Bush heads south to a troubled continent

President, on first trip to South America, will push free trade, democratic reforms.

If George Bush's idea of presidential travel were to hit the trouble spots, he'd be using his first trip to South America this weekend to visit Colombia, Venezuela, and Argentina.

On his first official visit to South America, the president will be stopping in Mexico, Peru, and El Salvador, three countries with positive prospects. However, as the deadly bombing Wednesday in Peru shows, it's a region with a shrinking pool of positives to draw from.

Although the region hasn't had the same priority that Wasington promised prior to Sept. 11, President Bush's trip is meant to encourage Latin America to stick to free-trade reforms and with the tough transition to democracy.

There are no head-of-the-class leaders to crow about, but at least Mexico is showing signs of moving forward under NAFTA.

Peru – though shaken by Wednesday's bomb that conjured up fears of a revival of Marxist-guerrilla terrorism – last year elected a president freely and fairly after years of "authoritarian democracy" under former President Alberto Fujimori. And El Salvador is celebrating a decade free of civil war.

That's better than Colombia – where substantial US military aid may soon be freed up to hit ever-stronger insurgent groups. Also in dire straits is Venezuela, whose economy continues to sink under the weight of building antagonisms between lefty-populist President Hugo Chavez and a furious middle class. Argentina, too, is struggling to rebuild a shattered financial system and moribund economy under new President Eduardo Duhalde (who wasn't elected by popular vote).

In short, Latin America is in trouble. The suspected terrorist bombing in Lima, Peru – where Bush will spend Saturday with Peruvian President Alejandro Toledo and then the presidents of other Andean countries, discussing trade and drug trafficking – served as a reminder of just how fragile is the progress in the US's southern neighborhood.

Important trading partners

Noting recently that Latin America is the fastest-growing US export market, Assistant Secretary of State for Western Hemisphere Affairs, Otto Reich, added, "ours is also a troubled region ... experiencing the consequences of poor governance and incomplete reforms."

Despite the Bush trip, it is clear that, in the post 9/11-world ,the region won't be the focus for Washington that it was once supposed to be.

"This is an attempt to show the US recognizes expectations were raised and is not going to let events force it to forget southern neighbors," says Michael Shifter, analyst at the Inter-American Dialogue in Washington. "But the reality is that, with the war on terrorism and the Middle East, this is not going to boost Latin America to the top of the agenda."

Challenges to reform

Most troubling to the US are the signs across the region of reform fatigue.

A decade ago, Latin America threw off the deep ideological divisions – the swings from populism to military governments and back – and state-run economies that divided and limited it. The US cheered the change.

But today, Latin popula- tions are feeling growing frustrations with the way the tough political and economic reforms have worked out. Poverty and unemployment remain high, while democratically elected governments demonstrate little ability to reduce corruption and inefficiencies to improve people's lives.

As Mr. Reich says, this is "a region in which many citizens and some leaders are beginning to question the wisdom of the political and economic reforms on which they have embarked."

Bush wants to use his trip to say that sticking to reforms and free-market economies, rather than backsliding, can raise the region's boats. That's one reason he's singled out El Salvador, observers say. It's now a stable country that is trying new ideas, such as dollarization of the currency and regional economic integration, to get ahead.

New free-trade zone

While in El Salvador, Bush will meet with neighboring presidents to discuss his plan for a free-trade area between the US and Central America.

But that kind of proposal, some experts worry, could create a split hemisphere, where the US favors those countries economically and politically prepared to hop aboard the free-trade train.

"US policy risks creating a two-tiered Americas," says Eduardo Gamarra, director of the Latin American and Caribbean Center at Florida International University in Miami. "One will have special arrangements with the US, and the rest of the region will struggle through."

Tough-love policy

An example of how that policy will play out is the "tough love" approach the US is employing toward an Argentina in crisis.

"The US is saying to its southern neighbors: 'No more bail-outs,' " says Mr. Gamarra. You have hard economic decisions to make before there's help, he adds. Leaders of the hemisphere's 34 democracies have agreed to pursue a Free Trade Area of the Americas by 2005. But Mr. Gamarra says that goal could be postponed, with the US focusing on relations with Mexico and pursuing other bilateral or regional trade accords in the interim.

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