English for Diplomacy: What are the main challenges facing Latin America?

Latin America is the region of the Americas (South America, Central America, Mexico and parts of the Caribbean) where Romance languages (i.e. those derived from Latin) –mainly Spanish and Portuguese (but also French) – are primarily spoken. As of 2015, its population was estimated at 626 million and its combined GDP in 2015 at 5.57 trillion United States dollars (7.53 trillion at PPP) and its GDP growth rate was 6% in 2010, 4.5% in 2011, 3.0% in 2012, 2.6% in 2013, 1.3% for 2014, -0.5% for 2015 and an estmated -1.1% in 2016. However, it is expected to grow by 1.8% in 2017. Since the end of the Cold War much of Latin America has undergone a process of real democratization. This is certainly true at the at the formal level with the introduction and application of a democratic constitution that aims to guarantees a functioning multi-party state, a free press and respect for the individual and minorities. At the practical level the process of democratization is still ongoing, as it is in many parts of the world, and there remains much to be done. For the UN human rights now include social and economic rights and these are the most obvious challenges facing Latin America – widespread poverty, enormous disparities of wealth, income and land ownership, homelessness as well as discrimination and the need to improve the health and education systems. However, though there does seem to be a growing awareness among both politicians and citizens of these problems and a genuine desire to deal with them, corruption scandals at the highest levels in several countries have meant weakend governance (see Wikipedia on Michel Temer, Acting President of Brazil after the impeachment and removal from office of Dilma Rousseff, President Enrique Pena Nieto of Mexico, Mauricio Macri of Argentina, elected in Nov. 2015, Michelle Bachelet of Chile, Evo Morales of Bolivia, Tabaré Ramón Vázquez Rosas of Uruguay, whose second term began in March 2015 and Nicolàs Maduro of Venezuela, for their very different approaches and for comment and criticism of their policies and administrations and their countries’ previous administrations, e.g. the indictment of former Argentinian President, Cristina Kirchner in a corruption case involving public works, and the impeachment of former Brazilian President Rousseff on corruption charges involving her, members of her administration and former President Lula da Silva. Various Brazilian politicians also seem to be involved in the revelations emerging from the Panama Papers scandal (after the leak of a vast quantity of confidential documents from the Mossack Fonseca legal firm in Panama). President Macri of Argentina may also be affected.

https://www.theguardian.com/world/2016/dec/27/cristina-fernandez-de-kirchner-indicted-corruption-argentina

http://www.ibtimes.com/panama-papers-brazilians-embroiled-petrobras-corruption-scandal-also-linked-mossack-2348113 http://www.forbes.com/sites/kellyphillipserb/2016/04/04/what-are-the-panama-papers/#5181ed47508e https://panamapapers.icij.org/20160403-panama-papers-global-overview.html http://www.theguardian.com/news/live/2016/apr/04/panama-papers-global-reaction-to-huge-leak-of-offshore-tax-files-live

http://www.worldbank.org/en/region/lac/overview

Until the end of the Cold War, Latin America was often characterized by military dictatorships, one-party states and economic crises. The United States was reluctantly prepared to support such dictatorships (e.g. in Chile and Argentina) to avoid the spread of Communism through the region. Critics of the US claimed that US policy was mainly designed to protect the interests of US companies (and Chavez, Maduro and Morales and the Cuban leadership have all claimed or claim that this is still true). However, since the end of the Cold War the US has largely withdrawn from much of Latin America and encouraged and supported the process of democratization. The US has remained actively engaged in the area in a limited number of fields, in its concern about drugs trafficking and about migration towards the US, in its opposition to Cuba until the opening of a normalization process in December 2014, in its disapproval of Hugo Chavez of Venezuela and his successor, and because of its partial dependence on oil and other natural resources from the area (10% of US oil imports came from Mexico and 9% from Venezuela in 2013). http://www.consumerenergyreport.com/research/crude-oil/where-the-us-gets-its-oil-from/ However, this is likely to diminish with falling oil prices and increased availability of shale oil and gas in the US and Canada.
This current period has also been characterized by frequent assertions by Latin America leaders of their right to act independently of the US. So it seems that Latin America’s future is now largely in its own hands, although China is a growing presence in the area as an importer of raw materials and an investor.http://www.huffingtonpost.com/rafael-salazar/chinese-investment-in-lat_b_7621160.html

