AFTER a decade spent pulling out of an economic nose dive, Latin America is starting to regain altitude. But its engines are still sputtering.
At this week's Summit of the Americas in Miami - the first hemispheric gathering since 1967 - Latin American heads of state will flaunt three years of economic growth, seeking more foreign investment and favorable trade arrangements. Less advertised will be numbers showing the shaky underpinnings of the economic progress.
The source of their pride lies in the region's success in sloughing off a burdensome inflation rate, attracting large foreign-capital inflows, and expanding the regional economy by 3.5 percent in 1993 - despite a worldwide recession and drop in oil prices (a key export in Venezuela, Ecuador, and Colombia).
Countries in the region have also reduced trade barriers, in many cases started rooting out corruption, and embraced democracy, at least officially.
``[Latin American countries] are chaotic and risky, but they're coming along,'' says David Scott Palmer, a Latin American studies professor at Boston University. ``There are indications that this recovery will continue.''
Regional inflation, once a huge drain on national wealth, has plunged from an average of 49 percent in 1991 to 19 percent last year.
Brazil, the region's last inflation-heavy country with a yearly rate of 5,000 percent, has pushed inflation down to single digits in the last few months after tightening its monetary policy and issuing a new currency.
A selling off of state-run enterprises is helping woo foreign investors. Foreign capital rose 41 percent last year, and was six times higher than in 1990, according to the Washington-based Inter-American Development Bank's (IDB) 1994 economic and social report on Latin America.
And the continent is coming together through more intraregional trade. The swell in exports that spurred growth in Latin America was partly a result of stronger trade agreements among countries in the region, such as the South American Common Market, or Mercosur, which links Brazil, Argentina, Uruguay, and Paraguay.
But there are reasons to be wary. The recent steady growth may not be sustainable, says Larry Birns, director of the Council on Hemispheric Affairs in Washington. ``There is a pock-marked road with many snares lying ahead,'' he says.
Investment, an indicator of long-term progress, has risen an average of 7.2 percent annually for the last three years. Yet during 1993, investment rose only 3 percent, a disappointing show compared with the dramatic 9 percent rises in 1991 and '92, the IDB reports.
Savings and investment in proportion to gross domestic product are low. Average investment of major developing countries in East Asia was more than 30 percent of GDP in 1993, compared with only 18.5 percent in Latin America, according to the United Nations' Economic Panorama of Latin America 1994 report.
Another hitch to Latin America's future: Unemployment hovers at around 10 percent. And 1990 United Nations figures showed 39 percent of households living in poverty.
The benefits of growth have been very slow to reach the impoverished, says Isaac Cohen, director of the Washington office of the UN's Economic Commission for Latin America and the Caribbean.
He stresses, though, that the will of governments to make improvements is there. ``The turn toward democracy has made these governments much more responsive to their constituents and made democracy more relevant to the people in poverty,'' Mr. Cohen says.
And proponents of economic restructuring and liberalization reforms argue that prosperity will trickle down once the economic condition of the region as a whole improves further.
``You should not be surprised that three years into a recovery certain sectors of society have been left out,'' Professor Palmer says. ``As the recovery proceeds, you will see ripple effects.''
But unless those ripples start to reach the poor soon, the region's growth may be short-circuited by political unrest. Latin America's poverty gap is the widest in the world, Cohen says.
The Chiapas uprising last year in Mexico is a poignant example of the potential for political turmoil - even in a country with a signed free-trade pact with the United States and Canada in hand - when benefits are perceived as only reaching the upper classes of society.
``It's true that Latin America has regained growth,'' Cohen says. ``But in order for the region to start making a dent against poverty, that growth has to double and you need a deliberate effort to attack poverty.''
Improving tax collection, redistributing land ownership, and shaping up schools should be top priorities for the region, he says. The IDB recommends investing more authority in state governments, rather than in federal institutions.
Palmer emphasizes that growth in Latin America lies in part on the shoulders of private businesses as the region's markets become more open. The degree to which entrepreneurs forgo short-term gain for long-term investment, he says, will determine the path of their nations.
``The jury's still out on that one,'' he says. ``It's too soon to tell.''