The Need for a New Inter-American Stratgey

It has often been noted that America has neglected its relations with its neighbors to the South. There is every reason why the United States and the nations of Central and South America and the Caribbean should be the best of friends.

It was the United States that was the first nation ever to break the bonds of colonialism and achieve its independence from European domination. The United States served as the inspiration of every Latin American freedom fighter from Simon Bolivar onward. Later, it was to be America and the Monroe Doctrine which protected the hemisphere from further foreign interference.

The American Security Council is seeking innovative ways to address the problems faced by United States and the Latin American nations, including but not limited to the issues of economic growth, free trade, drug interdiction and human rights. ASC’s goal is to formulate a regional strategy to deal with these problems in the context of a new international strategy.

A new strategy is necessary because the relationship between the United States and the Latin American nations has changed fundamentally since the end of the Cold War. Prior to the collapse of the Soviet Union, America focused its attention in foreign policy and economic cooperation towards Europe and Asia, the arenas where the main battle against the forces of international Communism was waged.

As a result, more through a simple lack of time and resources rather than indifference or hostility, America often did not concern itself with the problems of its neighbors to the South. Issues of economic development, trade and human rights in the Latin American nations usually only intruded themselves on the U.S. consciousness when they were linked to the Cold War itself. This occurred when nations such as Cuba, Nicaragua or an El Salvador would find themselves in U.S. newspaper headlines for a few weeks or months, until inevitably American attention would turn to the newest crisis in Western Europe or Southeast Asia.

In response, the nations of Latin America turned inward, concerning themselves almost exclusively with their own domestic issues, showing little interest in international partnerships or cooperation, either with the United States or their neighbors.

All this changed with the fall of the Soviet empire and the mammoth changes which occurred on the world scene. With the elimination of the great menace of Soviet Communism, American foreign policy could now devote itself more to the cultivation of old friends and new alliances for the purpose of ensuring the peace, rather than focusing on combating a massive foe.

The liberation of Eastern Europe inevitably led to the weakening of Western Europe’s ties with the United States. Now that the Atlantic Alliance was no longer a question of the survival of the democracies, the peoples of France, Germany, Italy and the other Western European nations looked to their compatriots across the Elbe to renew old ties and resume old trade and commercial relations. This situation, along with the burgeoning in Asia of the new economic powerhouses of China, South Korea and Japan, meant that the United States would need to find new trading partners and forge new commercial ties to continue economic growth and maintain its standard of living.

The nations of Latin America witnessed the failure of both Communism and planned, inward-looking economic systems. If they were to prosper in this new environment, they would have to move aggressively toward free market economies and seek new markets for their goods in order to remain competitive in a world where to remain isolated was to inevitably fall far behind. But reform has brought with it its own problems as well as benefits.

Another serious problem which confronted both the United States and the Latin nations was the scourge of the international drug trade. Each party blamed the other for the problem. Americans saw the nations of Central and South America as best as conduits for, and at worse the actual producers of, the deadly drugs that poured into their country and demanded they put an end to it.

The Latins retorted that the drug trade would not exist without the American demand for cocaine, heroin and marijuana. They suggested that reducing this demand was the obvious solution to the problem. And as helplessly as the Americans watched millions of their citizens become addicted to the deadly poisons, the citizens of many Central and South American nations watched as their societies became soiled and their governments corrupted, by the massive infusion of drug money.

Furthermore, although 34 of the 35 Latin American nations are now democracies in name, there is still some way to go before they all become democracies in practice. Human rights violations still occur throughout the hemisphere on a regular basis. It will take considerable effort before many of the countries in Central and South America and the Caribbean can boost records of toleration for individual rights and liberties that can stand up to the standards set by the United States and the nations of Western Europe.

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<!–[if supportFields]>ADVANCE d4<![endif]–><!–[if supportFields]><![endif]–> Economic growth was a fact of life in Latin America from the 1940s through the 1970s. This trend was reversed in the 1980s by Latin America’s “lost decade” of debt crisis (the region’s crushing foreign debt totaled $400 billion) and shrinking economies. The response to the debt crisis were the economic reforms of the mid-1980s throughout Central and South America — economic and political stability, encouragement of foreign investments, controlled inflation and unfettered trade.

