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Latin America Growing Disillusioned with Free Markets, Democracy


Argentina's continuing economic crisis is just one more factor contributing to what appears to be a growing disillusionment in Latin America with the free market system, and even democracy. Many Latin Americans feel their lives have failed to improve materially under the democratic governments that more than a decade ago replaced the authoritarian regimes that governed many countries of the region.

Once a region dominated by military regimes, the countries of Latin America are all now democracies with the exception of Cuba. But disillusionment seems to be replacing the high hopes generated by the advent of democracy over the past decade and the adoption of free market policies in country after country.

In part, this is because poverty and inequality remain endemic in the region. According to the U.N. Economic Commission for Latin America and the Caribbean, 36 percent of the population in Latin America lives in poverty or 220 million people. The Commission says these figures have changed little over the past decade and are even slightly higher than in 1980, when 35 percent of the population was considered poor.

Another factor is economic crises affecting countries like Argentina, which a decade ago dismantled state-enterprises, lowered trade barriers and took other measures to open up its economy. These policies at first produced growth, but now Argentina is in the midst of a three-year recession and struggling to repay a huge foreign debt.

Latin American specialist Wolf Grabendorff of the German International Affairs Research Institute says disenchantment with democracy is growing because the euphoria and hopes were so high just a few years ago.

"It was democratization, liberalization, privatization and modernization of economic thinking, it all fell together, and it looked marvelous obviously after all that time," he says. "But nobody looked at the price that each of the countries would have to pay for modernization. And the problem with modernization is, as we know in Europe and learned it the hard way, is that you first have the costs, and then the benefits."

A newly-released survey by a Chilean polling firm reveals the extent of the disillusionment in the region. Latinobarometro, which has been carrying out an annual survey since 1995, finds that support for democracy has fallen dramatically over the past few years in the region from 60 percent five years ago to 48 percent today.

According to the survey, this decline was especially marked in countries like Argentina, Brazil, Colombia and Panama. In Brazil, just 30 percent of those questioned expressed unqualified support for democracy, compared to 50 percent in 1996.

Latinobarometro researcher Angelica Speich says the region's continuing economic problems are to blame.

"We attribute this decline to the economic crises affecting the region, and to the high expectations of the population, who believed that democracy would not only bring freedom and equality but also economic development," she says.

At the same time, there appears to be little support for returning to authoritarianism. The Latinobarometro survey shows relatively few Latin Americans would support one-party, authoritarian governments.

Yet the growing disenchantment with democracy and capitalism is having political repercussions. Anti-globalization protests are on the rise in countries like Brazil, where 40,000 anti-free market demonstrators marched in the Brazilian capital in June and where the head of the leftist Workers party, Luiz Inacio "Lula" da Silva now leads in the opinion polls for next year's presidential race. In Venezuela, President Hugo Chavez retains widespread support in part because of his constant denunciations of the failures of democracy and the free-market system.

Ambler Moss of the North-South Center in Miami believes populism and anti-globalization movements will continue to grow in the region, as long as governments fail to do more to alleviate poverty.

"I think this is going to happen unless there's some real deliverables, to bridge the poverty gap," he says. "I think the Hugo Chavez phenomenon that we see emanates from the fact that as most Venezuela would readily admit, 80 percent of the country was left in poverty even while the elites prospered and the country grew and oil prices rose. If that problem isn't addressed, we're going to see more populist rejection of globalization and of economic integration simply because it hasn't answered the needs of a growing mass of poor people who don't see any hope in it."

With an estimated one-third of Latin Americans still living in poverty, this will be an enormous challenge for the region's democracies. But it is a challenge they will have to meet if the democratic system of government is to survive and prosper in Latin America.