By Peter H. Smith
Venezuelan President Hugo Chavez: "socialism for the 21st century"
-- Arturo Valenzuela, former U.S. official
“The European Union and Latin America are natural partners in reaping the benefits of economic globalization.”
-- Benita Ferrero-Waldner, EU official
Latin America has become an ideological battleground. In the name of democratic stability, Mexico and other countries advocate neoliberal economic policy, close ties with the United States, and gradual social reform. In the name of social justice, Venezuela and its allies espouse statist economics, virulent anti-Americanism, and revolutionary social change. As Jorge Castañeda has remarked, “these two sides are fighting over the soul of Latin America…” Nations such as Chile and Brazil attempt to stand above the fray.
In the meantime, Latin America confronts three possible outcomes: sliding toward the right, slipping to the left, or remaining deeply divided.
To address such questions, this paper unfolds in the following ways:
1. overview of recent developments in Latin America
2. an assessment of Latin America’s strategic importance
3. a review of U.S. policy toward Latin America, including the recent visit by President Bush
4. a review of European policies
5. an analysis of key issues on the near horizon
6. reflections for the future.
1. Overview of Latin America
Five trends characterize contemporary Latin America.
One is a revival of economic growth. From 2000 through 2003, regional growth hovered near zero; over the last three years, Latin America has posted growth rates of 5.9 percent, 4.5 percent, and 5.3 percent. Problems nonetheless remain. First, this spurt came after many years of growing popular disenchantment – disenchantment with the Washington Consensus, with the process of globalization, and with economic linkages to the United States. Second, the turnaround of 2004-05 resulted mainly from growing demand for raw materials and agricultural goods, especially in Asia. It reflects “growth without development.” Third, the levels of growth are still inadequate – to meet its social challenges, Latin America requires growth rates of 6 percent or more. And to make things worse, there is little sign that windfalls from this bonanza are being effectively used to combat longstanding problems of poverty and inequality.
Second, free and fair elections are commonplace. All but two or three countries qualify as political democracies. It has become possible for the “left” to win presidential elections. Ironically, this development has provided democratic leaders with a protective shield against the United States. However strenuously the Bush administration might object to policy stances or public statements, it cannot overthrow a freely elected government without incurring substantial political costs.
Third, distaste for the United States has reached historic levels. Only seven out of 34 nations of Latin America supported the U.S. action in Iraq in 2003. Among these countries, six – Central America plus the Dominican Republic – were involved in FTA negotiations with the United States; the seventh, Colombia, was receiving more than $600 million per year in U.S. military aid. Moreover, Latin Americans have expressed increasing disapproval of American society. Between 2000 and 2004, the pro portion of citizens with “favorable” views of the United States dropped from 73 to 61 percent in Chile, from 72 to 41 percent in Mexico, from 68 to 50 percent in Brazil, and from 53 to 31 percent in Argentina. The “soft power” of the United States has been rapidly eroding.
Fourth, popular frustration has led to populist and/or “leftist” political movements – generically known as the “pink tide.” The trend first appeared in 1998, when Hugo Chávez swept the Venezuelan election with 56 percent of the vote. Denouncing the country’s institutions as “corrupt” instruments of a “rancid oligarchy,” he has asserted increasingly authoritarian control of the nation’s political apparatus. Forging a close alliance with Fidel Castro, Chávez has announced his intention to create “socialism for the twenty-first century.” The tide gained strength as elections resulted in victories for Luiz Inácio Lula da Silva (“Lula”) in Brazil (2002, 2006), Néstor Kirchner in Argentina (2003), Evo Morales in Bolivia (2005), and Daniel Ortega in Nicaragua and Rafael Correa in Ecuador (2006) – Near-misses occurred in Peru and Mexico. Tabaré Vázquez of Uruguay was at first thought to belong to the tide, but he swerved toward the political center midway through his term.
Fifth, Latin American leaders of all stripes – left, right, center – have sought closer relationships with extra-hemispheric powers. In part this strategy represents a pragmatic response to geoeconomic realities of globalization, a quest for new markets and sources of investment. (Chile, for example, has negotiated an FTA with China.) And for some, it has been an ideologically inspired effort to offset the geopolitical dominance of the United States (thus Venezuela has been courting Iran, Russia, and non-aligned nations throughout the developing world.) Either way, this situation presents opportunities to international powers outside the Western Hemisphere.
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