The Magazine

Trouble Down Below

What's wrong with Latin America.

May 19, 2008, Vol. 13, No. 34 • By MARK FALCOFF
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Not surprisingly, Latin America as a whole has lost significant geopolitical weight over the last four decades. A case in point: In 1966, Mexico was richer than Portugal and Brazil was more affluent than South Korea. But in 2002, the income per capita in both Portugal and South Korea was twice that of Mexico and Brazil. In 1950, the average income per head in Latin America was 25 percent of the United States (while in Asia it was 10 percent). But in 2000, Latin America had dropped to 20 percent of its northern neighbor while Asia had risen to a full 25 percent.

No wonder investors have misplaced the region's collective phone number. What's the problem? Many Latin American politicians and their epigones in the American academy blame everything on "neo-liberalism"--that is, the free market reforms enacted in the go-go 1990s. Reid carefully dispenses with this argument, even to the point of defending the much-maligned "Washington Consensus." But he discards cultural and historical explanations, even though he fails to come up with a satisfactory alternative.

The truth is that these are conquest societies, orphans of long-disappeared empires who lack any vision of a national project, or commitment to it (Brazil is a possible exception) or even, in many cases, any clear notion of national identity. Some, like Bolivia, are merely geographical expressions rather than real countries; almost all are afflicted by racial and social divisions and discrimination, exemplified by the fact that educational budgets--as, indeed, most government benefits, including social security and pensions--are tilted towards a small but still sizable "white" or "near-white" minority. Institutions are weak or nonexistent; too many crucial national issues are solved privately or en familia.

While there have been periodic attacks on vested privilege--in Mexico, Peru, Argentina, or Nicaragua, for example--rather than creating new and lasting opportunities for the landless or unemployed, they have usually ended up leaving the entire society poorer or, in the best of cases, simply creating a new class of well-connected generals and politicians who are entrepreneurs. (This is the fate that undoubtedly awaits Cuba once the Castro brothers have departed.)

It is refreshing, in a book of this sort, to see that the usual rosary of accusations against the United States is missing. Reid notes, for example, that intervention is only one side of American policy; the other is the search for peaceful cooperation. (Actually, he might have said, both at the same time.) But while on some historical issues he is right on the mark--he dismisses charges of U.S. responsibility for the coups in Chile and Brazil--on others he is quite wrong. The CIA did not blow up a Belgian ammunition ship in Havana harbor in 1960, nor was it responsible for the flight of Jean-Paul Aristide from Haiti.

He does, however, more broadly grasp the central paradox of inter-American relations; namely, the on-again off-again Latin complaints against Washington. Whatever is wrong with Latin America is the fault of the United States--either by intervening in matters that don't concern it, or by failing to embrace the region's problems as its own. ("I've got a problem; what are you going to do about it?") The Bush administration stands condemned for failing to give Latin America the priority it imagines it is due; the one that follows will no doubt be taken to task for excessive meddling and lack of "mutual respect." And back again.

In fact, as Reid notes, the only serious revolution of which Latin America seems capable is out-migration. Young people all over the continent dream of leaving, and many do. In 2005, an astounding 22 million Latin Americans worked in the developed world, having arrived there legally or illegally, followed by another 3-5 million who now work in more prosperous neighboring countries, such as Bolivians who emigrate to Chile or Paraguayans to Brazil. In the same year it was estimated that remittances to their home countries amounted to $54 billion, which is to say, more than all the foreign direct investment and foreign aid to the region combined.

The escape valve of emigration is important not merely for poor countries like Bolivia or Ecuador but even in relatively sophisticated societies like Mexico, Colombia, or Costa Rica. At this writing at least one out of every ten Argentines lives in Europe, Canada, or the United States. Not surprisingly, the debates on immigration policy underway in our own presidential campaign are followed with acute apprehension in nearly two dozen countries to the south.