What Is Wrong with Latin America?
Distinguished Miami Herald
reporter, Andres Oppenheimer, looks at the stagnant economic growth in Latin America and wonders why there is no growing
prosperity. In his travels, he has
spoken to presidents of many countries and examined political, cultural and
economic backgrounds of successful countries – China,
Ireland, Poland, Greece,
Portugal, Taiwan, Hong Kong,
South Korea, and Singapore . He
reminds me of Adam Smith’s Wealth of Nations in his examination of what
conditions lead to wealth creation. When
I studied economic development in the late 1960s and early 1970s at the University of Texas
at Austin, I
found lots of theories. Some economists
looked at psychological and cultural impediments. Mr. Oppenheimer and others debunk the
dependency theory – which the wealthy nations conspire to keep the poor
His book, Saving the Americas:
The Dangerous Decline of Latin America and What the
Must Do, is a collection of unvarnished criticism and solutions. He gossips unfavorably traits about some
Latin American presidents in a tabloid fashion that few do. But the stories are not mere gossip. They reflect serious underlying difficulties with particular
presidents and their current political frameworks.
My difficulties are with what Mr.
Oppenheimer does not mention: global warming, the U.S. war on drugs, blatant political and military intervention in Latin
Mr. Oppenheimer presents his case
that Latin America is stagnant, violent, and
that under current patterns will become even more marginal in world affairs,
that economic prosperity is achieved by investments in education and technology
and participating in international trade agreements.
Futurology studies show Latin America as a marginal area on the world’s economic
America has 7.6% of the world’s gross product and 4.1% of its
trade. It has the highest homicide rate
in the world with about two and a half million private security guards in the
While negotiating with the rich
countries to lower agricultural subsidies to their farmers, Mr. Oppenheimer
thinks it is more worthwhile to pursue production of high value added products
and gives plenty of examples of that happening in poor countries. The multinational Wipro Ltd. of India
began its business selling cooking oil and became one of the world’s largest
software companies. For a $3 cup of
coffee at Starbuck’s, the farmer gets 3%.
Some say it is 1%. There is no
future in growing coffee.
America’s economy is heavily dependent of raw materials
exports. The prices of raw materials
plummeted by 80% in the 20th century. In 1960, raw materials made up 30% of the
world’s gross product. In 2007, they
represented just 4%.
There are countries with
relatively high standards of living that have few or virtually no natural
resources – China (for a lot
of the people), Ireland, Poland, the Czech
Greece, Liechtenstein, Singapore,
Taiwan, Israel and Hong Kong.
After the Second World War,
European countries were fearful of what would happen if they had to give up
their colonies. Newspapers were filled
with predictions of a lower living standard.
There was a lot of restructuring but they managed to live in prosperity
without those colonies.
What is happening now is a sloppy
energy use. The United States uses three times as much energy per item produced as the
Japanese. China uses nine
times as much energy per unit as the Japanese. Both American and the Chinese economies are
America has mediocre universities.
Times Higher Education Supplement ranked the world’s top 200 universities in
2004. Only one Latin American university
made the list, National Autonomous University of Mexico (UNAM), ranked 195th,
nearly the bottom. Mr. Oppenheimer states that the UNAM of Mexico and the University of Buenos Aires “are both sacred cows in
their countries that few dare to criticize, even though they are monuments to
inefficiency and underdevelopment.”
America as a region spends less money on education than most other
places and what they spend, they spend badly.
of Buenos Aires, Mr.
Oppenheimer’s alma mater, produces 2,400 lawyers and 1,300 psychologists each
year, compared with only 240 engineers and 173 graduates with degrees in
agriculture and livestock sciences.
The gossipy stories about some presidents
are interesting reveal the limited vision in Argentine and Venezuelan political
president Nestor Kirchner likes to stand people up from long held appointments
because he want s to show who is boss and that Argentina is a country to be
reckoned with. He stood up Russia’s President Putin in Prague and failed to show up at a major
conference sponsored by the Miami Herald.
He was born, raised and later governor of Patagonia
for 12 years. He displays the localism coming
from an isolated beautiful area oil-producing province of 200,000. Before becoming president, he practically
never travelled abroad. He speaks no
foreign language and shows little interest in the rest of the world. In a move that the Clinton family would like to imitate, his
wife is now the president
For Mr. Oppenheimer, there is
plenty wrong with President Hugo Chavez. Mr. Chavez’s model is Simon Bolivar,
the country’s liberator from the Spanish.