These reforms led to some extraordinary successes and transformations once thought unimaginable in Latin America. By 1996, inflation in Latin America had fallen to an average of 22 percent. This is still far too high, but it is the lowest collective rate in more than two decades. Foreign investments have come back strong. Many unprofitable state-owned industries have been downsized or sold off. 25 Latin American countries have unshackled their international trade, 15 have rewritten their tax codes, 24 have gone on privatization sprees, five have reformed their labor markets and five have revamped their pension system.

Unfortunately, these reforms have had their price. Perhaps the worst of these is the rise in unemployment across Latin America. Five countries have official unemployment rates above 15 percent, led most significantly by Argentina’s 17 percent. In nine countries, unemployment has risen since 1991 — and in many of them, the official figures sharply under represent reality.

In 1997, the average unemployment rate for the region was 7.8 percent, more than one full point higher than in 1995, and the highest single-year increase since 1983. Despite moderate economic growth and recovery since 1989, unemployment has risen almost steadily and most experts agree that even if governments hold to their course of fiscal responsibility, unemployment is too deeply rooted for a quick cure.

It is not surprising then, that in many Latin American nations, the patience of the people with the process of economic restructuring is beginning to wear thin. A 1997 poll for the United Nations Development Program found that 77 percent of Latin Americans believed that the economic system favors the rich. The perception is that economic reform equals survival of the fittest and that it has left millions unfit for survival.

There are some disquieting signs of discontent and despair. In cities like Buenos Aries, Caracas, Guatemala City, Lima and Rio De Janeiro, new waves of unemployment and poverty have created vast new urban slums. Guerrilla movements are on the upswing in Colombia and Peru. Non-political violence is increasing as well as crime, especially among juveniles and young adults.

The use of private armies and security forces by the wealthy to protect themselves and their property is booming. Cash-strapped governments have had to drastically reduce the level of social services to the poor and unemployed. As a result, half of all Latin American students drop out of elementary school and only one in four enrolls in high school!

Drug trafficking has also been weaving itself into the social, economic and political fabric of countries once considered relatively drug free (Argentina, Brazil, Chile, Uruguay and Venezuela) and it is expanding among the traditional players (Bolivia, Colombia, Mexico, Paraguay and Peru).

Nearly a decade into regional economic reform, the failure to create and sustain enough work and well-being is starting to affect the popularity of presidents and to raise questions about future economic and political stability. ASC believes Latin American leaders must focus on education, job creation, and the development of stable government institutions and not just on improving economic statistics.

The international community can help by aiding in the development of Latin American social institutions — as a foreign policy priority. Otherwise, all of the impressive gains made over the past 15 years — in democratization, development, establishing civilian control over government and stabilizing the economy — will be placed in danger by the combined forces of irresponsible populism, new military governments, guerilla movements, drug traffickers in many places and lawlessness and social breakdowns everywhere.

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<!–[if supportFields]>ADVANCE d4<![endif]–><!–[if supportFields]><![endif]–> Since the early 1980s, revolutionary changes have been unfolding in Latin America. Governments are abandoning decades of economic nationalism and protectionism and adopting free market development strategies. The United States has an enormous stake in all of this. Latin America is reemerging as a vital market for U.S. products. Moreover, economic reform in the region has been encouraged by American backed debt-restructuring programs and the promise of free trade for regimes that deregulate their economies.

After World War II, Latin American governments attempted to industrialize their societies when they encouraged manufacturing by erecting high barriers against foreign imports. So long as economic times remained good, this system worked fairly well throughout the 1970s.

However, these “corporatist” policies inevitably led to native industries which were inefficient and uncompetitive in the international marketplace. When the downturn of the late 1970s and early 1980s arrived, planned economies throughout Central and South America collapsed. Many Latin governments were then forced to seek international assistance and to begin moving toward free market and free trade policies.

