Democracy + market economy = progress

Posted on Thu, Jan. 05, 2006

LATIN AMERICA
Democracy + market economy = progress

BY MARIFELI PEREZ-STABLE
marifeli@starpower.net

Bolivia's Evo Morales surprised almost everyone last month by winning a 54 percent landslide in a crowded presidential field. His rags-to-power story dwarfs Luiz Inácio Lula da Silva's in Brazil. Morales is currently on a world tour that started in Cuba and Venezuela, where he applauded the ''axis of good.'' Spain, France, Belgium, South Africa, China and Brazil will also welcome the president-elect.
At last year's Summit of the Americas in Mar del Plata, Argentina, Morales joined Venezuelan President Hugo Chávez in rowdy street demonstrations against the United States, neoliberalism and free trade. Morales' victory and, perhaps, kindred electoral outcomes in Peru, Mexico, Nicaragua and Ecuador could well draw a Latin American profile markedly different from the one hoped for when President Clinton inaugurated the Miami summit in 1994. No wonder Chávez and Cuba's incorrigible comandante are grinning. What is going on in Latin America?
Let's start with the Mar del Plata summit. Though the most unpopular U.S. president ever in the region, President Bush received warm applause when he was introduced at the summit while Chávez was greeted by silence. The Free Trade Area of the Americas may never materialize as first envisioned, yet 28 countries joined the United States in reaffirming their commitment to free trade. Only Venezuela -- of the five that didn't -- has vowed to ''bury'' the FTAA. The Mercosur countries -- Argentina, Brazil, Paraguay and Uruguay -- want concessions on U.S. agricultural subsidies before moving forward.
There is, however, no gainsaying the underlying discontent among Latin Americans. Democracy and the market have not fulfilled the expectations raised in the 1990s. While a majority in the latest Latinobarómetro survey say that they would never support a military coup, more than three-quarters do not believe citizens are given equal treatment before the law. Even if a majority also expects their children to be better off than they are now, a greater proportion has had an unemployed adult in their household in the past 12 months.
Reasons for discontent
Citizens have every right to be discontent. What's problematic is that democratic institutions are consolidated in just a handful of countries; and robust, sustained growth is a reality only in Chile.
Democracy and capitalism have worked well together when the disfranchised have mobilized to secure their rights and their lives have materially improved. The U.S. civil-rights movement and the emergence of an African-American middle class are stellar examples. That synergy, which worked over decades in the United States, is missing in Latin America. Populism -- which has deep roots in the region, mistrusts liberal democracy and exalts the state as an economic actor -- offers but an illusion of an alternative.
Where has a state-led economy matched the successes of today's developed world -- South Korea, Taiwan, Chile, Ireland, Finland or Central Europe? Nowhere. Didn't populist policies in Latin America implode in hyperinflation, runaway debt and plummeting incomes in the 1980s? Most certainly. What, if not markets, could have brought the region back from such straits, which so decimated the poor? Surely, not more of the same.
Discontented though they may be, most Latin Americans do not defy common sense. Solid majorities believe that only democracy and a market economy can bring progress. Responsible elites in the public and private sectors must, therefore, make both work so that citizens gain better living standards and trust in institutions. When discontent turns into rage, populism flourishes.
Go slow with Morales
The Bush administration should breathe deeply often when it starts dealing with President Morales. With us or against us will not get Washington very far in Bolivia or anywhere else in Latin America. Let's not forget that Morales won resoundingly in a democratic election.
We won't know for a while if Morales will govern democratically or if, like Chávez, he will do so as an autocrat. This time next year we might look back in horror. But then again, we might not. Morales may yet surprise us. It is not, moreover, a sure thing that the ''axis of good'' will reap bountiful electoral gains. Patience is, indeed, a virtue, as is standing above the fray.
Marifeli Pérez-Stable is vice president for democratic governance at the Inter-American Dialogue in Washington, D.C.

http://www.miami.com/mld/miamiherald/news/columnists/marifeli_perez_stable/13553447.htm