Mark Weisbrot | Center for Economic and Policy Research
"State of Denial" is the title of Bob Woodward's famous book on the Bush team's road to disaster in Iraq, but it would have served just as well for a description of their Latin America policy. The president’s seven-day, five-country trip to Latin America to see if he can counter the populist political tide that has brought governments on the left to about half the population of the region.
Carrying vague promises of a joint effort on ethanol production - but no offer to lower tariffs protecting the U.S. market - President George W. Bush hopes to entice Brazil into taking his side against his nemesis, President Hugo Chavez of Venezuela. This is a fantasy.
President Lula da Silva of Brazil made a point of visiting Venezuela for his first foreign trip after being re-elected last October. There, he presided over the dedication of a $1.2 billion bridge over the Orinoco, financed by the Brazilian government, while he lavished praise on Mr. Chavez and gave the popular Venezuelan president an added boost in his own re-election campaign. The Bush administration's policy of trying to isolate Venezuela from its neighbors has only succeeded in isolating Washington. Recently, President Nestor Kirchner of Argentina, speaking in Caracas, flatly rejected the notion that Argentina or Brazil should "contain President Chavez," whom he called "a brother and a friend." In another thinly veiled swipe at Washington, Kirchner said: "It cannot be that it bothers anyone that our nations become integrated." At the same time, he announced that Venezuela and Argentina would jointly issue a "Bond of the South" for $1.5 billion.
If Washington is in denial about the political reality of Latin America, it is even more in denial about the economics there. For 25 years, our government has pushed a series of reforms throughout the region: tighter fiscal and monetary policies, more independent central banks, indiscriminate opening to international trade and investment, privatization of public enterprises, and the abandonment of economic development strategies and industrial policies. The Bush team thinks that these reforms, known as "neoliberalism" in Latin America, were just the right formula to stimulate economic growth.
In fact, Latin America's economic growth over the last 25 years has been a disaster - the worst long-term failure in more than 100 years. From 1980 to 2000, its Gross Domestic Product (GDP) per person grew by only 9 percent, and another 4 percent for 2000 to 2005. Compare this to 82 percent for just the two decades from 1960 to 1980, and it is easy to see why candidates promising new economic policies have been elected (and some re-elected) in Argentina, Bolivia, Brazil, Ecuador, Nicaragua, Uruguay, and Venezuela. They also came close to winning in Mexico, Peru, and Costa Rica.
The left-leaning governments that have introduced new economic policies have done pretty well: Argentina has grown by a phenomenal 8.6 percent annually for nearly five years, pulling more than 8 million people out of poverty in a country of 36 million. Bolivia has increased government revenue from hydrocarbons by about 6.7 percent of GDP, an amount that would equal $900 billion in the United States, and is using the additional revenue to help its poor majority. Venezuela is also using the government's increased take of oil production to provide health care, education, and subsidized food for the poor. All of these governments have succeeded by implementing policies that Washington opposed.
President Bush got a good reception from the right-wing governments he visited: his close allies in Mexico, Colombia, and Guatemala. Colombia is in the midst of a huge national scandal over the responsibility of government officials for mass murder and assassinations of political opponents. More trade unionists are killed in Colombia each year than in the rest of the world combined. Guatemala is another right-wing ally with a terrible human rights record: Recently, a Guatemalan police death squad murdered three Central American parliamentarians. All three governments have been linked to narco-trafficking, but President Bush will likely praise them for their cooperation in the war on drugs.
It's all about denial. The political and economic changes sweeping Latin America are a serious break with the failed policies of the past. Washington's influence there has collapsed, and is not likely to recover.
