Latin American countries are feeling abandoned by the US, which is focusing its attention on the “war on terror”.Cynics might be forgiven for suggesting that the only way Latin America would be taken seriously again by the US would be for a Latin version of Al Qaeda to raise its head.
As Mexico’s president Vicente Fox told The Banker last November: “9/11 changed the situation totally. The US government became 100% dedicated to terrorism and left us and Latin America a bit abandoned.’’
US secretary of state Colin Powell’s recent trip there was a sop of dubious value to the region. Thirty-six hours left little time for the least influential member of president George Bush’s foreign policy team to mend fences with Latin America.
Many countries in the region have followed the ‘Washington consensus’ to a great extent. They do not need Mr Powell to lecture them on the need for second-generation reforms, such as improving tax laws, pensions and regulatory systems, as he did at a conference in May, as though that would result in massive capital inflows.
And yet Latin America needs help. Mainly democratic governments are coping with unemployment at record levels, low commodity prices, forecast GDP growth of barely 2.4% this year (excluding Venezuela) after a two-year recession, and only a modest recovery in private capital flows from the record lows of 2002.
It was no surprise, then, when UN Security Council member Mexico expressed its opposition to the war in Iraq, despite its high level of dependence on the US. And new Argentine president Néstor Kirchner expressed the views of many in the region when he said there would be no “automatic alignment” with the US.
Practical measures are very welcome, like the June agreement between Banco de México and the US Federal Reserve for a new clearing house system that will allow Mexican immigrants to send money home cheaply. (In 2001, Mexicans paid more than $1bn to send money home with commissions as high as 20%, according to the US Treasury.)
But it will take more than just that to give Latin America a boost. It is time for US president George Bush to remember the region that has become his country’s forgotten partner.
