There has never been a more hopeful time for Latin America as a whole to increase the standard of living, economic security and opportunity for the citizens of the Western Hemisphere. At the same time, our neighbors face perilous challenges from within that threaten to macerate the economies of certain Latin American Countries as well as jeopardize the fragile democracies that are in many places just now taking hold.
So what is this multi-headed hydra that threatens The Americas?
Failed Keynesian politically expedient economic policies, or "We'll spend our way out of debt!"...Example, The Dominican Republic has approved US$4.164 Billion in new debt since August 2000 with another US$800 Million being considered (Diario Libre, 31 July) This while the Dominican GDP is slightly more than $20 Billion (Interamerican Development Bank 2000 numbers) The entire government budget for 2002 approaches US$3.5 Billion (Budget Director Luis Ernesto Perez Cuevas as quoted in El Siglo) So the Dominican Government in the past 2 years has approved more debt than the entire government's annual budget. The bloated government payroll in the past 2 years has swelled 42,000 employees, at an additional cost of approx. US$229 million a year to taxpayers. Central Bank statistics show at the end of 2000 there were 360,865 public employees in this country of less than 9 million. Compare this with only 766,400 public sector employees in Canada, a country of 31 Million (source: Statistics Canada)
Nepotism... Example: On November 1, 2000 Miami based Noticias Univision presented outgoing Nicaraguan President Arnoldo Aleman with a researched list of 31 family members appointed to government posts within the presidential administration, including Aleman?s wife. ?I don?t know those people.? Was his reply.
Corruption...Example: Rogelio Montemayor, former director of Mexican oil monopoly PEMEX (Petroleos Mexico) surrendered to the authorities in the U.S. (Where he had been hiding) to face Mexican governmental charges of funneling over $115 Million dollars from PEMEX through the oil worker?s union into his party, the PRI (Partido Revolucionario Institucion?l) in a desperate and unsuccessful attempt to continue their 71 years in power. Though this is perhaps the most high-profile case, it is common knowledge that this Mexican system of official corruption, or ?Dedazo? is an endemic that places a significant drag on Mexico?s growth.
Bumbling U.S. Foreign Policy...Example: The failure of U.S. Intelligence to know exactly what was going on during the Venezuelan attempted coup d'etat caused our government to essentially put their foot in their mouth by responding prematurely, thus giving Chavez the opportunity to play the imperialist bogeyman card upon his return to authority. As reported in the WSJ, U.S. Ambassador Manuel Rocha gave Bolivian leftist presidential candidate Evo Morales the boost he needed simply by denouncing him publicly. Seen as the U.S. inappropriately meddling in Bolivian Affairs, Morales gained a sympathy vote from many voters who are more offended by U.S. interventionism than by discredited leftist ideologies. In a historic sense, U.S. support of Pinochet, Somoza, Trujillo, Batista, Noriega and friends while turning a blind eye towards their evil excesses has cost quite a few Latin American lives and there are many people who still harbor resentment over this. More importantly, we have gotten ourselves into some messes over this previous policy; Panam? and Cuba come to mind. Castro for example, could have easily been avoided by a more proactive foreign policy in Cuba that supported not Batista, but Capitalism, liberty and democracy. Batista was an enemy of these and so is his successor, Fidel Castro.
Immobility of wealth and barriers to capitalism...Example: In Ohio, one can generally incorporate a business with the state and purchase a vendor?s license with the county, all in the same day, for less than a day?s wages and without the assistance of an attorney. Hernando De Soto in his book ?The Mystery of Capitalism? documents the process of opening a small sewing shop in Peru (2 sewing machines) as taking 289 days to secure the permits needed, and US$1,231 in registration costs, 31X the monthly Peruvian minimum wage. DeSoto speaks of the low percentage of Latin Americans actually holding valid legal title to the homes they own, preventing them from collateralizing this asset to secure local financing to start a small business. Why don?t they have titles? In the same text, De Soto documents the 4,112 days and the 111 steps it takes a Haitian to legalize the plot of land they wish to live on. The lack of effective property registrars not only makes it difficult for families to extract wealth from their property (through borrowing or selling) but also discourages foreign investors, afraid of potential future claims against any real property investments. These problems do far more to oppress the Latin American populace than any ?evil bogeyman corporate oligarchy? imagined up by the looney antiglobalist crowd.