Moreover, some parts of Latin America saw very significant economic growth over the first decade of the century with a boom in commodity prices and large-scale foreign direct investment in a global economy driven by China’s expansion. Ambitious government programs began to reduce inequality. The middle class expanded to almost a third of the region’s population, according to the World Bank ( It was about 20% in 2005 although higher in Brazil, Chile, Mexico and Uruquay). However, more recently, according to the World Bank and Focus Economics, Latin America has seen a fall in GDP growth rates to much lower levels (see first paragraph) as a result of the global recession, the fall in commodity prices and the decline in oil prices. This recent decline in growth rates varies considerably across the area. For example, Uruguay’s GDP grew by 5.1% in 2013 and 3.5% in 2014, Mexico’s by 1.4% in 2013 and 2.1% in 2014 and Brazil’s by 2.7% in 2013 and just 0.1% in 2014 and is projected to contract by -1.5% in 2015. Chile’s GDP grew by 4.2% in 2013 and 1.9% in 2014. Venezuela’s economy grew by 1.3% in 2013 but , hit by falling oil prices, contracted by -2.3% in 2014, and by -4.5% in the first 9 months of 2015. Inflation has reached 141.5%. After elections in December 2015 President Maduro is faced with an opposition in the National Assembly that has a two-thirds majority. It seems unlikely that Venezuela will be able to afford to continue Hugo Chavez’ policy of social solidarity but unclear what space there is for agreement between President and opposition on what policy to follow. http://www.aljazeera.com/news/2016/01/venezuela-government-declares-economic-emergency-160116054425863.html
Meanwhile Argentina’s GDP grew by 2.9% in 2013 and just 0.5% in 2014 (although some commentators claim it actually contracted). Argentina also faces a high inflation rate, officially 10.8% in Jan 2013 and 16.7% in Aug 2014, although unofficial independent estimates put it much higher at about 25% in 2013 and 30 % in 2014, a situation indicative of unresolved structural problems.http://www.focus-economics.com/regions/latin-america
http://www.tradingeconomics.com/brazil/gdp-growth
So average GDP growth in Latin America was just below 1% in 2015 and although inequality is still declining, it is doing so more slowly. And according to a Latinobarometro poll satisfaction with democracy in terms of performance has fallen to 37% in Latin America, with Brazil at 21% and Mexico at 19%. So amid a recession there is widespread discontent and a real sense of a democratic deficit, a lot of it focused on a culture of bribes, corruption, cronyism and cover-ups e.g. the Petrobas scandal.
Generally, however, economic expansion in the years before the current slowdown led to the emergence of several major Latin American economies, and to Brazil becoming a regional power and an important player at the global level. It also improved the lives of millions and means that the richer countries in Latin America should, in theory, now have more funds to begin to tackle some of their problems, among which improvements in education and productivity may be vital. However, the recent decline in growth rates presents a challenge because the economic situation of ordinary people depends on a combination of factors, economic growth, inflation (10.6% in Dec 2015 in Brazil), interest rates, employment (unemployment is rising in Brazil) and the distribution of wealth. http://www.worldbank.org/en/region/lac
http://www.tradingeconomics.com/country-list/gdp-annual-growth-rate
http://www.worldbank.org/en/news/feature/2014/10/09/educacion-productividad-claves-para-reducir-la-desigualdad-en-tiempos-de-bajo-crecimiento
http://www.focus-economics.com/regions/latin-america
List of current problems. In general these problems are more marked in the poorer countries of Central America, the Caribbean and some parts of South America, while in those countries which have seen a period of sustained growth, like Chile and Uruguay, they are either less serious or at least some progress is finally being made. In the case of Brazil, however, the population is so large (est. 204 million in 2015) that it will probably take a full generation to make any real gains. And in 2013-15 there were large-scale protests in Brazil about corruption, the lack of public services, at a time of heavy investment in hosting the World Cup and Olympics, and the continuing enormous divergence in living standards between rich and poor. Similar protests in Mexico have focused on the state’s inability to deal with organized crime and enforce the rule of law.
