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Will Latin America Sink or Swim?
Washington, September 11, 2003 - Lack of competitiveness, weak institutions and a crumbling civil society have hobbled growth in the emerging markets of Latin America, according to Riordan Roett, director of the Western Hemisphere program at SAIS.
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Riordan Roett tells IRP Fellows that Latin America has not fared as well economically as East Asia. |
Speaking to a group of IRP Fellows in International Journalism, Roett discussed economic prospects for Latin America. Only 40 years ago, he said, the GDP in Latin America was 40% higher than in East Asia.
Today, the region suffers from stagnant rates of growth and low capital flows. A rash of authoritarian military regimes and flawed fiscal policies have crippled almost every country in the region. Trust in politicians is low, corruption is rampant, and the continent has been slow to adapt to changing technologies.
According to Roett, emerging markets from East Asia have done better in all of these areas. East Asia, which had no natural resource base, focused on developing markets and productivity. Roett said East Asians invested in education and in building a capable, productive middle class. East Asian emerging markets adapted to change. For example, competitiveness among Internet service providers in Korea is strong. As a result, since 1960, income has increased nine times in East Asia, while in Latin America, income has only doubled during the same time period.
Chile and Brazil are a couple of bright spots in an otherwise bleak regional picture, Roett noted. When civilian elites returned to Chile from exile after the end of Pinochet's rule, they agreed to work together with remnants of the old regime. The new leaders strengthened civil institutions, and diversified and added value to exports. "They have superb financial management," said Roett.
Roett also expressed strong confidence in the new leader of Brazil, Luiz In�cio Lula da Silva, known to his countrymen as "Lula." He instilled party discipline and is setting the stage for that country's growth. Brazil may also exercise its clout internationally when it takes a rotating spot on the UN Security Council next year.
On Argentina and the first 100 days of its newly elected president Nestor Kirchner, Roett expressed tentative hope. "There's a certain disbelief�we just don't know [what he's going to do]."
Copyright © 2005 International Reporting Project. All Rights Reserved.