Same-Old, Same-Old Approach Backfiring

U.S. neglect of Mexico, and of the Western Hemisphere in general, has begun to take its toll on U.S. interests. After President Bush indefinitely put off Mexican President Vicente Fox’s immigration initiative last week, Mexico announced that it would use its seat on the U.N. Security Council and vote with France to soften the U.S.-sponsored Iraq resolution. Had the White House kept Mexico -- all of Latin America -- higher up on its post-Sept. 11 agenda, might the Security Council vote of another ally still be in play?

Unfortunately, the Bush administration exhibits little concern over the potential consequences of neglecting Latin America. Judging by the White House National Security Strategy, which sets the tone and course for U.S. foreign policy, it still hails the 1990s formula of free trade, economic liberalization and democratic politics as Latin America’s fastest ticket to prosperity and freedom. Predictably, the only significant addition to the document relevant to the region has a terrorist spin: The formula reputedly can also weaken terrorism’s appeal to the poor.

Be that as it may, the overall strategy perpetuates Washington’s “80/20” problem. Presumably, the U.S. promoted trade, economic integration and free enterprise not because these policies would benefit the wealthiest 20% in Latin America. It was the bottom 80%, living in poverty and scraping by in the informal economy, that liberalization was supposed to help. But inequality in Latin America is worse today than it was 10 years ago in almost every country.

In Mexico, whose exports have increased dramatically because of the North American Free Trade Agreement, the middle class is ravaged, poverty and crime have worsened, and the once-thriving maquiladora sector is bleeding jobs to Asia. Yes, billions of investment dollars that followed the Clinton administration’s intervention in the 1994 peso crisis have created pockets of wealth. Most Mexicans, however, have yet to experience the benefits.

Only Chile has cut poverty by half in the last 10 years, and that success has more to do with the post-Pinochet solidarity of its citizenry and the fiscally conservative policies of its center-left government than free-market economics.

In the remainder of Latin America, the lack of meaningful benefits from more open economies and less state control have sparked political and social backlashes. Luckily, the democratic way is established enough to accommodate the political unhappiness of the millions who have been left on the economic sidelines. But the results have not pleased Washington: Hugo Chavez in Venezuela; Luiz Inacio Lula da Silva in Brazil; a representative of coca-growing peasants nearly winning the presidency in Bolivia and now heading the largest opposition in both houses of Congress; and leftist presidential candidates gaining in Ecuador and Argentina.

Central to the 80/20 problem is the skewed nature of U.S. knowledge of the region. I recently asked a U.S. government official to assess the reach of Cuba’s social services in Venezuela. He had no idea, because Venezuela’s poor -- 80% of the country -- remain virtually “impenetrable” to the United States. It was a refreshingly frank acknowledgment of the fact that most Americans, whether governmental or private, talk to basically the same people -- their peers -- in the top 20%. Accordingly, over the years, they have acquired and transmitted to Washington a highly distorted view of “the street” in Latin America. Conversations with taxi drivers at airports or hotel maids hardly balance the profile. Thus, the U.S. political class has largely set Latin American policy priorities according to knowledge mostly gleaned from people who already enjoy economic success and political power.

The consequences are clear. Forty-one years ago, when Cubans rallied around Fidel Castro to defeat a U.S.-backed invasion force, Washington was surprised and humiliated. It had entirely misjudged the breadth of support for the revolution. Why? Because, just as today, American diplomats, intelligence agents, journalists and businesspeople talked mainly to their Latin American counterparts or to the political opposition, rather than to Castro backers.

The U.S. circle of contacts in Latin America has expanded since the 1960s, but when it comes to the admittedly hard work of getting a handle on the diversity of experience and views in the region, Washington still hears too few voices. One holdover from the McCarthy era is a strong bias against the on-the-ground reporting that international and local nongovernmental organizations can provide. Whether involved in human rights, humanitarian relief, labor, the environment, health or education, NGOs frequently have their fingers on the pulses of the poor and politically marginalized. Yet, especially in the self-censoring environment of today’s U.S. debates on Latin American policy, individuals and institutions with a direct sense of what shakes for the forsaken 80% are often dismissed as insufficiently independent.

No wonder that the prospect of a number of left-of-center governments taking power in the region provokes fear in Washington. Recently, old-line ideological conservatives in the United States and Latin America warned that Lula, Chavez, Castro and their supporters, with a little help from the rebels in Colombia, will deliver South America to the anti-American narco-terrorist dark side. But with the Soviet Union history, Cuba no longer arming insurgencies but instead sponsoring peace talks, and only one superpower calling the shots, what is the real fear? Chavez aggravates Washington, but his oil still flows to the U.S. And despite their torturous political and economic problems, neither Chavez nor Lula is flirting with old-style statist alternatives. Domestic politics and international economic forces won’t indulge such temptations.

U.S. hand-wringing over “populism” -- code for the disorganized poor gaining a political voice -- is thus a convenient distraction from the far more difficult challenge of giving breathing space to local solutions that, in questioning the reformist orthodoxy, strive for a greater balance between market forces and state intervention. With Colombia, Haiti and Argentina in partial collapse, Central America and the Caribbean ridden with crime and increasingly vulnerable to drugs and thugs, and a newly invigorated electorate voting anti-establishment candidates in the Amazon and Andes regions, we can no longer rely on the 20% solution.