a) Poverty (less than $4 a day) and extreme poverty (less than $2.50 a day). Poverty has declined in all countries in the region since the early 1990s, but the fall varies greatly across different parts of the region (with Central America and the Caribbean a long way behind). According to the World Bank and UN the percentage of people living in poverty in Latin America was 42% in 2000 and fell to 25% in 2012. However, in 2014 it stood at 28.1% (167 million people). Within this figure extreme poverty or indigence rose from 11.3% in 2012 to 11.7% in 2013 (69 million people). Forecasts suggest that that figure increased to 12% (71 million people) in 2014. The UN Development Programme argues that one third of Latin Americans risk falling into poverty. So poverty and extreme poverty rates remain the basic challenge for the region. In 2013 Central America and the Caribbean continued to register the highest poverty rates in the region, e.g. Honduras had 59% below the poverty line (including 36.2% in extreme poverty) Nicaragua 50% (20% in extreme poverty). The range of conflicting estimates shows how hard it is to produce accurate estimates and how many people live only just above the poverty threshold and remain at risk. In Mexico estimates range from 37% to 52.3% for those who live in poverty. In Brazil estimates run from 7.4% to 21.4% (!) and with a population of 204 million (2015) this is anyway a large figure in absolute terms. Nevertheless, general economic growth over the last 15 years has resulted in an expanded middle class, higher per capita income and a reduction in inequality Brazil, compared with 25 years, ago has made great progress in reducing extreme poverty. The Bolsa Família social welfare program (which started in 2003), which covers perhaps 55 million Brazilians, has also won praise from conservatives as well as liberals as the program seems to be both cheap and effective, the second most important factor (after GDP growth) in helping to move many Brazilians out of extreme poverty.
See ‘Brazil’s Antipoverty Breakthrough’ by Jonathan Tepperman, Foreign Affairs Jan/Feb 2016 for more details.http://www.ibtimes.co.uk/2015-un-millennium-development-goals-brazil-hits-target-others-failing-poverty-education-1467208In
In Argentina 4.3% to 30% (!!) of the population live in poverty, in Chile 14.5%, in Bolivia 49.6% , in Peru 25.8% and in Venezuela 29.5%. The highest rates of poverty are among the indigenous peasants. Generally, there has been some improvement in living standards in recent years, and there is growing awareness of the problem and growing political determination to address the problem, but there is still a long way to go. The wave of protests against corruption and waste and the demands for change that have affected Brazil since 2013 are driven by poverty and and demonstrate that expectations among the poor are growing. Thus poverty will obviously continue to affect many of the other challenges facing Latin America.http://www.indexmundi.com/brazil/population_below_poverty_line.html
http://www.indexmundi.com/mexico/population_below_poverty_line.html
https://www.cia.gov/library/publications/the-world-factbook/fields/2046.html
http://data.worldbank.org/country/brazil
Problem with the figures, an example:http://www.economist.com/blogs/americasview/2014/04/statistics-argentina
http://en.mercopress.com/2015/06/09/argentina-is-paradise-poverty-below-5-rate-cristina-fernandez-tells-the-world
b) The poverty challenge is worsened by the huge disparities of wealth and income. Latin America is the area of the world with the greatest disparities of wealth. In Brazil the richest 10% hold 75% of the country’s wealth according to a recent survey by the government (while a mere 1% holds 45% of the land according toUSAID). http://usaidlandtenure.net/sites/default/files/country-profiles/full-reports/USAID_Land_Tenure_Brazil_Profile.pdf
c) Lack of social services in many areas, health care, education and pensions. Many of the leaders recently elected have focused, or been forced to focus, more and more on these problems and on programs to promote improved welfare and thus greater social equality and security. However, this lack of an adequate welfare system for the poorest sections of society is partly responsible for the discontent in Brazil which led to widespread protests.
d) Unemployment and exploitation. This is often simply the consequence of poverty and a previous lack of democratic institutions to promote employment and prevent, or at least raise awareness of, exploitation (e.g. trade unions, NGOs and charities).
e) Discrimination against the indigenous peoples (40 million) and their cultures, black or mixed-race Latin Americans (150 million) and women. For example, black or mulatto citizens make up 45% of the population of Brazil, yet seem to have made little progress politically. The indigenous peoples, however, are now becoming better organized, more assertive and starting to play a significant role in politics (e.g. President Evo Morales in Bolivia).
