Seen from Washington, Latin America often looks like a speck. American policies, such as trade, are taken with little or no reference to the region. Indeed, the US does not really have a policy on Latin America, even as its economies and political systems sink deeper into trouble. When the administration of President George W Bush – which once promised to make Latin America a priority – does turn its attention to the region, it tends to make a mess of things. That is what happened in April, when Washington welcomed the shortlived coup against Venezuela’s President Hugo Chávez, a legitimately elected leader. But why should anyone care what Washington thinks about Latin America anyway?
We should care because Washington’s political agenda – or lack of one – establishes the spolicy framework for the region. Protectionist US trade policy hits Latin America’s exports. The US dictates policy at the International Monetary Fund, which affects economic policy in just about every country in Latin America. Washington sets the tone for broader relations with the region. The cold war brought military governments to power (with US support) and the 1980s were marked by a return to civilian rule (with US encouragement). The 1990s saw the emergence of the Washington Consensus of free market reforms. When the US is interested in a country or region, investors realize they can count on US support if things go wrong. When Mexico crashed in 1994-1995, the Clinton administration bailed out (mainly US) investors. But when Argentina crashed in December 2001, no such support was forthcoming. Foreign direct investment is less subject to manipulation, but business executives always feel more comfortable investing in countries that have Washington’s informal seal of approval.
Latin America must shoulder a lot of the blame for the drift in US attitudes. There is no forceful Latin American leader willing or able to argue the region’s case in Washington or capture the public imagination the way President Vicente Fox of Mexico nearly did. Latin American governments have bungled reforms, exasperating their own people, international financial markets and Washington officials alike. It is sad that Latin America is so disunited that it must look to the US for leadership. What should Washington’s policy to Latin America be? It should promise generous support for countries that persevere with free market policies and democratic government, that it will pursue genuine trade liberalization and integration and scrap its militaristic anti-drugs policy.