U.S. Policy Toward Latin America in the Post-Bush Era

1. U.S. Policy Toward Latin America in the Post-Bush Era By Mark Weisbrot Co-Director of the Center for Economic and Policy Research (CEPR) Tuesday, March 25, 2008

2. Causes of Latin America's Recent Distancing from the United States • Long Term Economic Failure Associated with Washington-Backed Reforms • Bush Administration's Attempt to Isolate Venezuela – Isolated Washington • Latin America Policy Based on “War on Drugs” and “War on Terror” • “Free Trade” Agreements

3. Latin America's Unprecedented Long-Term Growth Collapse Western Hemisphere: Total growth in per capita real GDP (Purchasing Power Parity)

4. “Neoliberal” or “Washington Consensus” Reforms • Reduced restrictions on international trade and financial flows • Tighter fiscal and monetary policies (higher real interest rates) • Privatization of state-owned enterprises • Labor market and public pension reforms • Abandonment of state-directed industrial policies or development strategies • Increased accumulation of foreign reserve holdings

5. South Korean Growth vs. Brazil 1960-2007 Brazil and Republic of Korea: Real GDP per capita (Purchasing Power Parity)

6. In the last decade, voters in Argentina, Bolivia, Brazil, Ecuador, Nicaragua, Uruguay, Venezuela all elected candidates who ran against “Neo-liberalism”

7. Washington doesn't recognize failure,pushes more “Free Trade” Agreements with less and less success

8. Bush Administration Supports Military Coup in Venezuela and Subsequent Destabilization Efforts • State Department funds people and organizations involved in coup • White House and State Department lie about events in attempt to support coup • Bush Administration supports further efforts against Chavez government (e.g. oil strike)

9. Result: Deep Rift Between Venezuela and Washington; Relations with Rest of Region also Cool • Brazil, Argentina, Ecuador, Bolivia and other countries support Venezuela against Bush • Latest example: Colombia Incursion into Ecuador, condemned by all except Washington • Many other examples

10. Give up on NAFTA-type agreements Acknowledge that there are different paths to growth and development Respect national sovereignty in Latin America Normalize relations with Venezuela Cease support and funding for opposition (white separatist) movements in Bolivia, opposition in Venezuela Q: What Would a New Latin America Policy Look Like? (Continued, next slide)

11. Q: What Would a New Latin America Policy Look Like? • Support negotiated solution to Colombian conflict • Abandon failed supply-side approach to “war on drugs” • Normalize relations with Cuba • Co-operate with efforts at regional economic integration (as in Europe)