Racism...There is an elephant in the room, everyone notices it, but dare not acknowledge it. Not the imperialist racism of 19th century colonial powers, and not the hateful bigotry of the Nazi?s, white supremacists or the JimCrow South. Something more akin to India?s Caste system, though along color lines. Example? Brazil, with more blacks than the USA or even most countries in Africa is overwhelmingly though unofficially segregated along racial lines, and as the USA 30 years ago, one?s best hope of success is only through athletics and entertainment. For the indigenous, the opportunities are equally rare. Skeptical? Turn on a Mexican soap opera. All of the actors except the maids will appear Scandinavian. Of course, there are many fair complexioned Mexicans, (perhaps 10% of the population) but anyone who has been to Mexico ? or California for that matter, will realize that 9 out of 10 Latin Americans have zero chance of making it onto any televised entertainment program in most Latin American markets except to play a farmer or a servant. The effect of this is to create a negative cultural self-image, with the Latin American media equating white skin with success and tanned skin with servitude. Ironically, the US wrestled with this same issue in the 1960?s and 1970?s. In this one respect the USA is actually ahead of Latin America in racial progress. Overall Latin America has not even begun to broach the issue. To make matters worse, American companies Univision and Telemundo are some of the biggest culprits in perpetrating this travesty, and even the shows produced in the USA are equally guilty, with the single ?token indio,? ?token mestizo,? or ?token negro? added to the ensemble cast for the sake of political correctness. In most Latin American countries Mercury Chlorate is sold over the counters in skin cream to women who use it to bleach their skin, poisoning themselves in the process.
In Latin America where over 90% of the population is either of mixed or ?indian? (indigenous) descent, almost all of the political and industrial leaders elected or otherwise, have come from a minority elite group of direct descendants from colonial Spain or in the case of Brazil, Portugal. The practical effect of this is that the intellectual ideas and contributions of the majority of the population are not allowed to flourish or develop. Many of the best and brightest are never given the opportunity to develop their skills or to participate in their economies beyond a subsistence or local level. Not only do the individuals who never obtain the opportunities suffer, but the countries suffer as the pool of intellectual contributors is minimized, the economies suffer as large portions of the populace are unable to create wealth (and become consumers), and the cultures suffer, as the question: ?What does it mean to be a Nicarauguan? A Panamanian? A Venezuelan? A Peruvian?? Remains difficult to answer as long as those definitions often exclude the majorities of those countries? populations.
These are some, though not all of the issues that the governments and the economies of The Americas must engage and defeat if we as a hemisphere are going to maximize our human potential and continue along our peaceful trajectory towards cooperation and positive economic integration, which will be necessary to compete in the 21st century with Europe and Asia. The defeat of this many-headed monster will not be an event but a process, but it is one worthy of engaging, for the good of democracy, capitalism and humanity.
Mr. Loren Moss
The Global Commerce Consortium
?2002 Loren Moss
So what is this multi-headed hydra that threatens The Americas?
Failed Keynesian politically expedient economic policies, or "We'll spend our way out of debt!"...Example, The Dominican Republic has approved US$4.164 Billion in new debt since August 2000 with another US$800 Million being considered (Diario Libre, 31 July) This while the Dominican GDP is slightly more than $20 Billion (Interamerican Development Bank 2000 numbers) The entire government budget for 2002 approaches US$3.5 Billion (Budget Director Luis Ernesto Perez Cuevas as quoted in El Siglo) So the Dominican Government in the past 2 years has approved more debt than the entire government's annual budget. The bloated government payroll in the past 2 years has swelled 42,000 employees, at an additional cost of approx. US$229 million a year to taxpayers. Central Bank statistics show at the end of 2000 there were 360,865 public employees in this country of less than 9 million. Compare this with only 766,400 public sector employees in Canada, a country of 31 Million (source: Statistics Canada)
Nepotism... Example: On November 1, 2000 Miami based Noticias Univision presented outgoing Nicaraguan President Arnoldo Aleman with a researched list of 31 family members appointed to government posts within the presidential administration, including Aleman?s wife. ?I don?t know those people.? Was his reply.
Corruption...Example: Rogelio Montemayor, former director of Mexican oil monopoly PEMEX (Petroleos Mexico) surrendered to the authorities in the U.S. (Where he had been hiding) to face Mexican governmental charges of funneling over $115 Million dollars from PEMEX through the oil worker?s union into his party, the PRI (Partido Revolucionario Institucion?l) in a desperate and unsuccessful attempt to continue their 71 years in power. Though this is perhaps the most high-profile case, it is common knowledge that this Mexican system of official corruption, or ?Dedazo? is an endemic that places a significant drag on Mexico?s growth.
