The Mission of the Manhattan Institute is
to develop and disseminate new ideas that
foster greater economic choice and
individual responsibility.

The New York Sun.

Leaders vs. Loonies
March 15, 2007


President Bush's visit to Latin America this week highlighted the growing divide in the region: not between left and right, but between serious, responsible leaders and Latin loonies.

The chief loon is, of course, Venezuela's president, Hugo Chavez. While President Bush was visiting Uruguay, Mr. Chavez led an anti-American rally at a soccer stadium in nearby Buenos Aires. Argentina's president, Nestor Kirchner, who is now totally dependent on Chavez's petrodollars to keep his government afloat, bused in his piqueteros, paid protesters, and Mr. Chavez regaled them with his anti-Bush gems.

Some Latin American commentators remarked how Mr. Chavez's antics sharply contrasted with the productive meetings that Mr. Bush conducted with the leaders of Brazil, Uruguay, Colombia, Guatemala, and Mexico.

In Brazil, the world leader in the production of efficient sugar-cane-derived ethanol, an important energy partnership was forged to further ethanol production and to set standards so it can be traded like a commodity and compete with oil on the open market. This agreement could create hundreds of thousands of desperately needed jobs in Brazil.

In the other countries, progress was made regarding trade, development, and security. Mr. Bush also announced important new foreign-aid initiatives in education, health care, and housing.

There has been much talk of Latin America's "leftward shift" lately, but the reality is more complicated. Some leaders with whom Mr. Bush met, such as Brazil's president, Luiz Inacio "Lula" da Silva and Uruguay's Tabare Vazquez, are on the left, but their outlook is like Europe's social democracy, not Mr. Chavez's authoritarian Marxism. They would rather improve life for their citizens than engage in anti-Americanism.

Mr. Chavez's attempts to influence other countries have soured relations with Brazil, Uruguay, and many other Latin American nations. For example, he encouraged his puppet in Bolivia, Evo Morales, to nationalize his country's natural-gas resources last year. This did not sit well with the Brazilian energy firm Petrobas, which had spent billions of dollars to develop the fields.

His meddling has led to a backlash in places, with Chavez-endorsed political candidates losing in the Colombian, Peruvian, and Mexican presidential elections last year, although Chavistas posted victories in Ecuador and Nicaragua. In Argentina, the minister of finance, Roberto Lavanga, resigned over the government's increasingly strong ties to Mr. Chavez and its "anti-business" policies and announced he will run for president later this year.

Mr. Chavez has a lot of oil money to throw around, and Latin American leaders will cozy up to him when it serves their political or economic ends. Nevertheless, foreign-policy pundits need to keep Mr. Chavez in perspective. The combined gross domestic product of Venezuela, Argentina, Bolivia, Nicaragua, Ecuador, and Cuba—all the countries that are, more or less, Chavez allies — is still far less than the GDP of Florida.

Mr. Chavez is not even that popular. The Chilean organization, Latinbarometro, conducts an annual survey of citizens in 18 Latin American countries and ranks leaders in the Americas according to their popularity. Last year, Brazil's Lula, Chile's Michelle Bachelet, and Colombia's Alvaro Uribe were at the top of the list. Mr. Chavez and Fidel Castro were at the bottom. The same survey showed that the vast majority of Latin Americans favor market economies and democracy.

Traditional political labels are increasingly irrelevant in Latin America. For example, Chile's "socialist" President Bachelet is to the right of the Democratic Party on most issues. She has repeatedly emphasized her commitment to the Chilean pro-market, free-trade economic model that has generated 6% annual GDP growth over the past two decades and cut poverty in half.

Ms. Bachelet could prove to be a real asset in the region by pulling other left-leaning leaders back toward the center. "Let's admit it, comrades, modernity and globalization are not an imperialist invention. They are realities and it is up to us to turn them into opportunities," Ms. Bachelet recently told an international gathering of Socialist Party leaders.

America could play a more constructive role in the region. Congress needs to ratify the free-trade agreements that the Bush administration has signed with Peru, Colombia, and Panama. Not doing so would be a slap in the face to three of our strongest allies and greatly damage our reputation in the region.

We must also lower the agricultural tariffs and subsidies that stymie growth and make us look like free-trade hypocrites to many in Latin America — especially the 54-cent-a-gallon tariff on Brazil's sugar-derived ethanol. Taking these actions would be good not only for Latin America but also for us.

Newly released figures by the Commerce Department show that American exports to Mexico and Chile have gone up by 223% and 88%, respectively, since free-trade pacts were signed with those countries in 1993 and 2004.

Free trade also lowers prices for American consumers. Moreover, if Latin American nations can get their economies growing, it would alleviate much of the illegal-immigration pressure that America faces and create vast new markets for our goods and services.

America should ignore Mr. Chavez's taunts and not give him the attention that he craves.

Instead, we should do exactly what President Bush did on his trip this week: quietly find constructive ways to work with the serious, responsible leaders of Latin America who want to improve the lives of their citizens and foster better relations with their big brother in El Norte.

Charles Sahm directs the Manhattan Institute's Latin American Initiative and writes for the institute's City Journal.

©2007 The New York Sun


Home | About MI | Scholars | Publications | Books | Links | Contact MI
City Journal | CAU | CCI | CEPE | CLP | CMP | CRD | ECNY
Thank you for visiting us.
To receive a General Information Packet, please email
and include your name and address in your e-mail message.
Copyright © 2009 Manhattan Institute for Policy Research, Inc. All rights reserved.
52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494