aware of the close ties between Chávez and Castro," notes David Adams, veteran Latin America correspondent for the St. Petersburg Times. "Having Brazil raise its economic profile in Cuba may be no bad thing for the United States, as it potentially dilutes the influence of Chávez at a time when Castro's star appears to be waning."
Of course, things may change dramatically with the inauguration of a new U.S. president in January 2009. Both leading Democratic contenders, Hillary Clinton and Barack Obama, favor relaxing the Cuban-American family travel restrictions — Obama more so; it's unclear what changes a new Republican president might make with regard to Cuba policy.
"A beginning of more normal relations with Cuba would open new doors for U.S. relationships with Latin America," says Wilkerson. "It would also take away a lot of Hugo Chávez's appeal immediately."
In early December, Chávez narrowly lost a crucial referendum that, if passed, would have eliminated presidential term limits and turned Venezuela into South America's first socialist state. At the same time, two other countries — Ecuador and Bolivia — are considering changes to their constitution that would bring their policies more in line with what Chávez calls "21st-century socialism."
Bolivia's populist president, Evo Morales, has proposed changes that appeal to the poorest segments of the indigenous population, such as eliminating current term limits for presidents and moving Bolivia in a socialist direction economically, while another Chávez protégé, Rafael Correa of Ecuador, would like to permanently shut down Ecuador's opposition-controlled legislature.
At the other end of the spectrum is Argentina, where voters in October elected a woman president for the first time in their country's history: 54-year-old Cristina Fernández de Kirchner, wife of former President Nestor Kirchner. Neighboring Chile also has a female president, Michelle Bachelet. Both countries are enjoying relative prosperity, with economic growth and foreign investment expected to continue on track in 2008.
This year, according to the UN's Economic Commission for Latin America and the Caribbean, the region should register a 4.9% growth rate. Although that's down slightly from the 5.6% recorded in 2007, it would mark the sixth consecutive year of growth.
At the same time, unemployment dropped from 8.6% in 2006 to 8.0% in 2007, with projections for 2008 suggest continuing decreases in the jobless rate to 7.6%.
Another 2007 trend was the sharp increase in formal employment. Argentina, Brazil, Chile, Costa Rica, Mexico, Nicaragua, Panama and Peru all registered increases of some 5% or more during the first semester or the first three quarters of the year, according to ECLAC. In fact, in 2007 growth in formal employment exceeded that of informal employment in Colombia, Ecuador, Venezuela and Uruguay.
Mexico, the largest U.S. trading partner in Latin America, has its own challenges to contend with: boosting falling oil production, putting a lid on drug-trafficking and border violence, and shoring up the economy to discourage immigration to the United States.
Within that context, President Felipe Calderón — inaugurated in December 2006 after a razor-thin and bitterly contested election victory over populist Andrés Manuel López Obrador — says his country is doing a pretty good job.
"Latin America faces a critical choice. It is a choice between the past and the future, between returning to authoritarian systems and strengthening democracy, between protectionism and more open markets — and between the wastefulness of populist measures and a responsible balance in public finances," Calderón wrote in a guest editorial for The Economist.
"Mexico is determined to become one of the world's best destinations for investment, since greater investment is the base for economic growth and job creation," he continued. In the first half of 2007, the inflow of foreign direct investment reached a record $13.2 billion. And in spite of the weakening performance of the American economy with which we are strongly linked, more than 825,000 registered new jobs were created between January and October. These good results, and the changes that are in prospect, strengthen our conviction that in 2008 the world will view Mexico with renewed optimism."