Bumbling U.S. Foreign Policy...Example: The failure of U.S. Intelligence to know exactly what was going on during the Venezuelan attempted coup d'etat caused our government to essentially put their foot in their mouth by responding prematurely, thus giving Chavez the opportunity to play the imperialist bogeyman card upon his return to authority. As reported in the WSJ, U.S. Ambassador Manuel Rocha gave Bolivian leftist presidential candidate Evo Morales the boost he needed simply by denouncing him publicly. Seen as the U.S. inappropriately meddling in Bolivian Affairs, Morales gained a sympathy vote from many voters who are more offended by U.S. interventionism than by discredited leftist ideologies. In a historic sense, U.S. support of Pinochet, Somoza, Trujillo, Batista, Noriega and friends while turning a blind eye towards their evil excesses has cost quite a few Latin American lives and there are many people who still harbor resentment over this. More importantly, we have gotten ourselves into some messes over this previous policy; Panam? and Cuba come to mind. Castro for example, could have easily been avoided by a more proactive foreign policy in Cuba that supported not Batista, but Capitalism, liberty and democracy. Batista was an enemy of these and so is his successor, Fidel Castro.
Immobility of wealth and barriers to capitalism...Example: In Ohio, one can generally incorporate a business with the state and purchase a vendor?s license with the county, all in the same day, for less than a day?s wages and without the assistance of an attorney. Hernando De Soto in his book ?The Mystery of Capitalism? documents the process of opening a small sewing shop in Peru (2 sewing machines) as taking 289 days to secure the permits needed, and US$1,231 in registration costs, 31X the monthly Peruvian minimum wage. DeSoto speaks of the low percentage of Latin Americans actually holding valid legal title to the homes they own, preventing them from collateralizing this asset to secure local financing to start a small business. Why don?t they have titles? In the same text, De Soto documents the 4,112 days and the 111 steps it takes a Haitian to legalize the plot of land they wish to live on. The lack of effective property registrars not only makes it difficult for families to extract wealth from their property (through borrowing or selling) but also discourages foreign investors, afraid of potential future claims against any real property investments. These problems do far more to oppress the Latin American populace than any ?evil bogeyman corporate oligarchy? imagined up by the looney antiglobalist crowd.
Racism...There is an elephant in the room, everyone notices it, but dare not acknowledge it. Not the imperialist racism of 19th century colonial powers, and not the hateful bigotry of the Nazi?s, white supremacists or the JimCrow South. Something more akin to India?s Caste system, though along color lines. Example? Brazil, with more blacks than the USA or even most countries in Africa is overwhelmingly though unofficially segregated along racial lines, and as the USA 30 years ago, one?s best hope of success is only through athletics and entertainment. For the indigenous, the opportunities are equally rare. Skeptical? Turn on a Mexican soap opera. All of the actors except the maids will appear Scandinavian. Of course, there are many fair complexioned Mexicans, (perhaps 10% of the population) but anyone who has been to Mexico ? or California for that matter, will realize that 9 out of 10 Latin Americans have zero chance of making it onto any televised entertainment program in most Latin American markets except to play a farmer or a servant. The effect of this is to create a negative cultural self-image, with the Latin American media equating white skin with success and tanned skin with servitude. Ironically, the US wrestled with this same issue in the 1960?s and 1970?s. In this one respect the USA is actually ahead of Latin America in racial progress. Overall Latin America has not even begun to broach the issue. To make matters worse, American companies Univision and Telemundo are some of the biggest culprits in perpetrating this travesty, and even the shows produced in the USA are equally guilty, with the single ?token indio,? ?token mestizo,? or ?token negro? added to the ensemble cast for the sake of political correctness. In most Latin American countries Mercury Chlorate is sold over the counters in skin cream to women who use it to bleach their skin, poisoning themselves in the process.
In Latin America where over 90% of the population is either of mixed or ?indian? (indigenous) descent, almost all of the political and industrial leaders elected or otherwise, have come from a minority elite group of direct descendants from colonial Spain or in the case of Brazil, Portugal. The practical effect of this is that the intellectual ideas and contributions of the majority of the population are not allowed to flourish or develop. Many of the best and brightest are never given the opportunity to develop their skills or to participate in their economies beyond a subsistence or local level. Not only do the individuals who never obtain the opportunities suffer, but the countries suffer as the pool of intellectual contributors is minimized, the economies suffer as large portions of the populace are unable to create wealth (and become consumers), and the cultures suffer, as the question: ?What does it mean to be a Nicarauguan? A Panamanian? A Venezuelan? A Peruvian?? Remains difficult to answer as long as those definitions often exclude the majorities of those countries? populations.
These are some, though not all of the issues that the governments and the economies of The Americas must engage and defeat if we as a hemisphere are going to maximize our human potential and continue along our peaceful trajectory towards cooperation and positive economic integration, which will be necessary to compete in the 21st century with Europe and Asia. The defeat of this many-headed monster will not be an event but a process, but it is one worthy of engaging, for the good of democracy, capitalism and humanity.
Mr. Loren Moss
The Global Commerce Consortium
?2002 Loren Moss