*** U.S. POLICY IN LATIN AMERICA AND CARIBBEAN ***
(Ed. Note: President Clinton's trip to Central America presents a good
opportunity to reflect on the state of U.S. policy in Latin America and the
Caribbean. The Foreign Policy In Focus project has just released a special
report on this
subject by Coletta Youngers of the Washington Office on Latin America.
Portions of this report are excerpted below. )
U. S. Policy in Latin America: Problems, Opportunities, Recommendations
by Coletta Youngers
Comparing conditions in the Western Hemisphere today with the situation
fifteen years ago, there appears to be much room for optimism. The armed
conflicts in Central America, which were at the center of policy debates in
the United States, have all ended with negotiated solutions, and the
authoritarian dictators that ravaged South America were one-by-one replaced
by elected civilian officials. Massive government-sponsored human rights
abuses have declined dramatically as a result, and economic growth has
resumed after a lost decade.
Upon taking office, senior Clinton administration officials painted this
rosy assessment of regional trends and proposed a foreign policy agenda for
Latin America centered around the concept of "enlargement and engagement,"
based on the now-familiar arguments that open economies foster growth and
allow greater political freedoms and that democracies make more reliable
allies. With the exception of Cuba, they point out, every country in the
hemisphere is on the same economic and political track, headed toward the
completion of a free trade alliance from Alaska to Tierra del Fuego to be
established by the year 2005. Waving the free trade banner, the Clinton
administration has made promoting U.S. economic interests its number one
priority in U.S. policy toward the region. In an interview with the New
York Times just prior to beginning his second term in office, President
Clinton boldly proclaimed that pursuing free trade agreements with Latin
American countries would be among his highest priorities during his second
term.
Clinton, however, did not live up to his word, and shortly into his second
term Latin America faded from the administration's agenda (with the
important exception of the "war on drugs"). More importantly, the Clinton
administration's message rings hollow for the vast majority in Latin
America and the Caribbean who have failed to benefit either from democracy
or economic growth, which has not trickled down as promised. Elected
civilian governments remain fragile and are threatened by continued
military impunity and weak institutional guarantees of fundamental civil,
political, and individual rights. Today there is mounting evidence that the
obstacles to democratic consolidation are growing and that the neoliberal
economic model is simply not capable of addressing fundamental problems
like the lack of employment opportunities and the inequitable distribution
of income and resources. Moreover, it fails to take into account the very
real danger of sharp reversals in the positive regional trends of
democratization, demilitarization, and greater respect for human rights.
Income Disparities Remain Unaddressed
Poverty, lack of access to land and resources, and tremendous income
disparities remain fundamental problems that have yet to be addressed
adequately throughout the region. According to the UN Economic Commission
for Latin America and the Caribbean (CEPAL), during the first half of this
decade the proportion of the population living in poverty has decreased
slightly (from 41 percent in 1990 to 39 percent in 1995); however, the
number of people living in poverty has increased significantly due to
population growth. Some 75 million more people live in poverty today in the
region than in 1980. The Latin American region continues to have the
highest level of income inequality in the world, a situation that has seen
virtually no improvement in most countries and has deteriorated even
further in some. Despite average annual growth rates of 3.2 percent since
1990, the richest 10 percent of households maintained or increased income
levels, while the poorest 40 percent held steady or experienced decreased
income. In other words, the modest and even, in some cases, exceptional
economic growth rates of the 1990s have not led either to fewer people
living in poverty or to a more equitable distribution of income.
Nor has economic growth resulted in stability, as evident in the economic
crises in Mexico in 1994 and Brazil in 1998, both leading to billion-dollar
bailout packages. Illustrative of the fragility of the region's economy, in
Mexico investor flight led to near-economic collapse as nervous investors,
able to move millions with a click on the keyboard, pulled out capital
overnight, thereby revealing the fragility of economies built on
short-term, high-yield investments rather than long-term investments in
infrastructure and industry. The tendency toward speculative investment
means that more jobs are lost than created in countries like Mexico, where
nearly 2 million jobs have been lost (even taking into account employment
in the maquiladora sector) since the North American Free Trade Agreement
(NAFTA) went into effect. Despite decades of free-market and structural
adjustment policies, high unemployment and widespread underemployment-and
hence pervasive poverty-remain rampant in the region.
