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Latin American Countries Discuss Mounting Economic Problems - 2002-07-26

Heads of ten Latin American governments are meeting in Ecuador to discuss the region's mounting economic problems, trade and security. The leaders are facing growing public discontent at home over their governments' economic policies.

More bad economic news is overshadowing the two-day summit in Guayaquil.

With more than 20 percent of its working population out of work, Argentina is experiencing the worst unemployment in its modern history. Brazil's real, the region's leading currency, has plunged to below three to the U.S. dollar.

Brazil's President Fernando Henrique Cardoso, speaking to the summit, blames the financial markets for destroying Latin America's economies.

But back home, the blame for the economic problems is being put on national leaders whose popularity ratings are plummeting.

Larry Birns from the Council on Hemispheric Affairs says many impoverished Latin Americans are protesting against their governments' free-market policies, while populist, off-mainstream politicians are gaining favor.

"There is a protest that a tiny economic segment of the population seem to be the beneficiaries of free trade," he said. "Almost half the population of the region remains below the poverty line, which all but guarantees the availability of cheap labor, which means that you can get export markets abroad. All of that is now boomeranging and you're getting a reaction where traditional politicians are being jeered and people who are coming forth with a different kind of message are being cheered."

Public disapproval is showing at the election polls and creating worrisome political instability. In a recent election in Bolivia, a coca farmer who opposes U.S.-backed coca eradication, forced a run-off vote in Congress. Evo Morales is expected to lose, but Michael Shifter from the think-tank Inter-American Dialogue says his popularity might indicate a regional trend.

"I think what we see now is just tremendous uncertainty and a kind of breaking apart of the political fabric of many countries and that is very troubling because I think it provides grounds for the emergence of different kinds of experiments, political experiments," he said. "They may be populist but they may be other experiments as well so I think that is of concern because it seemed for a while the region was moving in a particular direction and now there is a risk that sort of anything goes at this point."

While terrorism and regional security issues are also on the agenda at the summit, analysts say they are taking a back seat to tackling regional economic problems and coping with mounting political discontent.