Mexico's New
Democracy Highlights
Latin America's Problems
By JONATHAN POWER
LONDON-- Democracy has finally
arrived in Mexico leaving only Cuba, among all the Latin
American states, out on a distant limb. Yet the substance of
the opposition's victory is less tangible. Can the principal
electoral victor, Cuauhtemoc Cardenas Solorzano, who now
stands a good chance of winning the presidency itself in the
year 2000, deliver to the poor and dispossessed of Mexico,
whose numbers and plight have so dramatically worsened in
recent years, what the demagoguery of electioneering has
seemed to promise?
Indeed this is the question for all
of democratic, free-market, Latin America, bar the
continent's one success story, Chile. Unemployment and the
deep poverty it sustains is every country's bain. "How long
will the people wait for trickle-down to trickle down?" as
Newsweek's David Schrieberg tellingly asked
recently.
Even in the best of times Latin
America has never been good at dealing with its poor. It is
the continent that is the sharpest and most distinct
antithesis of east Asia. Its Spanish and Portuguese,
medieval, Catholic-inspired, feudalism and mercantilism runs
deep. Land reform and peasant rural development have always
been sideshows--and even when, following the revolution in
Mexico, there was some significant effort to give land to
the peasantry the resources and expertise to realize the
small farmers' immense potential was never forthcoming. In
Japan, South Korea and Taiwan large-scale land reform,
shortly after the end of World War 2, was the defining
moment when the genie of economic development was
effectively uncorked.
In more recent times--the 1970s--no
other continent so indulged itself at the trough of cheap
credit. And no other continent was taken for such a ride by
young, inexperienced, western, commercial bankers who
thought they could earn points from their superiors by
massively recycling petrodollars to such solicitous
customers, knowing (or unknowing?) that if there ever would
be a day of accounting they would probably have long moved
on and over from the responsibility for it.
The bubble burst in the early
1980s. The West's serious recession, combined with steadily
rising interest rates, broke the back of most of Latin
America. It was the "lost decade" par excellence. The middle
classes suffered but the poor were crucified. Unemployment
went through the roof and with it crime.
Yet, even in the midst of crisis,
there was one very important benign development. Partly it
was driven by economic forces and partly by the campaign
waged by U.S. president Jimmy Carter. The traditional
military regimes and chaotic civilian administrations were
finally discredited. In their place there were democrats,
promising economic renewal, a chapter now completed with
Sunday's election in Mexico.
Beholden to the "Washington
consensus" they concentrated their reforms on unshackling
trade from its mercantilist chains and creating sound money,
attaining lift-off by attracting vast quantities of
"emerging market funds," but, mistakenly, with little regard
for rising unemployment and worsening income
distribution.
It was in Mexico that the dikes
burst. In December, 1994, the currency crashed. It wasn't
the foreign investors who pulled the plug on the peso. It
was Mexico's own businessmen, anticipating political and
economic disturbance, precipitated by the peasant uprising
in Mexico's southern province, Chiapas and the assassination
of the front-running presidential candidate.
To be fair, much has been achieved
by financial rigor. Right across Latin America, inflation is
now down from the stratosphere. Foreign investment is on the
up and up. Privatization is well underway and democracy
continues to be well accepted. Nevertheless, the chance of
business confidence being rudely shattered, as it was in
Mexico two and a half years ago, remains a real one. The
rising tide doesn't lift all boats.
As Mr. Cardenas said during his
campaign, governments have to focus not just on improving
their country's macro-economics but on job creation and
education. Growth alone will not be enough. The Chilean
example of special high schools built in poor neighborhoods
in an attempt to reach talented but impoverished students is
one pointer to the direction needed.
As yet there are no significant
barbarians at the gate. Nor hoards of dispossessed about to
burn down the presidential palace. Even in Peru, still
picking up the pieces after the guerrilla take-over of the
Japanese embassy, the government has never felt itself
seriously threatened. But universally, there is that most
dangerous of all phenomenon, the revolution of rising
expectations. If the democrats cannot now deliver, then cry
for Latin America. Fortunately, with politicians like Mr.
Cardenas now coming on to the scene--President Cardoza in
Brazil is another--there are signs that the electorate may
be, nearly too late, wise enough to vote to avoid
disaster.
July 9, 1997,
LONDON
Copyright © 1997 By JONATHAN POWER
Note: I can be reached by phone +44 385 351172
and e-mail: JonatPower@aol.com
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