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Latin America Still Faces Many Economic, Political Challenges - 2003-12-24

This story is part of VOA's 2003 in Review series

In Latin America, 2003 was a year of slow economic growth and signs that populist political leaders could be making a return. The economies of regional nations are expected to improve in the year ahead, but political conflicts could detain progress.

All politics are local, a U.S. politician once said, and that has held true for Latin American nations even though it is the process of economic globalization that shapes many of the issues confronting them. Political leaders in the region have had to walk a fine line between satisfying the demands of international financial institutions and the needs of their own people.

In Argentina, newly elected President Nestor Kirchner has gained huge popularity by defying the International Monetary Fund and putting economic recovery ahead of debt obligations. He says things are bad in Argentina, but that the time has come to restore the nation's self esteem and show everyone that the country still has some of the best industries in the world.

Argentina has been trying to recover from a financial crisis that began over a year ago when the nation defaulted on $132 billion in debt. Mr. Kirchner will continue in the year ahead to seek a balance between placating international financial institutions and the demands of his own people.

Meanwhile, in Brazil, the government of President Luiz Inacio Lula da Silva, a populist of long-standing, has spent his first months in office pushing for tax reform and other measures to boost the economy. The man who came to political prominence as a firebrand union leader and leftist politician has taken a cautious, moderate path as president.

Elsewhere, however, the clash between liberalization and the opposition to globalization increased in intensity.

In Bolivia in October, a massive strike led by indigenous groups led to the ouster of President Gonzalo Sanchez de Lozada. At issue was a natural gas pipeline that would have greatly benefited Bolivia's economy, but would have involved construction in some indigenous areas. Leaders of the protest described their movement as a continuation of the struggle of indigenous people against the European conquest that began nearly 500 years ago.

Such rhetoric finds an echo here in Mexico, where the Zapatista rebels remain ensconced in the jungles of the southern state of Chiapas. The Zapatistas have provided a rallying point for many Mexicans who oppose liberal reforms and free trade policies.

Many of the people who marched in protest against the World Trade Organization at its meeting in the resort city of Cancun in September carried Zapatista banners. The collapse of the organization's meeting amid protests underscored the tensions and disagreements the free trade movement has spawned.

A far different view of this conflict can be seen in the two northernmost nations of South America, Venezuela and Colombia. One is beset by a political crisis brought on by populist policies and the other is crippled by a civil war that continues to take lives and dampen economic progress.

In Venezuela, opponents of President Hugo Chavez recently succeeded in collecting more than three million signatures on a petition aimed at removing him from office. Mr. Chavez, who survived a coup d'etat in April 2002, and a nationwide strike a year ago, has remained defiant.

He continues to call his opponents "golpistas," which is roughly translated from Spanish as "coup mongers." He says his populist government is supported by Venezuela's vast population of poor people and that his opponents represent the rich oligarchy. Opponents, however, say he is anti-democratic and they accuse him of trying to establish a Cuban-style communist system in Venezuela.

The past year has been relatively quiet in Venezuela, but the prospect of a special election next year is likely to produce more strife.

Meanwhile, next door in Colombia, President Alvaro Uribe continues his efforts to move his country forward in spite of violent conflict. In a recent address to the United Nations General Assembly, President Uribe defended a new law that would allow insurgents to re-enter society without facing prosecution if they lay down their arms. Some right-wing paramilitary groups have already responded to this offer.

This, and a recent offer to hold peace talks with one rebel group, represents a flexible approach by a president who came to office a little more than a year ago by promising a tough approach with Colombia's various guerrilla groups.

In spite of the conflict, President Uribe can boast of progress on the economic front. The nation's economic output grew by 4.7 percent in the most recent quarter, more than double what it was a year earlier. Although Colombia has an $80 billion economy, much of the country and its economy remain outside government control. Leftist rebels, in particular, continue to thrive on profits from the illicit drug trade, which combined U.S. and Colombian government efforts have failed to stop.