Mexico, Argentina, Jamaica and Costa Rica are among the nations that have made impressive progress; Chile, which began the reform process in the early 1970s, has essentially completed the transition to an open market economy. Unfortunately, reforms have been slower and less steady in other countries. Notable in this regard is Brazil, which is plagued by the complexities of sheer size and diversity. Venezuela was once a leader in reform but has been dangerously backsliding in the wake of steeply contracting oil revenues and the election of a left-leaning government in December 1993.

As a result of these changes, trade between Latin America and the rest of the world, and especially, between Latin America and the United States, has expanded dramatically. To give just a few examples, during the last ten years, U.S. exports to Brazil have doubled, those to Mexico have quadrupled and those to Argentina have increased by five-fold! Total exports to Latin America and the Caribbean were $92 billion in 1996. From 1987 through 1996, U.S. exports to Latin America grew at an average rate of 21% a year, double the growth rate of U.S. exports to the European Union during the same period.

U.S. exports to Latin America are not merely large in terms of dollar amounts, but in the proportion they make up of the total international trade of both parties. It is expected, for example, that U.S. exports to Central and South America and the Caribbean will surpass those to Europe within ten years. Latin America in turn buys more than 45% of its imports from the U.S. By contrast, China buys only about 10% of its imports from America.

Even U.S. trade with relatively small Latin American nations is still a significant part of U.S. world commerce. America exports more to Chile with its 14 million people than to India with its close to a billion souls! U.S. sales to tiny Costa Rica with its three million people almost equal those to Eastern Europe with 100 million inhabitants.

In addition, more than 85 percent of United States sales to Latin America are manufactures such as transportation and sophisticated electrical equipment, industrial machinery, petroleum, and mining equipment, environmental systems, pharmaceuticals, scientific instruments and chemicals. These high-tech industries pay the country’s highest wages and expanding their export is a key element of the Clinton administration strategy to create attractive jobs.

As positive as these developments are, there was a desire among many who wished to expand trade between the United States and Latin America–and Canada as well–even more dramatically by the creation of a free trade zone encompassing the entire Western Hemisphere.

The first step towards this goal was the adoption by the U.S., Canada and Mexico in 1994 of the North American Free Trade Agreement (NAFTA) which will eliminate all trade barriers between those nations over the next 15 years.

NAFTA was followed by the Summit of the Americas in Miami in December of 1994. At the Summit, President Clinton and the 33 leaders of the other American democracies agreed by 2005 to complete negotiations for and start carrying out a treaty which would establish a free-trade zone in the Americas. “When our work is done,” President Clinton stated, “the free trade area of the Americas will stretch from Alaska to Argentina. In less than a decade if current trends continue, this hemisphere will be the world’s largest market.”

At that time the prospects for such an eventual result seemed at their brightest. The next step was expected to be the admission to NAFTA of the nation of Chile. Chile, although no economic giant, was the first candidate for admission because of the remarkable progress it had made in instituting free markets reform, privatization of industries and reduction of inflation.

“Chile is important because it shows the way,” David Hirschman, Manager of Western Hemisphere Affairs at the U.S. Chamber of Commerce, told the Congress. “It has enjoyed 6 percent average growth for the past 12 years, has a long history of democracy, a 96 percent literacy rate, diversified trade and is outward-looking.” Chile was expected to be admitted to NAFTA no later than 1996. “We have been the Three Amigos,” Prime Minister Jean Chretien of Canada declared, “Now we will be the Four Amigos.”

Then no more than a week after the Summit ended, disaster struck. The government of Mexico had substantially deleted its foreign currency reserves and found itself unable to support the peso’s value. The Mexicans allowed the value of the peso to float and in two months it lost nearly half its value in relation to the U.S. dollar. In order to prevent the collapse of the Mexican economy, the U.S. and the international community was compelled to put together a $50 billion package of credit aid. As a result of the devaluation of the peso, the U.S. trade surplus with Mexico declined from $5.4 billion in 1992 to $1 billion in 1994.

The Mexican crisis revived opposition to free trade in the United States in general and in the U.S. Congress in particular. A 1996 poll conducted by the Bank of Boston showed that most American respondents thought that business rather than consumers benefitted from free trade and that opening borders cost them jobs. An immediate result was that Chile was not admitted to NAFTA in 1996 and no certain date for its future admission can be predicted at this time.