Venezuela is now the Bolivarian Republic
of Venezuela. Since Venezuela’s difficulties have
nothing to do with foreign occupation, the president could choose symbolism of
education and technology along with social justice. For my part, the appeal to military models is
troubling when the world needs peacemakers who can resolve disputes by
diplomacy, commerce, technology, education and embrace social and environmental
justice. Most Americans, after five
years of war, realize that aircraft carriers, fighter planes, tanks and rifles
will not protect us from global warming or environmental degradation
The reader would not know from
reading this book that the Intergovernmental Panel on Climate Change has called
for an 80% decrease in carbon dioxide emissions. If the rich countries continue their current
path or if China and India
pursue their plans to build coal fired power plants, the human race and the
world’s living beings are doomed. The
world is going through its Sixth Great Extinction. The book criticizes the Bush
administration for plenty but not for its environmental destruction. Mr. Oppenheimer makes no reference to the
destruction of the Amazon rainforest or multinational companies’ actions in their
oil explorations pollution of surrounding areas.
Mr. Oppenheimer comes across as
fostering free trade agreements without reservations in the same way that
Thomas Friedman of the New York Times and free trade fundamentalists do. The fact of the matter is that other people
than left wing populist criticize unrestricted globalization as helping the
rich and the multinational corporations.
One example is Nobel Prize winner and former chief economist and senior
vice-president of the World Bank, Joseph Stiglitz.
See his book, Making Globalization Work, for remedies that bring more
social justice. The
successful countries that Mr. Oppenheimer praises all adopted globalization and
trade agreements under their own terms, heavily regulating and monitoring
There is an approach to trade and
capital market liberation known as the “Washington Consensus” forged among the
International Monetary Fund (on 19th
Street), the World Bank (on 18th Street) and The U.S.
Treasury (on 15th
Street). This consensus emphasizes downscaling of
government, deregulation, rapid liberalization and privatization. When people like me want human rights, the
environment, working conditions as part of the trade negotiations, we are
considered protectionists. Countries
like Russia and Argentina who
followed this path soon regretted their decisions.
Mr. Oppenheimer debunks the
dependency theory. Since the United States has actively participated in democratically
elected governments’ overthrow such as in Guatemala,
Iran, Chile and Nicaragua, I take the theory
seriously. I see our military
interventions in the Dominican Republic,
Panama and Grenada. Since our Central Intelligence Agency
actively worked to overthrow the Indonesian government in 1965, resulting in
the massacre of 500,000 people, there is no allegation about our government
that I would automatically reject. John
Perkins, author of bestseller Confessions of an Economic Hitman,
is credible. Mr. Perkins as a consultant
for the World Bank deliberately inflated the returns of proposed projects in
poor countries to get the countries into a state of debt peonage and compliance
with the American foreign policy objectives.
Mr. Oppenheimer omits coverage of
world-wide poverty reduction efforts.
When Gordon Brown was Exchequer of Great Britain, he advocated a second
Marshall Plan for the world’s poor. See
the Global Marshall Plan web
for more. Such poverty reduction would
help deal with terrorism be reducing economic inequalities. Those concerned about illegal immigrants
crashing the gates of the United
States and the European Union should support
such a plan. If people have decent jobs
at home, few would bother with hardships and extortions involved in entering a
Mr. Oppenheimer makes no
reference to the American war on drugs.
Rich countries are make a lot of poor people
even more miserable and some governments less able to control events in their
own countries. Since I can see no significant
distinction between t Prohibition and today’s war on drugs, I see it as well
past time we legalize drugs in some way.
For anyone who thinks that our current efforts are doing any good, I
refer them to the Drug War Facts web
site (www.drugwarfacts.org). Organized crime will not go away but seek
less lucrative activities.
Next to last, I hope in future
editions that the publishers take time to prepare an index to make life easier
for reviewers like me.
All in all, Saving the
Americas is a fine book with some blind spots that can be addressed in
future editions. The criticisms that Mr.
Oppenheimer makes take courage. Many
reporters and authors shy away from controversial commentary that could easily
make future sources dry up.
Ed O’Rourke has a master’s degree in Latin American Studies
from the University of Texas at Austin.
First written in Spanish:
Andres Oppenheimer, Cuentos
Chinos: El engano de Washington, la mentira populista, y la esperanza de America Latina (Tall Tales: Washington’s
Deceit, the Populist Lie and Latin America’s
Hope), Editorial Sudamericana, 350 pages.
Later translated into English:
Andres Oppenheimer, Saving The
Americas: The Dangerous Decline of Latin America and What the
U.S. Must Do, Random House Mandadori, 2007, 387