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The Real Problem Facing Latin America Isn't Instability -- It's Rigidity

June 14, 2005|William Ratliff | William Ratliff is a fellow at Stanford University's Hoover Institution.

After weeks of demonstrations, Bolivian Indians have forced out that country's president, believing that today's interim replacement and his successor will respond to their demands. History suggests that their hopes are likely to be dashed.

Less than two years ago, much the same thing happened to a different Bolivian president. His name, and the name of the man who stepped down last week, hardly even matter because the cycle of unrest will happen again and again in varying forms in Bolivia, and around South America, as it has for centuries until real change occurs.

This time, the world watched men and women blocking traffic, battling police, kneeling in news photographs wearing brightly colored ponchos, hand-woven shawls and bowler hats. But the issues they raise go far beyond the Andean nation. Today, Bolivia's Indians are in Latin America's vanguard.

The Indians' first objective is positive and crucial for the future of Bolivia and nations far beyond it. They are demanding far greater and effective participation for the majority of the people in their country's affairs. The other objective, calling for such policies as resource nationalization, is largely negative, a sort of reflexive anti-globalization that would reduce the chances of improving living conditions for all Bolivians.

Instead of assessing the Indians' objectives and complaints on their merits, however, there is a tendency to simply chalk it up to more instability in Latin America, to remember, say, events in Argentina in 2001-02, when five presidents and acting presidents were shuffled in and out of office in a fortnight amid economic chaos. That feeds the belief that instability is what keeps Latin America in cycles of failure. But instability is not the critical factor in preventing productive reform in Latin America. The critical factor is just the opposite, an excessive stability that is merely shaken up periodically as frustrated citizens try to make their voices heard.

The World Bank and other international organizations have long recognized that most Latin American countries, including Bolivia, have the deepest wealth inequalities of any region on Earth. And the situation has not improved significantly with time. As the late Mexican Nobel laureate Octavio Paz correctly noted, the institutions established centuries ago by the Iberian colonial powers "were built to last and not to change."

Even after independence in the early 19th century, elites retained power, co-opting or eliminating their critics, never really changing the fundamental order: elite power exercised mainly to the benefit of the elites. Regional polls register deep popular frustration with this status quo. The much publicized Central American Free Trade Agreement has drawn criticism because many fear it is a means whereby only the elites would make more money. The trade agreement would be an easier sell if the trade proposals were part of a convincing, broader reform program to give greater opportunities and rights to the bulk of the population.

In the past, popular frustration has broken out in the form of guerrilla uprisings and military coups. Now elections promise change, but elections alone haven't been able to put enough of a dent in the power of the elites.

Luiz Inacio Lula da Silva was elected president of Brazil in 2002 on a platform of change, but his effectiveness has been limited by the scope of inherited problems, including corruption and the realities of vested, elite interests. The same profound frustration led to the choice of a dangerous demagogue, Hugo Chavez, in Venezuela. Peru's current president, an Indian, Alejandro Toledo, has not expanded popular involvement and, almost since his election, has had only one-digit popularity.

Latin America today is rapidly falling far behind such reforming Asian countries as China, South Korea, Taiwan and the Southeast Asian tigers. It will continue to do so until it undertakes deep, long-term reforms that will enable the bulk of the population to participate productively in a challenging, competitive world.

The essential reforms include greatly improved education for all citizens at the primary and secondary levels, more equitable healthcare and legal reforms that will guarantee civil and property rights for all, not just the rich who can afford to hire expensive lawyers or buy off judges. There are capable Latin American reformers who know what needs to be done, but it is very difficult to overcome the tyranny of history and the legacy of colonial culture and institutions.

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