The delay of Chile’s admission to NAFTA has caused some of the Latin American nations to doubt the U.S. commitment to the expansion of free trade within the Americas. “If you say no to Chile, you have said no to free trade,” said the Foreign Minister of one medium-sized Latin American country. “It is a litmus test.”

However, even if the U.S. public is now balking, the progress of increased free trade within the Western Hemisphere seems inevitable. Even before the North American Free Trade Agreement, nearly every South American country had developed agreements with at least one other to promote trade by lowering tariffs and quotas.

Through the Andean Pact, Bolivia, Colombia, Ecuador, Peru and Venezuela eliminated most non-tariff barriers among themselves and agreed to a common external tariff. Colombia, Venezuela and Mexico have formed a free-trade pact called the Group of Three.

The largest Latin American trade bloc is the Mercosur, a common market established by Argentina, Brazil, Uruguay and Paraguay. It represents more than half of South America’s gross domestic product and 40 percent of its foreign trade, comprising 240 million people and a total annual output of a trillion dollars. In June of 1996, Chile became a member as well and it is feared by U.S. government officials that this may make this nation less likely to accept NAFTA membership — if it is ever offered. Having already reduced tariffs by 75 percent, members of the Mercosur are working toward the free movement of goods and capital and ultimately full economic integration among the four nations.

The immediate risk for U.S. companies is that Latin American countries might make preferential trade agreements with nations or blocs outside the hemisphere, placing imports from the United States at a competitive disadvantage. Members of the Mercosur have been negotiating with the European Union about preferential trade agreements. Latin American trade with Asia doubled between 1990 and 1994 as well.

Indeed, some Latin American countries are showing increasing confidence in the ability of their nations to pursue increased free trade with or without American assistance. Recently, President Carlos Saul Menem of Argentina jokingly suggested that if the United States and its NAFTA partners wish to join Mercosur, they would be welcome to do so!

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<!–[if supportFields]>ADVANCE d4<![endif]–><!–[if supportFields]><![endif]–> It is not surprising that the long and so far unsuccessful campaign to curtail the drug trade between the United States and several Latin American nations has led to frustrations and tensions between all the parties involved, because both the drug exporting and the drug importing nations have suffered severely because of this deadly commerce.

On the U.S. side, it is of course the users of illegal drugs who have paid the price for the drug dealer’s profits. Current estimates are that 10,000 Americans a year die from illegal drug use and that it costs the U.S. economy 67 billion dollars annually. It is understandable then that the American public is outraged at the continued ease with which cocaine, heroin and marijuana are produced in such nations as Mexico, Colombia, Bolivia and Peru and smuggled into the United States. American officials have demanded that these nations be compelled to force the end to these massive criminal enterprises within their nations.

Nor can it be denied that men of good will in these Latin American nations have made good faith efforts to end the drug trade — and have paid the price as a result. Over the last ten years in Colombia more than 3,000 police officers and soldiers, 23 judges, 63 journalists and 4 presidential candidates have died in the fight to end the drug traffic in their country. In Mexico, the cardinal archbishop of Guadalajara and six bystanders were killed by drug dealers in May of 1995. Other Central and South American nations could provide additional examples of lives lost in the efforts to end the drug trade.

Nor have these efforts been entirely without their successes. In Colombia, just in the first six months of 1996, 25,000 acres of coca crops and over 5,400 acres of heroin crops were destroyed, along with 440,000 gallons of cartel liquid and 3.8 million kilos of solid drug-processing chemicals. The government has also seized 64,277 grams of heroin and 243 drugs labs. In addition, the offshore islands are being run by the military to hamper their use as transport points for the drug traffic. Along the Mexican border, seizures of marijuana at the Nogales, Texas station alone by the U.S. Border Patrol doubled from 1994 to 1996, while cocaine seizures exploded from 60 pounds in 1994 to 2,372 pounds in 1996.