Millions of African slaves were brought to Latin America from the 16th century onward, the majority of whom were sent to the Caribbean region and Brazil. Today, people identified as "Black" are most numerous in Brazil (more than 10 million) and in Haiti (more than 7 million). Among the Hispanic nations and Brazil, Puerto Rico leads this category in relative numbers, with 15% of the population being Afro-Latin American. Significant populations are also found in Cuba, Dominican Republic, Ecuador, Panama, Colombia, and Venezuela. Latin Americans of mixed black and white ancestry, called mulattoes, are far more numerous than blacks. In Brazil for example they represent perhaps 40% of the population, although most white Brazilians also have some mixed race ancestry. Intermixing between Europeans and Native Americans began early in the colonial period and was extensive. The resulting people, known as mestizos, make up the majority of the population in half of the countries of Latin America. Additionally, mestizos compose large minorities in nearly all the other mainland countries. Mulattoes are people of mixed European and African ancestry. In Latin America, mulattoes descend primarily from Spanish or Portuguese settlers on one side, and African on the other. Brazil is home to Latin America's largest mulatto population. Mulattoes are a population majority in the Dominican Republic and, depending on the source, Cuba as well. Mulattoes are also numerous in Venezuela, Panama, Peru, Colombia, Puerto Rico, and Ecuador. Smaller populations of mulattoes are found in other Latin American countries.
The position and treatment of women also remains a challenge in many Latin American countries. See the work of charities like Action Aid in dealing with the problems of female education and the physical abuse of women.http://www.huffingtonpost.com/2014/01/23/gender-inequality-latin-america_n_4653710.html
http://www.who.int/violence_injury_prevention/media/news/2013/17_01/en/
http://csis.org/publication/latin-america-women-still-confront-violence
f) Disparities in land ownership, migration to cities and homelessness. In Brazil half the nation’s arable land is controlled by a small number of families. 3.5% of the landowners hold 56% of the land, while 40% of the poor landowners together hold less than 1%. However, Brazil’s land reform program has settled nearly one million families on small farms in the last 25 years and this process has accelerated in recent years. Meanwhile many poor, rural people drift from the countryside to the big cities in search of jobs that they rarely find.
g) Too much bureaucracy and corruption. A legacy of the past, these present real challenges for reform-minded leaders as serious change will inevitably lead to conflict with entrenched interests.http://www.theguardian.com/world/2014/jun/29/argentina-vice-president-amado-boudou-cristina-fernandez-de-kirchner
http://www.theguardian.com/world/2015/feb/13/argentina-president-formally-charged-alberto-nisman
http://edition.cnn.com/2015/04/09/world/brazil-scandal-protest-qa/
The number of scandals, street protests and court cases against major figures, companies and organizations spreading across the region may indicate that some kind of crisis point is being reached and that ordinary citizens are no longer prepared to accept this culture. The next couple of years will be crucial in seeing whether an evolution towards a more transparent and less corrupt political environment is possible.
See ‘ Latin Americans Stand Up To Corruption’ by Jorge G. Castaneda, Foreign Affairs, Jan-Feb 2016 for an excellent summary of the situation.
h) The need to build a functioning market economy and create a better business environment to attract investment. This remains a serious challenge in many of the poorer countries of the area. Uruguay has been an outstanding example of how to do this while reducing poverty and boosting welfare. Its economy has seen steady GDP growth, 4.4% in 2013, 3.3% in 2014, but 2015 has seen Uruquay’s economy also in trouble.
i) Migration from the countryside to the outskirts of cities and into the huge slums (favelas) and towards the richer countries in the area and northwards towards the US. Exploitation of migrants by organized crime.
j) Organized crime and its hold on society, in particular, as regards drugs production and trafficking. This is largely a consequence of poverty and the social marginalization of the very poor. In Mexico nearly 13,000 people died in violence blamed on organized crime between January and September 2011. The official death toll in Mexico’s drug war between Dec 2006 and Dec 2013 is 60,000. Estimates from other sources give a much higher figure of120,000. There were also 27,000 people who went missing in the same period. The figures are very high in most of Central and South America, with 45,000 dead in the area due to the drugs war in the 5 years to Dec 2011. As regards crime and gang violence in Brazil, in 2006 more than 49,000 people were murdered according to the Health Ministry. Between 1979 and 2003 more than 500,000 people were killed by firearms according to the UN. Between 1978 and 2000 there were 50,000 victims just in Rio de Janeiro alone. In one year in Rio the number of deaths was 8 times that of the number of Palestinians and Israeli killed in the same period. 11.4 % of the population of Brazil (6% of the total population) live in favelas, slum areas where criminal gangs took control from the 1970s onwards. With the Community Policing program the homicide rate in these areas fell 21% in 2009-10 but rose again later. The scale of this problem puts in question the rule of law in many areas. In preparing to host the World Cup and Olympic Games the Brazilian government undertook a campaign (a “pacification” policy) to clean up the favelas in Rio and win back control of them. How successful this operation will be in the long term remains to be seen. At the moment, while there are still favelas in Rio essentially ruled by drug traffickers and other organized crime groups, the favelas in the South Rio Zone and some key favelas in the North Rio Zone are mainly run by the Police Pacifying Units (UPPs) despite sporadic gun fights and drug-dealing. This could be a model for the future. However, there is growing criticism of police methods and violence.http://upsidedownworld.org/main/brazil-archives-63/5402-the-pacification-of-rio-de-janeiro-brazil-military-intervention-in-schools