Brazil's economic crisis has already hit Argentina and threatens to spill
over into other parts of the region, and will likely stifle growth rates
for 1999 and beyond. The response of the International Monetary Fund (IMF),
calling for more belt-tightening by the Brazilian government in order to
restore investor confidence, will exacerbate poverty even further -
particularly in rural regions of the country long neglected by the central
government. The sharp price increases resulting from the IMF "remedy"
affect everyone, but have hurt the poor the most.
Even World Bank and other IFI officials now recognize that the focus on
market-driven economic growth alone is unlikely to reduce poverty and lead
to greater equality. Both the World Bank and the Inter-American Development
Bank are engaged in a range of projects designed to strengthen local
institutions, build human capital, and improve education. Yet as a result
of the mandatory fiscal restraint required by the IFIs, local governments
have vastly fewer resources to invest in development programs than in the
past, and U.S. development assistance has dropped to an all-time low.
IFI-supported safety net programs may be too little too late, because they
ignore the structural causes of poverty and underdevelopment. Economic
power remains in the hands of traditional and new elites, who have been the
main beneficiaries of reforms. For them, "globalization" has meant the
opportunity to invest capital wherever in the world it can bring the
greatest return at the least risk.
Hurricanes and Short-Sighted Policies
Hurricane Mitch, which devastated Central America in November 1998, marks a
shift toward much greater poverty in the countries affected, particularly
among the rural poor. It left millions homeless, damaged already-limited
rural infrastructure, and destroyed both grains and export crops. The
United Nations Development Program estimates reconstruction costs at more
than $5.3 billion. Some of the damage was the result of the most fierce
meteorological event to strike the isthmus in 200 years. But it is also
clear that the destruction was made that much more catastrophic by
short-sighted agricultural policies. National governments and the IFIs have
failed to formulate and fund policies that support sustainable rural
development. Destructive practices-including clear-cut logging, hillside
farming, and degradation of topsoil by over-cultivation of marginal
land-exacerbated the mudslides and flooding caused by the torrential rains.
The Clinton administration's 1999 package of nearly $1 billion for debt
relief and long-term reconstruction programs for the Central American
countries hit hardest by Hurricane Mitch (and to a lesser extent to address
hurricane and earthquake damage in Haiti, Puerto Rico, and Colombia) is an
important step forward. But too much of this aid is being channeled through
the U.S. military, and the debt-relief measures fall far short of what is
needed. Central American countries also need new U.S. trade policies that
ease restrictions on regional exports and development policies that
prioritize the poor, focus on rural development and sustainability, and
allow for the involvement of civil society organizations in their design
and implementation.
The U.S. aid package to Central America represents the first significant
infusion of economic assistance to the region in more than a decade.
Dwindling U.S. foreign aid has increased the importance of direct foreign
investment and IFI loans in the provision of foreign capital to Latin
America and the Caribbean. Nonetheless, Washington remains the most
important external actor because of the markets and investment that the
United States represents and also in part because of the influence its
wields within the IFIs. In addition to the traditional U.S. hegemony in the
region, U.S. economic interests have expanded as "globalization" trends
have taken hold. U.S. exports to Latin America and the Caribbean have
tripled in the last ten years to the point where almost half of all U.S.
exports to developing countries go to the Latin American region; within ten
years Latin America is expected to be the primary market for U.S. products
and services. Mexico now rivals Japan as the second largest U.S. trading
partner. Goods purchased from the United States represent more than forty
percent of all imports by countries in Latin America and the Caribbean, and
nearly 60 percent of all foreign investment in the region comes from the
United States. The hemisphere is well on its way toward economic
integration, with or without "fast track."