Despite these exertions, in January of 1996, Lt. Gen Barry McCaffrey, USA, then the commander of the Army’s Southern Command and now President Clinton new drug “czar,” admitted that all efforts to halt the cocaine traffic into the United States, even including a joint military operation with Peru and Colombia which destroyed, forced down or seized 58 aircraft carrying drugs, had not succeeding in either affecting the price or supply of this drug on American markets.

The main problem is of course that the drug trade is already so well-established and so profitable that any attempts to end it without significantly reducing the demand for the product may well be doomed to failure. So long as the demand exists, eliminating any one particular supplier or producer will simply result in him being replaced by a new individual eager to reap the rich rewards of the illegal traffic.

Yet another factor which fatally hampers all attempts to curtail the drug trade south of the Rio Grande is the fact that the drug profits are so huge that they often dominate the economies of the nations involved, poisoning their societies and inevitably leading to pervasive official corruption and illicit –and sometimes overt– cooperation with the drug dealers. In Mexico, the country’s attorney general’s office estimated that in 1996, drug profits in that country amounted to an estimated $30 billion. This is four times the amount brought in by the country’s most profitable legal export, oil, in the same time period.

It is common knowledge that many Mexican officials receive two salaries; one from the federal and state treasuries, the other from their “business associates.” With drug barons able to outbid government salaries handsomely, it is no mystery why they have more authority in Northern Mexico than does the president of the republic.

This explains, if it does not excuse, the recent discovery that the head of Mexico’s own drug enforcement agency was himself in cahoots with the drug dealers and has led to a situation where the staffing of law enforcement agencies in that country has become a kind of game of musical chairs, in which corrupt officials are discovered, discharged and replaced over and over again.

There have been seven Mexican attorneys general in the last eight years and four heads of the Institute to Combat Drugs, the Mexican equivalent of the U.S. Drug Enforcement Administration in the same number of years. In September of 1996, Attorney General Lozano fired one out of six of every member of his entire federal police force, stating that they lacked the “ethical profile” required for the job, further stating that it could take 15 years to clean up the rest of the force. Ironically, Attorney General Lozano was himself removed from office three months later.

Not surprisingly, this internal rot has led to a dramatic decrease in the efficiency of Mexico’s efforts to the drug traffic across the U.S.-Mexican border. In 1993, Mexico had rejected U.S. assistance in its anti-drug efforts and announced that it would go it alone. In November of that year, President Clinton signed Presidential Decision Directive No. 14, shifting U.S. anti-drug efforts away from intercepting cocaine as it passed through Mexico and Caribbean and instead, attacking the drug supply at its sources in Colombia, Bolivia and Peru.

This policy, known as “Mexicanization,” has proven to be a total failure. Mexico has now become the main gateway for drugs into the U.S. Mexico’s drug arrests in 1996 were one-third what they were in 1992, the last year before the policy shift. Teenage drug use in America doubled during the same period, despite the spending by the U.S. of $3 billion to halt the flow of narcotics across our borders. A recent report by the U.S. Congress’ General Accounting Office stated, “U.S. and Mexican interdiction efforts have had little, if any, impact on the overall flow of drugs through Mexico to the United States.”

Despite these results, President Clinton has nonetheless re-certified Mexico as an American ally in the war against drugs, a decision which led to a firestorm of criticism within the U.S. Congress.

There have been credible accusations made as well that former President Ernesto Samper of Colombia had himself received $6 million in campaign funds from the drug cartels. These revelations led to Colombia’s decertification for the third year in a row on March 1, 1998.

American rage and disgust at this situation are understandable, but to their criticisms, the Latins make this point. They may have had no great success in cutting off the supply of drugs, but just what success can the Americans show in cutting off demand?

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<!–[if supportFields]>ADVANCE d4<![endif]–><!–[if supportFields]><![endif]–> At first glance, the issue of human rights in Latin America would seem to be moot. After all, for the first time in history, 34 of the 35 nations which comprise Central and South America are now democracies and presumably all the citizens of these countries have the same democratic rights as a citizen of the United States — in theory.

