Review of Saving the Americas: The Dangerous Decline of Latin America and What The U.S. Must Do

Saving the Americas: The Dangerous Decline of Latin America and What The U.S. Must Doby Andres Oppenheimer’s books is so masterful a work of investigation into issues of economic, political and social innovation in the context of globalization that I’m now interested in familiarizing myself with the rest of his published work.

The thesis of this book is that while many other parts of the world – such as Ireland, Asia, India – have been able to successfully adjust themselves to the new technological and economic imperatives created by globalization, Latin America has lagged behind. It’s not that the political and economic leaderships within LatAm haven’t felt the need for change – they face declining prices for commodities, rising costs for foreign goods and services, and difficulty gaining anything close to the amount of foreign capital received by the “winners” in the globalization – it’s that they seem stuck in a haughty provincialist populism that is inherently suspicious of anything that they think may harm their sovereignty, be they bi- or multi-national economic agreements or changes to social welfare policies that were barely sustainable when they were first passed and are now burdens that hangs on government expenditure like it was an albatross.

Given the access to politicians and businessmen his role as journalist provides him, Oppenheimer is also able to provide a human context to the trade agreements and international diplomacy in a compassionate manner that allows the reader to see how the personality quirks and worldviews of leaders can have a tremendous impact on the manner in which they get resolved. This perspective is not limited to the Latin American leaders, but also within the United States. The description of the pre-9/11 leadership presents the U.S. government as largely aloof towards all of Latin America and the Caribbean, with the exception of Haiti and Colombia, despite Brazil’s economic might and the possibility for mutually-beneficial economic development. Given Chavez’s disdain for Bush due to the invasion of Iraq and Afghanistan and the latter’s apparent readiness to create new partnerships in Latin America, it’s interesting to wonder what would have transpired between them had the terrorist attack not occurred.

The Opening to Capitalism on America’s Nautical Borders

Oppenheimer opens his book on Latin American by examining a number of Asian and European globalizatio success stories. These are the foils to the case studies of Argentina, Brazil, Venezuela, and Mexico which, in his assessment, have not been able to reach the special “sweet spot” that leads to annual rates of growth higher than 5%.

His assessment of Latin American is not good, and shows how their social and economic policies have not kept pace with the needed changes in a manner sufficient enough to create the high annual growth of their competitors.

Argentina

The portrait Oppenheimer presents of Kirchner as the leader of a nation is not at all flattering, but neither does he receive the type of dismissiveness that Hugo Chavez and Fidel Castro receives. In light of his leadership abilities, he is presented almost as a tragic figure in nation which constantly cycles between political extremes. Kirchner, for example, is described as canceling the FTAA negotiations with the United States out of purely personal reasons and breaking schedules talks with other presidents out of antipathy.

Given this description of leadership, Oppenheimer’s description of Kirchner and his supporters as suffering from Maradona Syndrome is apt. Kirchner’s “K Style” may have done much to bolster their emotional needs, but from a practical standpoint it was a failure.

Venezuela

Oppenheimer describes Chavez’s rule as that of a narcissist-Leninist revolution. The image of his arriving to a trade conference in a private jet that he paid millions over cost with a huge entourage of lackey’s was compelling evidence in lights of this. The irregular hours he worked, his lack of self-management skills, the poor manner in which he treats his subordinates, his inability to plan at a macro-economic level and his inability to think deeply on a number of important issues – a claim made by his former mentor and host for several years following his release from prison – are just some of the reasons that helps explain how the economy in Venezuela, once the strongest in the region, became ruined.

Mexico

It is a type of political paralysis which seems to prevent Mexico from getting over the hump needed to achieve a level of dynamism and innovation within their economy. The multi-party system inhibits the enactment of progressive change as there are always those that want to see someone and their policies fail.

Given AMLO is now the president of Mexico, I found the extended background on him to be very interesting. While clearly a passionate politician able to mobilize a large support based – the picture presented does not inspire the sort of confidence required in the age of globalization.

Oppenheimer’s analysis of UNAM – the Autonomous University of Mexico was for me – a former professor and someone that takes professionalization standards seriously – quite shocking. That there are schools within this university – such as the social and political sciences – that categorically refuse to engage with accreditation organizations or professional review boards would be amusing as an example of hubris were it not for the fact that it’s so sad that so much money is wasted as Mexico – unlike Communist China – subsidizes it’s students. Perhaps this is why UNAM students are described as needing more years to graduate college than other countries. More than that, the country is not preparing their population neither for the needs of the knowledge economy NOR for that of the industries which provide high wages – the university graduates 15 times as many therapists as petroleum engineers.

Latin America

One of Oppenheimer’s recurring pieces of advice, which is echoed by his numerous interlocutors involved in the institutional bodies being described, are the benefits of supranational bodies in assisting with political and economic policies. In the populist rhetoric of Latin America this is viewed as the giving up of sovereignty, a preciously valued concept for el pueblo – but the fact that those that have done this are those within the opening success stories seems to be a fact lost on Nationalists and Bolivarians alike.

Regional agreements, such as MercoSur, are agreed upon but according to conditions that removes the capacity to lead to dynamic economic growth. Political support is to be found between nations, but it’s not to reinforce stability and to ensure the rule of law but done by Chavez in order to create pockets of politicians dependent on his largesse and good intentions – which he does not have.

In short, while trade agreements may change – the knowledge economy is now recognized as one of the primary drivers for economic growth and the Latin American focus on the past isn’t helping it have a clear vision for the future. In a geopolitical context where those able to demonstrate their capacity to add value to companies through their knowledge will flee to countries that value such skills, modern governments need to both help create more of such people and provide incentives to stay and apply themselves within their nation of birth. Access to resources and low wages are no longer sufficient – but are sometimes seen as a reason to avoid foreign investment. After all, if you wanted to invest in a research park or a factory that required a large number of complex, technical tasks to complete, where would you invest: Finland, which has 5,000 scientists per million people, or Argentina – with only 712, or Chile with 370 or Mexico, with 225. Given the trajectory of Revolution 4.0, Latin America – they face the choice of rapidly playing catch up or seeing themselves unable to do anything other than provide primary goods or produce light-manufacturing.