Toward a New Policy
>From United Fruit to Lockheed-Martin and McDonnell-Douglas, U.S. companies
have helped shape-and have sometimes dictated-U.S. actions in Latin America
and the Caribbean. U.S. domestic interests have historically played a
preponderant role in U.S. policy toward Latin America and the Caribbean,
and its importance has only grown in the post-cold war environment. If U.S.
policymakers were willing to stand up to narrow political and economic
interests and to play a leadership role in unmasking the "threats" from
abroad, they could reshape U.S. policy toward the hemisphere in fundamental
ways. Washington must address the asymmetrical power relations between
Latin American countries and the United States by integrating Latin
American viewpoints into U.S. foreign policy, allowing countries to
determine their own national development paths, and providing the
resources, debt relief and the preferential trade and investment policies
needed to overcome the vast differences in wealth and power between North
and South.
Specific Recommendations
Three concrete steps could be taken to move in a new direction. First, the
U.S. government should make poverty elimination the centerpiece of its
policy toward Latin America and should redirect economic resources toward
that end-even if that means cuts in the virtually untouchable defense
budget. Second, Washington should recognize that it will never be able to
solve the very real problems of illicit drug abuse and drug-related
violence through military action overseas. Though the U.S. can and should
provide resources both for judicial and police reform and for alternative
development efforts in Latin America, illicit drug control efforts should
prioritize treatment and education efforts in the United States. Likewise,
Washington should resist the temptation to support militarized solutions to
the very real problem of crime sweeping Latin America and should instead
focus on the difficult task of promoting long-term institutional reform and
the strengthening of civilian institutions, such as the judiciary. Such
reform processes must be participatory to be successful, incorporating
civil society and citizen involvement.
Finally, Washington should act more forcefully to promote democratization
trends in Latin America by eliminating U.S. security assistance to military
forces, strengthening the capacity of local elected civilian governments
and citizens to define the role of those forces, and speaking out more
aggressively to defend democracy when transgressions occur. A range of
other initiatives should be adopted as well, including an end to the Cuban
trade embargo, the initiation of a policy of constructive engagement toward
Cuba, and at least a two-year moratorium on the sale of sophisticated
weapons to Latin American governments.
In this post-cold war era, with democratically elected governments in place
throughout most of the region, there is a historic opportunity to transform
Latin America policy beyond mere calculations of opportunities and threats
to an outlook of engaging the region's citizens and leaders in constructing
a common vision of the hemisphere's promise-a promise of durable and
inclusive democracy, respect for human rights, and sustainable and shared
prosperity.
Coletta Youngers is a Senior Associate at the Washington Office on Latin
America (WOLA). WOLA Executive Director George Vickers also contributed to
this essay.
The Progressive Response is a publication of Foreign Policy In Focus, a
joint project of the Interhemispheric Resource Center and the Institute for
Policy Studies. The project produces Foreign Policy In Focus (FPIF) briefs
on various areas of current foreign policy debate. Electronic mail versions
are available free of charge for subscribers. The Progressive Response is
designed to keep the writers, contributors, and readers of the FPIF series
informed about new issues and debates concerning U.S. foreign policy issues.
We encourage comments to the FPIF briefs and to opinions expressed in PR.
We're working to make the Progressive Response informative and useful, so
let us know how we're doing, via email to irc1@zianet.com (that's irc, then
the number one NOT the letter L.) Please put "Progressive Response" in the
subject line.
------------------------------------------------------
To subscribe or unsubscribe to the Progressive Response, go to:
http://www.foreignpolicy-infocus.org/progresp/progresp.html
and follow the instructions.
For those readers without access to the www send an email message to:
newusfp-manager@zianet.com
with the words "join newusfp" in the body of the message.
To unsubscribe, send an email message to:
newusfp-manager@zianet.com
with the words "leave newusfp" in the body of the message.
Visit the Foreign Policy In Focus website,
http://www.foreignpolicy-infocus.org/iflist.html, for a complete listing of
In Focus briefs and text versions of the briefs. To order policy briefs,
our book Global Focus: A New Foreign Policy Agenda 1997-98, or for more
information contact the Interhemispheric Resource Center or the Institute
for Policy Studies.
----------------------
Erik Leaver
Communications Director
Interhemispheric Resource Center
Box 4506
Albuquerque, NM 87196
Voice: 505-842-8288
Fax: 505-246-1601
Email: leaver@swcp.com
Web: http://www.foreignpolicy-infocus.org
http://www.zianet.com/irc1