The one exception, of course, to this praiseworthy state of affairs is the Republic of Cuba, still under the iron thumb of Fidel Castro’s totalitarian Communist regime. So tight is the grip of Castro upon his unhappy nation that any improvement of the human rights situation there seems unlikely, short of Fidel’s passing, a change of heart or a massive military intervention on the part of the United States.

Since the prospects for any of these events coming to pass seem at best unlikely, and in the latter case, nearly inconceivable, there is little that can be done at the moment to aid the Cuban people. The U.S. will continue to maintain all the non-military pressure on the regime that America can muster.

However, human rights abuses are not always committed by strong central governments. The atrocities recently suffered by the Bosnian Muslims and the Tutsis and Hutus in Rwanda were no less horrific in that they were not the result of official state action, but the work of their fellow citizens unchecked by state authority.

We have become increasingly familiar with abuses in countries with weak or unresponsive governments. These abuses are committed by ethnic, religious and separatist extremists who fan group differences into hatred and sometimes genocide. The conflicts present us with a devastating array of new human rights problems. They are not problems from which the nations of Latin America have proven to be immune.

First, Latin America has suffered major social breakdowns. These breakdowns greatly increase the incidence of human rights violations. In addition to indiscriminate repression, torture and denial of habeas corpus, governments are criticized for lack of extensive and free participation by ordinary citizens in the political and social life of a country. The socioeconomic woes of the classes at the bottom have caused many poor to go from being marginalized to being excluded.

Second, the views of many Latin Americans about human rights have changed. Catholic, evangelical Protestant and other religious groups have been particular leaders in this new human rights movement. The same motives that led religious groups a decade ago to support democracy instead of military governments, whether of the left or the right, find expression today in human rights activities.

Third, most governments in Latin America lag in investigating and defending human rights. The pervasive corruption in Latin America’s strong bureaucratic tradition accounts in large part for governmental hesitancy. Turning over human rights protection to the Government is a mistake, it is said. Governmental agencies lack the independence needed for public accountability

Fourth, North Atlantic countries now influence human rights groups in Latin America. The U.N. Human Rights Declaration of 1948 initially affected first world countries. In fact, human rights were thought to be a first world luxury. Now that Latin American nations economies have improved, so consciousness of the importance of human rights has increased.

In Mexico, the human rights movement began with the failure of the Mexican government to deal with the aftermath of the disastrous 1985 Mexico City earthquake. The failure of the one-party paternalistic Mexican government to deal with the urgent needs of those devastated by the earthquake awoke a spirit of volunteerism among the Mexican people, who spontaneously organized by the thousands and worked to deal with the problems created by this calamity themselves.

They thus gained confidence in the ability of ordinary citizens to do a great deal, in contrast to their custom of waiting for action from an authoritarian government. From then on, social movements, grassroots and national, rose to a new level of activity. Human rights groups were in the forefront and more than 300 Mexican human rights organization have come into being.

Nor is Mexico a unique case among the Latin American nations. More than 3,000 organizations have sprung up throughout Central and South America to address human rights issues. These groups range from those that are national or provincial in scope to grassroots organizations.

An example of the type of problem that such groups are confronting is that of the homeless children of Brazil. It is estimated that some seven million homeless children wander the streets of Brazil’s cities by day and sleep in the open by night. Hundreds of them are murdered each year and many of them engage in criminal activities. More than 600 groups in Brazil are now working with children in danger.

Some of the most prominent of these human rights groups are the Truth Commissions in Nicaragua, El Salvador and Haiti; the UN Verification Mission in Guatemala and the National Human Rights Commission in Mexico. They represent new and diverse ways of providing accountability for human rights abuses. Accountability is also being furthered in a number of countries by assistance programs designed to help develop the administration of justice and the rule of law.

One of the most hopeful and innovative developments is the growing interest on the part of members of the business community in promoting human rights through their work. The example U.S. businesses set abroad and the codes of conduct adopted by an increasing number of multinationals effectively promote America’s values in the global community.

An example of the success and effectiveness of the Latin American human rights organizations has been the presentation in the last few years of Nobel Peace Prizes to two of their members, Adolfo Perez Esquivel of Argentina in 1980 and Rigoberta Menchu Tum of Guatemala in 1992.