Tuesday, October 31, 2006

Latin America: Forever Continent of the Future

The Lost Continent is the title of a recent Foreign Policy piece by Moises Naim on Latin America.

Back in the days of JFK and the Alianza Para Progeso, the Latins had a collective GNP on average of 25% and were deemed to be the best place to invest for the future. Japan and Korea and Taiwan were still regarded as not quite ready for prime time.

Today, the Latins earn around twenty percent of the US average income. What happened?
Latin America has grown used to living in the backyard of the United States. For decades, it has been a region where the U.S. government meddled in local politics, fought communists, and promoted its business interests. Even if the rest of the world wasn’t paying attention to Latin America, the United States occasionally was. Then came September 11, and even the United States seemed to tune out. Naturally, the world’s attention centered almost exclusively on terrorism, the wars in Afghanistan, Iraq, and Lebanon, and on the nuclear ambitions of North Korea and Iran. Latin America became Atlantis—the lost continent. Almost overnight, it disappeared from the maps of investors, generals, diplomats, and journalists.

Indeed, as one commentator recently quipped, Latin America can’t compete on the world stage in any aspect, even as a threat. Unlike antiAmericans elsewhere, Latin Americans are not willing to die for the sake of their geopolitical hatreds. Latin America is a nuclearweapons free zone. Its only weapon of mass destruction is cocaine. In contrast to emerging markets like India and China, Latin America is a minor economic player whose global significance is declining. Sure, a few countries export oil and gas, but only Venezuela is in the top league of the world’s energy market.

Clowns like Hugo Chavez pirouette around the world peddling Castro-lite nostrums and silly populist slogans. It works in a place as devoid of human capital as the Caracas slums, but why is Venezuela's economy actually shrinking under the Chavez oil-price rise?

And Lula is re-elected president of Brazil. He promises to tax the rich to raise the level of the poor. Sound familiar?

And, except for Chile and Colombia and to a lesser extent, Mexico, most of the big Latin economies are under the influence of magical thinking and magical realism. And not only in the literary genre sense, but in the Evo Morales coke-snorting and Castro-pal Chavez insurgency departments. And how about Ecuador's election run-off?

Glad I didn't opt for the Latino track during my State Dept days.

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