Paths to Prosperity in Latin America
Bolivia’s interventionist model has given it one of the most robust economies and political structures in Latin America
Current economic structures between Latin America and northern states represent postcolonial holdovers
Multilateralism is essential for solving climate change, nuclear militarization, and rising social inequality
Latin American states must seek a balance between strong market regulations and allowing the free market to create wealth
There is little room for optimism for more constructive US-Latin American relations or Latin American integration
On April 11, the UN Initiative held an expert panel on Paths to Prosperity in Latin America. In attendance were Professor Pablo Querubin Borrero, Associate Professor of Politics and Economics at NYU; Sacha Llorenti Soliz, Permanent Representative of Bolivia at the UN; Jorge Chediek, director of the United Nations Office for South-South Cooperation and Special Envoy of the Secretary-General on South-South Cooperation. The UNOSSC, established in 1974 by the United Nations General Assembly, facilitates economic and diplomatic connections between emerging nations of the southern hemisphere.
A potential model for progress in Latin America is Bolivia. Formerly one of the poorest states in South America, it now boasts one of the most stable economies and political systems in the region. As laid out in a short presentation by Soliz, Bolivia now holds the highest investment rate, one of the lowest inflation rates, and the most international reserves in Latin America. Bolivia also claims a significantly low gender pay gap, currently ranked 17th place globally. Over half its government representatives are women. Soliz attributes this to government policies which claimed state ownership of natural resources, specifically hydrocarbon, and bold political leadership in 2005.
The first question asked of the panel dealt with dependency theory, the notion that poorer nations provide raw materials and cheap labor to developed nations which reap most of the benefits of the process. To Querubin, the theory, while important, holds some problematic implications. Protectionist policies instituted by some of the region’s states fall short of alleviating the process; Querubin recommends an export-led model instead. To Chediek, the current system represents economic holdovers from imperialism. Soliz believes that such post-colonial relationships prevent economic development for the former colonies.
None of the panelists believe post-colonial relationships must decompose entirely. All three agreed that the modern challenges of climate change, nuclear militarization, and rising global inequality may only be corrected through multilateralism. Chediek noted that 52 people own more wealth than the bottom half of the global population — an insurmountable problem for any country. Soliz said the current U.S. government has contributed to the delegitimization of the United Nations and other important supranational organizations.
Querubin said politics in Latin America has become hyper personalized, making it difficult for any political movement to outlive their main figures. One of the negative symptoms of this is the elimination of term limits in many of the region’s democracies. But Soliz disagreed with Querubin, claiming that its important for nations to be able to democratically re-elect leaders they see fit to serve.
Bolivia’s economy grew through government intervention, while Uruguay has grown through foreign investment for its agricultural exports. The panelists agreed that political stability played a substantial role behind the success of these countries. Soliz noted that political instability halts economic growth and encourages inequality. Chediek said the market is the best creator of wealth, and no Latin American state has perfected the balance between regulating the market and creating wealth. However, Bolivia may have the best formula to date.
The panelists were finally asked about U.S. involvement in Latin America and the potential for future Latin American integration. All panelists agreed that there is little room for optimism for future Latin American integration.
Querubin said he is baffled by the lack of American interest in strategic relations with Latin America except when it comes to fighting the drug trade, adding that he has no optimism for more constructive relations with the United States. Soliz claimed that the further from U.S. influence a nation is, the better.
This report was compiled by Danny Hegberg on April 19, 2019 and edited by Jamin Chen.