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Continental drift

Author: Julia E. Sweig, Nelson and David Rockefeller Senior Fellow for Latin America Studies and Director for Latin America Studies
January 21, 2006
International Herald Tribune

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Although Bolivia is usually off Washington’s radar screen, the inauguration of Evo Morales, the Aymara Indian overwhelmingly elected president last month, portends a new era for U.S.-Latin American relations.

It is one for which the United States is ill-prepared, given its historic antipathy for the left in the Western Hemisphere and our more recent ideological fervor for free markets at all cost.

Although the Bush administration preaches the virtues of democracy, its reaction to the recent surge of left-leaning electoral victories in Latin America has been one hand clapping.

That’s because all these victories—Morales in Bolivia, Nestor Kirchner in Argentina, Michelle Bachelet in Chile—share an anti-American tone to one degree or another. Future elections in Peru, Mexico, Ecuador and Nicaragua are also likely to have an anti-American flavor.

That’s hardly a surprise, given recent and past history.

Latin American politics are no longer mainly about dependence on U.S. muscle and political power. Rather, they are about how to narrow the region’s profound political and class cleavages.

How the new governments will harness their countries’ resources to achieve this goal is the real story unfolding in the region.

The true indication of whether the region’s new leaders can turn democratic accomplishment into a socially inclusive economic agenda will be their ability to recruit their countries’ traditional elites.

Currently, Latin American governments receive only 8 to 15 percent of their GDP from tax revenue about one-third that of industrialized countries. A good measure of elite participation will be whether that rate goes up.

Economies cannot grow without a public sector that invests in roads, healthcare, education and technology, and without an open political and business culture that respects an independent judiciary.

Washington has not been helpful in this regard. Its myopic and increasingly dissonant message of more trade and war on drugs and terrorists offers no answers to the bread-and-butter issues Latin America’s new leaders face. And America’s brand of economic liberalization has failed to motivate Latin elites to invest in their countries.

What should the United States do now?

For all his bluster, President Hugo Chavez exports 50 percent of his oil to U.S. markets, generating over $30 billion a year in revenue for Venezuela at today’s high prices. In Colombia, the United States spends hundreds of millions of dollars to protect an oil pipeline from Colombian rebel attacks.

Morales may grant concessions to China’s state energy company, and Brazil’s Petrobras and Spain’s Repsol already have investments in Bolivia.

But it is not too late for the United States to participate, preferably through the Inter-American Development Bank or the Organization of American States, in a broadly inclusive “blue skies” dialogue on how Latin America can use its energy resources to finance social development and to provide the United States with an alternative to its Middle East suppliers.

Morales and Chavez would no doubt balk at any U.S. initiative that smells of resource exploitation. And U.S. credibility may be far too damaged to engage with the region’s new leaders on such a sensitive issue.

Yet while geography may no longer be political destiny, it most certainly makes for cheaper transportation costs. The calculus of proximity may prevail over ideology.

But only if the Bush administration can, without the usual lectures, take the first step and demonstrate to the new governments and their constituents the U.S. commitment to democracy in the neighborhood.

It can start by acknowledging the gravity of the social challenges that explain the electoral victories of the left.

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