A year of storm and shine for Latin America

By

1998 was an intense and difficult year for Latin America.

It was a year of paradox as well. The two most momentous events - hurricane Mitch and global financial turmoil - illustrated Latin America's vulnerability to external shocks, but also demonstrated the region's growing resilience and capacity for response. Other important events in 1998 - elections in several countries, Pinochet's arrest, the Santiago Summit of the Americas, the pope's visit to Cuba, and Colombia's guerrilla war - also had contradictory dimensions.

Hurricane Mitch was this hemisphere's worst disaster ever. It took 18,000 lives, left millions homeless, and destroyed $5 billion of property. Compounding the damage was the lack of warning or preparation, badly located and constructed housing, and widespread environmental devastation - problems that affect every poor nation. However, despite some political squabbles and inefficiencies, the response has been impressive - from the region's fragile democratic governments, Mexico and other Latin American countries, the United States and other industrialized nations, and multinational development agencies. All of them recognize the importance, not merely of reconstruction, but of building a better future for the region. It remains to be seen whether this initial performance is sustained, and whether international support will be available over the longer run.

Recommended: Default

By August, Latin America seemed to have successfully weathered the Asian crisis, but then the Russian economy collapsed, capital fled the region, external credit dried up, and stock markets went into tailspin. Nearly every Latin American economy suffered and growth slowed regionwide. Brazil came under the fiercest attack, because it was the most vulnerable - with a huge budget deficit and growing short-term debt. But the Brazilian government moved quickly. In the midst of campaigning for a second term, President Fernando Henrique Cardoso announced sharp increases in interest rates and future austerity measures. Since the election, Brazil has reached agreement with the IMF and obtained international loans of $41 billion to bolster its reserves.

The fact that no Latin American country has suffered the economic meltdown that devastated Russia and many Asian countries reflects the improved quality of the region's economic institutions and policy management. Still, with the government facing strong domestic opposition to its financial program and considerable international skepticism about its chances for success, the Brazilian economy remains turbulent and vulnerable.

Dramatic and historic, the pope's visit to Cuba offered hope of change to a distressed Cuban population tired of want and repression. A year later, few Cuban lives have been altered. But change has occurred among Cuban-Americans, spurred not only by the pope's travel, but also by the death of the powerful anti-Castro leader Jorge Mas Canosa. US policy changes may not be far behind.

In April, the second Summit of the Americas assembled the hemisphere's 34 elected heads of state - and, like its predecessor, showed that the nations of the Americas share a broad range of interests and goals, and that a great deal could be accomplished by working together. Still lacking, however, is an effective strategy for addressing these common opportunities. For example, talks on hemispheric free trade were officially launched, but the real bargaining will be delayed until the US administration secures fast-track authority.

The year was mixed for democracy. The six presidential elections - in Brazil, Ecuador, Colombia, Paraguay, Costa Rica, and Venezuela - went off without a hitch. The Hugo Chavez victory in Venezuela this month caused some distress, since he had previously tried to overthrow a constitutional government and his democratic commitment remains suspect. But his statements following the elections have been reassuring. Concerns have also been raised about the popularity of antidemocratic military leaders in Guatemala, Paraguay, and Bolivia, but no one suggests Latin America is threatened by a return to military rule.

In Argentina, President Carlos Menem declined to pursue the constitutionally questionable course of seeking reelection for a third term; in Peru, however, President Alberto Fujimori seems intent on taking that course. In Mexico, political institutions seem threatened by drugs and corruption, but recent gubernatorial elections and the operation of the opposition-controlled Congress suggest that democracy may be gaining ground. Despite some hopeful signs following the June election of Andres Pastrana, no clear road toward peace has emerged in Colombia. The Pinochet case underscored the dangers that a polarized society poses for democratic politics, and how slow and difficult the process of national healing can be.

One achievement in Latin America this year has no downsides - the settlement of two contentious border disputes. The agreement between Ecuador and Peru ended several years of open warfare in the contested area, and Argentina and Chile resolved their only remaining territorial conflict.

* Peter Hakim is president of the Inter-American Dialogue.

Share this story:

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...