Obstacles to Democratic Consolidation
A visible example of this shortsightedness is the tendency of U.S. policymakers to equate elections with democracy. Elections are, of course, a necessary and important component of democratic systems. But elections alone do not ensure that citizens have effective input and influence over important decisions and policies that affect their lives. In many Latin American countries, authoritarian traditions, corrupt and elite-dominated political parties, and nascent electoral systems combine to limit both the content and consequence of electoral choice. Weak or nonexistent mechanisms for civil society to debate policies and to engage with elected officials in an ongoing fashion exacerbate the problem. International financial institutions (IFIs) send a conflicting message about democracy when, while promoting electoral reforms to ensure broader political participation and hence the legitimacy of elected leaders, they insist that the economic policies of developing countries adhere to a uniform model not subject to domestic debate.

To date, Latin American governments have proven unable to confront the unprecedented levels of crime across the region and the corresponding rise in fear for personal safety, often resulting in popular support for militarized solutions to the public security crisis. (In fact, the Latin America/ Caribbean area has the dubious distinction of being the most violent region in the world.) High unemployment, massive poverty, and growing inequality are all contributing to the crime wave, and local police forces are often perceived as part of the problem—through their participation in organized crime, gangs, and routine bribery—rather than part of the solution. More often than not, judiciaries function only for those with money to grease the wheels of the bureaucracy. Public opinion surveys suggest that only a tiny minority of Latin Americans have any confidence that their police and judicial systems are adequate to the challenge.

Although the overall record regarding human rights has improved remarkably in much of Latin America, the patterns of behavior that lead to abuses are far from eradicated. Throughout the region, impunity remains the norm for those who continue to commit human rights violations, and those seeking truth and justice often face political obstacles and personal threats. This was vividly illustrated in the horrific murder on April 26, 1998, of Msr. Juan Gerardi, Auxiliary Bishop of Guatemala and director of the Guatemala Nunca Más project, an effort initiated by the Guatemalan bishops to document abuses by all sides in the Guatemalan conflict. Msr. Gerardi was killed just two days after the release of the final report. Violence over land rights and natural resources continues to erupt in countries such as Brazil and Ecuador. Civil conflict rages in Colombia, where guerrillas battle government forces and powerful right-wing paramilitary groups, resulting in levels of political violence and human rights abuses comparable to (if not worse than) those that ravaged the region in previous decades. In 1997 alone in Colombia, there were at least 185 politically motivated massacres (defined as the killing of four or more individuals), taking the lives of 1,042 people. Over the last decade, between three and four thousand Colombians have lost their lives each year as a result of political violence.

In Mexico, the brutal massacre of 45 indigenous peasants in the town of Acteal in the Chiapas region in December 1997 brought international attention to the ongoing human rights violations stemming from efforts to suppress the Zapatista National Liberation Army. The conflict in Mexico starkly reveals the failings of a political system where state largess can no longer buy political loyalty and stability. As was the case in the Central American conflicts of the previous decades, at the root of the struggles taking place in Colombia and Mexico are undemocratic political systems that have failed to allow for meaningful political participation or to remedy the imbalances between the haves and the have-nots.

Income Disparities
Remain Unaddressed
Poverty, lack of access to land and resources, and tremendous income disparities remain fundamental problems that have yet to be addressed adequately throughout the region. According to the UN Economic Commission for Latin America and the Caribbean (CEPAL), during the first half of this decade the proportion of the population living in poverty has decreased slightly (from 41 percent in 1990 to 39 percent in 1995); however, the number of people living in poverty has increased significantly due to population growth. Some 75 million more people live in poverty today in the region than in 1980. The Latin American region continues to have the highest level of income inequality in the world, a situation that has seen virtually no improvement in most countries and has deteriorated even further in some. Despite average annual growth rates of 3.2 percent since 1990, the richest 10 percent of households maintained or increased income levels, while the poorest 40 percent held steady or experienced decreased income. In other words, the modest and even, in some cases, exceptional economic growth rates of the 1990s have not led either to fewer people living in poverty or to a more equitable distribution of income.