http://www.internazionale.it/video/2015/12/02/pacificazione-favelas-rio-de-janeiro
k) Destruction of the environment, pollution and deforestation. The deforestation of Amazonia has decreased in recent years but in size it has been reduced by 20% since the end of the 1960s and it is still shrinking. Among the main causes are human settlement, development of the land for use as pasture and soybean production, and timber production .http://en.wikipedia.org/wiki/Deforestation_of_the_Amazon_Rainforest
http://greenpeaceblogs.org/2013/03/29/deforestation-in-the-brazilian-amazon-on-the-rise-again/
l) Latin American economies are based too much on the export of raw materials instead of manufacturing and industrial production. This is a real challenge, even for some of the area’s biggest economies like Brazil, Argentina and Mexico which have large domestic markets and should be able to supply them with high-quality industrial goods. Instead there is an overdependence on the production of agricultural good and commodities.
m) population growth – this is still high in the poorer countries of Latin America (but generally not as high as in the past), which have a problem to provide food, clean water, shelter, jobs and services for an expanding population, but is much more manageable in the big South American countries where the population growth rate was below the GDP growth rate until 2015. (Brazil’s population growth rate is currently 0.83%) Generally population growth is lower than in Africa and Asia but higher than in Europe or North America (particularly when migration is excluded). Nevertheless, combined with poverty it increases migration from rural areas to the cities and to other states (e.g. from Mexico to the US).
n) In general, there is a democratic deficit between constitutionally guaranteed freedoms and rights and everyday reality and a need for greater access to the justice system for the poor.
Conclusion – Latin America’s future now largely depends on how seriously it responds to the opportunity (which economic growth has provided it with) to try and deal with the problems outlined above. Latin American countries now have democratic constitutions. So the main political challenge is to reduce the gap between theory and practice, democratic principles and the creation of a truly democratic society, particularly for those most at risk, the poor, women and minorities. So far some progress has been made, for example land reform in Brazil under President Dilma Rousseff and former President Lula and previous administrations, but much more remains to be done. As parts of Latin America grow richer they will start to play an increasingly greater role in international affairs. However, given the current economic slowdown and the various scandals and accusations of corruption Latin America’s attention may remain focused on internal affairs rather than international affairs for some time.
The South American free trade area, Mercosur, is an attempt to reduce and eliminate trade tariffs and to promote a freer movement of goods, people, and currency within a growing area, as part of an ongoing process of South American integration, and thus to boost trade, reinforce relations between members and strengthen the position of these states in relations to other countries and areas of the world, e.g. its expanding economic relations with China (see my notes on Brazil and China in the handout on the BRICS). It will be interesting to see if it follows the evolution of the EU towards a closer economic and political union. The Brazil 2014 World Cup and the 2016 Summer Olympics, hosted by the city of Rio de Janeiro, have provided an opportunity for Brazil to show the world how Latin America is changing and counter old perceptions and stereotypes. However, the wave of protests against the money spent on the World Cup and Olympics and the accusations that the government has failed to share the gains of Brazil’s growth with the poorest citizens may make the task of showcasing the country’s progress more difficult. Finally, the election of Pope Francis I will focus attention on his homeland, Argentina, and more generally on Latin America and its problems, especially given his expressed commitment to a simple Christian faith and solidarity with the poor. He made his first visit to Ecuador, Bolivia and Paraguay in July 2015 and will visit Mexico in February 2016 and then Argentina, Chile and Uruguay in June 2016.Some background reading and data on Latin America
https://en.wikipedia.org/wiki/Latin_America
http://www.imf.org/external/pubs/ft/survey/so/2015/CAR042915A.htm
http://en.wikipedia.org/wiki/List_of_Latin_American_countries_by_population

