Political Changes In Latin America Likely To Continue

[BayCityProgressive]

http://www.venezuelanalysis.com/articles.php?artno=1995

President Bush has recently returned from a seven day, five country trip to Latin America, with which he had hoped to regain some of the influence that the United States has lost in recent years. The political and economic changes taking place in the region are often seen as a cyclical or temporary phenomenon - a swing to the left, or to populist or "anti-American" governments, that will in time reverse itself. The conventional wisdom is that populist governments that stray too far from the "Washington Consensus" will be unable to achieve sustainable growth and development. They will run into high inflation through irresponsible fiscal and monetary policies, or will stifle investment - particularly foreign investment - and therefore productivity growth. According to this view, they will inevitably revert to the set of orthodox economic policy reforms that have been introduced over the last 25 years.

This conventional wisdom is wrong. First, it misses the most important reason for the region's leftward shift: an unprecedented long-term economic growth failure. The prevailing view is that the reforms of the last 25 years - tighter fiscal and monetary policies, more independent central banks, indiscriminate opening to international trade and investment, privatization of public enterprises, and the abandonment of economic development strategies and industrial policies - has been successful in promoting growth. The problem, according to this view, is that many of the poor have been left behind, and inequality has worsened.

In fact, what has happened is that economic growth collapsed. From 1960-1980, the region's per capita GDP grew by 82 percent. This was not extraordinary by developing country standards - during this period South Korea grew twice as fast and Taiwan nearly three times as fast. But it was enough to raise living standards considerably for the majority of Latin Americans. From 1980-2000, per capita GDP grew by only 9 percent. From 2000-2005 it has grown by 4 percent. To find anything comparable to the long-term growth performance of the last 25 years, one has to go back more than a century.


Looks like the US can look forward to a socialist/social democratic South American Union for decades to come! The ruling elite cannot be pleased!

[Toots]

1. Between 1980 and 2000 there was only one Democratic President and I would

venture a guess that most of that nine percent growth happened during his term. Between 1960 and 1980 there were three Democrats and only two Republicans. If one were so inclined I am fairly certain they could find patterns like this throughout our history where it concerns economics. How Republicans ever got the reputation for good economic policies is beyond me. Since the Depression every single Republican President has had a recession during their term but only one Democrat has..