Nor has economic growth resulted in stability, as evident in the economic crises in Mexico in 1994 and Brazil in 1998, both leading to billion-dollar bailout packages. Illustrative of the fragility of the region’s economy, in Mexico investor flight led to near-economic collapse as nervous investors, able to move millions with a click on the keyboard, pulled out capital overnight, thereby revealing the fragility of economies built on short-term, high-yield investments rather than long-term investments in infrastructure and industry. The tendency toward speculative investment means that more jobs are lost than created in countries like Mexico, where nearly 2 million jobs have been lost (even taking into account employment in the maquiladora sector) since the North American Free Trade Agreement (NAFTA) went into effect. Despite decades of free-market and structural adjustment policies, high unemployment and widespread underemployment—and hence pervasive poverty—remain rampant in the region.

Brazil’s economic crisis has already hit Argentina and threatens to spill over into other parts of the region, and will likely stifle growth rates for 1999 and beyond. The response of the International Monetary Fund (IMF), calling for more belt-tightening by the Brazilian government in order to restore investor confidence, will exacerbate poverty even further – particularly in rural regions of the country long neglected by the central government. The sharp price increases resulting from the IMF “remedy” affect everyone, but have hurt the poor the most.

Even World Bank and other IFI officials now recognize that the focus on market-driven economic growth alone is unlikely to reduce poverty and lead to greater equality. Both the World Bank and the Inter-American Development Bank are engaged in a range of projects designed to strengthen local institutions, build human capital, and improve education. Yet as a result of the mandatory fiscal restraint required by the IFIs, local governments have vastly fewer resources to invest in development programs than in the past, and U.S. development assistance has dropped to an all-time low. IFI-supported safety net programs may be too little too late, because they ignore the structural causes of poverty and underdevelopment. Economic power remains in the hands of traditional and new elites, who have been the main beneficiaries of reforms. For them, “globalization” has meant the opportunity to invest capital wherever in the world it can bring the greatest return at the least risk.

Hurricanes and
Short-Sighted Policies
Hurricane Mitch, which devastated Central America in November 1998, marks a shift toward much greater poverty in the countries affected, particularly among the rural poor. It left millions homeless, damaged already-limited rural infrastructure, and destroyed both grains and export crops. The United Nations Development Program estimates reconstruction costs at more than $5.3 billion. Some of the damage was the result of the most fierce meteorological event to strike the isthmus in 200 years. But it is also clear that the destruction was made that much more catastrophic by short-sighted agricultural policies. National governments and the IFIs have failed to formulate and fund policies that support sustainable rural development. Destructive practices—including clear-cut logging, hillside farming, and degradation of topsoil by over-cultivation of marginal land—exacerbated the mudslides and flooding caused by the torrential rains. The Clinton administration’s 1999 package of nearly $1 billion for debt relief and long-term reconstruction programs for the Central American countries hit hardest by Hurricane Mitch (and to a lesser extent to address hurricane and earthquake damage in Haiti, Puerto Rico, and Colombia) is an important step forward. But too much of this aid is being channeled through the U.S. military, and the debt-relief measures fall far short of what is needed. Central American countries also need new U.S. trade policies that ease restrictions on regional exports and development policies that prioritize the poor, focus on rural development and sustainability, and allow for the involvement of civil society organizations in their design and implementation.

The U.S. aid package to Central America represents the first significant infusion of economic assistance to the region in more than a decade. Dwindling U.S. foreign aid has increased the importance of direct foreign investment and IFI loans in the provision of foreign capital to Latin America and the Caribbean. Nonetheless, Washington remains the most important external actor because of the markets and investment that the United States represents and also in part because of the influence its wields within the IFIs. In addition to the traditional U.S. hegemony in the region, U.S. economic interests have expanded as “globalization” trends have taken hold. U.S. exports to Latin America and the Caribbean have tripled in the last ten years to the point where almost half of all U.S. exports to developing countries go to the Latin American region; within ten years Latin America is expected to be the primary market for U.S. products and services. Mexico now rivals Japan as the second largest U.S. trading partner. Goods purchased from the United States represent more than forty percent of all imports by countries in Latin America and the Caribbean, and nearly 60 percent of all foreign investment in the region comes from the United States. The hemisphere is well on its way toward economic integration, with or without "fast track."

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