LATIN LETTERS
March, 2003.
TRACKING THE STORM
In my article Land of Sorrow (Issue
132) I referred to the political posturing of Hugo Chávez, the President of
Venezuela. Trying to predict where events in
that country will lead is akin to establishing with certainty the course of a hurricane
and, as I wrote in another publication recently, the fate of Chávez has become a toss of
the political dice. Venezuela escaped the
nightmare of one Hurricane Hugo but this time it has not been so lucky. Chávez, complain critics, has employed tactics
which bring to mind Robert Mugabe in Zimbabwe (whose antics have made the Dark Continent a
little darker) by recently telling his military commanders to ignore any rulings by judges
that conflict with his own decrees. The army
has already been ordered to commandeer privately-owned ships, trucks and aircraft in a
desperate bid to distribute fuel and food. The
stakes were raised, however, and a disturbing precedent set when national guardsmen raided
a foreign-owned bottling plant and distributed Coca Cola to thirsty crowds. We were once told that things went better with
Coke, but its barrels of oil not bottles of
Coca Cola that will help things go better for Venezuela.
It is fair to say that for most of its
history, Latin America has been on the periphery of world affairs and it is only when a
crisis of some magnitude happens that the world sits up and takes note. Unfortunately, the present uncertainty which has
spread across Latin America has indeed increased the nervousness of overseas investors
and, at the same time, decreased the inflows of foreign capital. Reluctant investors and week capital inflows rob
the continent of the stimulus needed to bring it back to partial, if not complete,
financial health. The World Bank expects the
region’s GDP to have declined by 1.1 per cent in 2002, which would be worse than
anything experienced in some 20 years. This
anaemic economic state of affairs has seen income decline steadily since 1998. In fact, poverty has increased to such an extent
that the UN Economic Commission for Latin America and the Caribbean estimates that about
44 per cent of Latin Americans are poor. It
is little wonder that political unrest has increased.
But there are some good signs despite
what many observers see as a perpetual uphill struggle, bringing to mind Sisyphus, the
figure in Greek mythology who was condemned for eternity to push a boulder up a hill and
then watch it roll back down again. Mexico,
for example, has been able to remain financially stable (even though much of that
stability depends on economic conditions in the United States) and Chile also has moved
forward with bilateral trade deals with the European Union and the United States. Significantly, even with the crisis in Argentina
and the months of uncertainty that preceded the election of a new president in Brazil,
coupled with turmoil in Venezuela and Colombia’s continuing civil warfare, there is
no sign of rifles replacing ballot papers in Latin America; democracy is growing and
strengthening with even former leftist extremists recognising the importance of market
forces and fiscal responsibility.
It is difficult to know what 2003 will
bring for Latin America, but it is a fair bet that events in Brazil, Mexico and Argentina
will shape the continent’s economic landscape this year. Those 3 countries will determine whether modest
growth (anticipated by some analysts at 2 per cent) can be achieved and if poverty can, at
least, be arrested. Luis Inacio Lula da
Silva, the new Brazilian president, has taken reassuring steps to encourage international
investors; it is encouraging to note, for example, that the premium on Brazil’s bonds
has fallen (even though it is still at a level which makes the public debt acute). In Mexico, where just over 20 years ago the
country’s debt default helped coin the phrase “lost decade”, there are legislative elections in July and, if
his party is successful, Vicente Fox will be able to implement his economic liberalisation
plan, making memories of the default even more distant.
Fox has also forcefully highlighted two issues which have made some
congressmen very uncomfortable: ability and
self-interest. Further south, no one knows
what is in store for Argentina’s population of 37 million and the world’s 8th
largest country. The presidential elections
which are due in April promise to be tempestuous with some candidates already speaking of
assassination plots against them and the leading opposition candidate, Elisa Carrio,
promising a crusade against the “mafias” running Argentina. A mélange of intrigue, hearsay and misinformation
has been thrust upon an already financially-bruised and confused electorate whose main
concern remains economic survival.
March brings carnival to Panama (an
event the country has celebrated since 1906) and, much like Latin politics, there will be
plenty of song and dance with streets given up to music and celebration during the festive
days before Lent. Venezuela celebrates
carnival also and perhaps any riotous behaviour will only be of the kind associated with
revelry. But whether March will see more
truncheons than trumpets in Caracas will be anybody’s guess. Trying to determine a hurricane’s next
landfall comes to mind.