http://www.worldbank.org/en/region/lac/overview

http://povertydata.worldbank.org/poverty/region/LAC

http://www.worldbank.org/en/news/press-release/2015/03/09/breaking-the-cycle-of-chronic-poverty-in-latin-america-and-the-caribbean

risk of falling back into poverty

http://www.undp.org/content/undp/en/home/presscenter/pressreleases/2014/08/26/un-tercio-de-los-latinoamericanos-en-riesgo-de-caer-en-la-pobreza-dice-el-pnud.html

see ‘Social Panorama of Latin America 2014’ at

http://repositorio.cepal.org/handle/11362/37627

http://www.cepal.org/en/comunicados/se-estanca-la-reduccion-de-la-pobreza-y-la-indigencia-en-la-mayoria-de-paises-de-america

http://www.economist.com/blogs/americasview/2014/01/poverty-latin-america

General

http://en.wikipedia.org/wiki/2013_protests_in_Brazil

http://en.wikipedia.org/wiki/2014_protests_in_Brazil

http://en.wikipedia.org/wiki/2015_protests_in_Brazil

Latin America’s population is 560 million compared with 310 million in the US, but its GDP is only 29% of that of the US. Much of Latin America won its independence more than 100 years before countries like India and Korea. Yet Latin Americans still tend to blame their Spanish colonial past, US interference or the policies of international financial institutions for the slow pace of development, rather than seeing it as their own problem. Recognizing their own responsibility for current conditions could be the key to real improvement in the future.

Arias identifies 4 cultural traits which are obstacles that need to be overcome. These are resistance to change, absence of confidence, fragile democratic norms and a weakness for militarism.

Resistance to change: Latin Americans glorify their past (which really has little in it to glorify) and perhaps fear change, preferring to hold on to established privileges and the status quo. This is true at many social levels – the rich and powerful, the unions, public officials and the civil service, and large private sector companies which make deals, legal and illegal, with government. So instead of a culture of gradual reform and improvement they have a culture of preservation punctuated with occasional revolutions. There are too many restrictions on business start-ups, too much bureaucracy and a failure on the part of universities to provide graduates with the necessaries skills to promote economic development.

Absence of trust: Probably as a consequence of their historical disappointments Latin Americans do not trust government, the legal system, social institutions, like the police and schools, or one another. Yet for any society real progress seems to require that people can trust government, institutions and other citizens to act in a way which is predictable and reliable.

Commitment to democracy: Despite the fact that with the exception of Cuba the whole area can be considered democratic today, democratic norms remain fragile. Despite constitutions that proclaim democratic rights and other high-minded treaties the social realities of Latin America are far from these ideals. Moreover, there remains an attraction with authoritarianism in government, a glorification of the nation and a tendency for democratic leaders to use rhetoric and demagoguery.

Militarism: Although the region is now mainly peaceful (except for Colombia) spending on the military remains high and the role of the armed forces seems exaggerated given Latin America’s need to overcome the memory of past dictatorships. The widespread presence of soldiers in towns and cities does not help to build confidence in the strength of democratic and social institutions.

These are problems that Latin America needs first to recognize as part of a general fear of change, and then to begin to deal with. Economic growth alone will not be sufficient to produce real progress.

For full text go to:

http://www.foreignaffairs.com/articles/67202/oscar-arias/culture-matters

However, if you decide to use these ideas you should cite former President Arias as he himself is Latin American and some of his comments might otherwise seem prejudiced if made out of context by a European.

English for Diplomacy

domenica 9 aprile 2017

What are the main challenges facing Latin America?

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