Executive Summary
- For a successful positive transition of Latin America it is necessary to pursue a consortium of policies, not merely one or two.
- Real stability is crucial. Hard right and hard left regimes are detrimental to development, a growing middle class, and human rights. Rather than scape-goating, political groups should focus on contributing positively toward actual progress, while respecting the rule of law and the rights of others.
- Governments must be responsive to their people rather than the highest bidder while becoming more efficient and keeping proper records.
- Private property must be respected in statute and in fact and be properly documented; laws must be simple and clear and legal processes should as much as possible be expedited.
The chief goal of any state should be a socially, politically, and economically stable, peaceful liberal democracy. To that end, several steps must be taken and several considerations made.
The first is that neither hard right nor left regimes have worked in the past. A stable government and tranquil society not prone to extremism or scape-goating is vital to a long-term functional middle class and thus the economy itself and liberal democracy.
The tendency in Latin America has historically been to behave similar to a pendulum, swinging widely from one end of the political spectrum to the other as each end offers the solution to the other’s problems while creating a host of its own that then beg for an equally wide swing back in the other direction. Unfortunately and quite tragically, such wild swings bring into power regimes that have little regard for human life, not to mention other human rights. Such regimes both left and right use as their corner stone, utter brutality and the murder of those who would question the legitimacy or the actions of the new power.
Chile’s Augusto Pinochet did succeed in the 1970s and 1980s in some aspects of creating a stable society; for instance, his privatization of several state-run industries were quite helpful to the economy. However, liberalization of the economy concurrent with restriction on liberties overall and the use of brutality meant that the regime left out a key ingredient to a successful society. The loss of personal liberty and a looming police state, the ability of the people to keep government and its employees in check, and the inability of policies to change were harmful and made it difficult or impossible to oust corruption wherever it might have been found. This made Pinochet’s regime unable to be considered safe for the long-term growth of the middle class. Meanwhile, in Nicaragua and Cuba, the Somoza and Batista regimes performed even more poorly, neither doing much to spur economic growth nor respect personal freedoms.
By contrasts, governments such as Fidel Castro’s in Cuba, the first regime of Daniel Ortega in Nicaragua, as well as that of Hugo Chávez have also neither provided economic improvements, political freedoms, nor a state that respects human life; however, their often populist-sounding rhetoric did and do in many instances speak to the concerns of their populations. Unfortunately, such messages often neither deliver solutions nor provide a mechanism through which the people can lawfully criticize areas of lack once these regimes come to power. They become, rather than states that solve the problems caused by the regimes they overthrow, merely kingdoms of make-believe where little is fixed, but everyone must pretend that it is. In reality, the people have simply traded one self-serving dictator for another.
Nevertheless, these left-leaning regimes do well at attaching themselves to popular grievances about corruption and abuse by large private interests that collude with government officials to suppress wages, limit competition from small businesses especially, and harm the local environment. Often, these business interests are foreign, which also touches on a fear – sometimes legitimate – of losing a sense of national identity and control to outsiders. While free trade is important, corporatism is harmful and must be avoided as it often leads to and grows corruption, suppresses the middle class, and creates a more hostile lower class, which in turn leads to political instability, and from that is seen a snow-ball effect of an ever-weakening economy, which leads to more instability and more scape-goating.
At present, a number of Latin American countries are becoming increasingly less stable even as transparency seems to diminish, according to the Heritage Foundation’s annual Index of Economic Freedom. In it, states like Guatemala, Trinidad, Mexico, and Honduras have continued to drop in the index, for reasons such as ambiguously written or enforced private property laws, arduous civil legal processes, corruption, rising violent crime, and increasing political instability – the latter certainly most present in Honduras at this time and may also soon become more noteworthy in Mexico. Such factors contribute to a sense of insecurity, and as such, less economic activity and growth, which then self-perpetuates. While some states like Trinidad are doing well with respect to lowering taxes and thus creating more economic freedom, it and similar states need to address all the key issues necessary for long-term stability. (i)
The best way to ensure poverty reduction is by creating a stable legal system free from corruption, as well as one that is responsive to the needs of the citizens and does so efficiently. Such a system must also recognize adults as equal before the law and must recognize private property rights as a matter of legislation and practice. This should also include a tax structure that does not discourage economic activity or become clearly oppressive in itself. While stability is important, so too are human rights, which also ensure a long-term sense of security by which those conducting business can be free to focus on that business and not any statewide dysfunction that may tend to endanger personal interests.
Property rights should include the absence of capricious expropriations and must provide a process by which if property is taken, it is not done so without due process in criminal and civil matters and just compensation in matters of necessary acquisition for projects such as the building of roads. There must also be a proper and efficient manner of keeping records so that property owners do not get lost in the bureaucratic court system. (ii)
Particularly in light of the history of Latin America, it becomes ever more crucial that a sense of political stability exists; this is partly why otherwise brutal dictatorships of both right and left have seemed to have such longevity regardless of the economic conditions such regimes create or exacerbate. Nevertheless, the people in Latin America need not only political stability, but also economic and personal liberty and freedom from terror so that they may be free to move out of the poverty which continues to be a considerable problem in much of the region.
In summary, states should seek to create stable societies, where government does not hinder personal freedom but does provide a framework through which a coherent, efficient, and systemically sound legal system exists, whereby social and economic progress is free to take place. At the same time, such states should become politically more responsive to public concerns, so that they ameliorate practices and policies according to the public’s wishes and efforts rather than thwarting them. If such a strategy is undertaken, it might be possible to see Latin America progress significantly as a region over the course of this century.
i. Ambassador T. Miller, K. H. (2009). 2009 Index of Economic Freedom. The Heritage Foundation. Washington, D.C.: http://www.heritage.org/Index/country/
ii. Noriega, A. R. (2004). The Bush Administration’s Western Hemisphere Policy. Winter 2003-2004. New York: The DISAM Journal (PDF): http://www.disam.dsca.mil/pubs/v.26-2/noriega.pdf