Experts try to determine ‘what’s going on in Latin America’

Experts try to determine ‘what’s going on in Latin America’

BY B.J. ALMOND
Rice News Staff

“The gap
between the ‘fast caste’ and the large number
of Latin Americans mired in poverty has been growing,”
Abraham Lowenthal told participants in this year’s
Americas Project conference at Rice’s James A. Baker
III Institute for Public Policy.

Although business
and trade in Latin America have benefited from liberal economic
reforms during the past several years, more and more people
live under the poverty line, said Lowenthal, professor of
international relations at the University of Southern California
and president of the Pacific Council on International Policy,
an independent leadership forum.

He moderated
a panel discussion Oct. 2 on “The Roles of Government,
Private Sector and Non-governmental Organizations.” The panel of experts shared their expertise with the 20
fellows attending the Americas Project, a leadership forum
for discussion of the challenges confronting nations in
the Western Hemisphere.

Panelist David
Brown, Rice assistant professor of political science, said
it’s not clear whether neoliberal economic policies
are hurting Latin America. “It depends on which groups
you’re talking about and which factors you’re
looking at,” he said. As an example, he cited less-restrictive
tariffs that allow wealthier people to import sports cars
at half the cost and noted that tariffs also can be lifted
on food imports, allowing people from lower socioeconomic
groups to benefit as well.

“The most
accurate way to figure out what’s going on in Latin
America is to find out what the people themselves think
and see what sorts of policy reform they’re voting
for,” Brown said. He cautioned that democracy does
not guarantee that certain groups in society will actually
benefit from policy changes and that indigenous groups should
not vote for reform “under the disillusion that they
will be franchised by democratic regimes.”

Panelist Wendy
Hunter, an associate professor of political science at Vanderbilt
University, said it’s too soon to evaluate the effectiveness
of economic reforms. “Everything takes time to shake
out and get going,” she said.

Hunter noted
that gaps among wage earners reflect levels of education.
In Brazil, unless a family makes two minimum salaries (about
$270 when combined), they are likely to take their kids
out of school so they can sell fruit on the streets to supplement
the family income, she said. “Someone needs to get
gutsy and put money where it counts in socially useful ways
and not fund universities where students are middle-class.”

Panelist Roy
Thomasson, director of the Young Americas Business Trust
of the Organization of American States, also noted that
young people’s education often parallels that of their
parents. “If there is no investment in their education,
they will be in the same economic level 20 to 30 years from
now,” he said.

Thomasson acknowledged
that some people might feel helpless and hopeless when multinational
corporations establish a presence in their country. He suggested
that they preserve their culture by commercializing it,
becoming entrepreneurs and taking advantage of the Internet
to sell products to tourists and to customers all over the
world.

Katharine Donato,
also a panelist and a Rice associate professor of sociology,
commented on the effects the North American Free Trade Agreement
(NAFTA) has had on poverty and inequality in Mexico.

“NAFTA
has widened the gap between those who have and those who
don’t,” she said. The Mexican government has allowed
land to be sold for capital investments, which has increased
the cost for farmers. Consequently, much of Mexico’s
poor population in the rural areas has migrated to Mexican
cities and the United States, where the unemployment rate
is low. “This has produced a growing labor shortage
in many Mexican communities, which is likely to fester and
create instability,” Donato said.

Panelist Peter
Rodriguez, assistant professor of international business
and public policy at Texas A&M University, said the
growing economic inequality is not a malfunction of economic
reform policies.

“Open markets
tend to work like that in the near term,” he said.
“You give people great rewards for taking great risks.
Neoliberal policy has opened the door to the global market,
but it also has raised the admission price.” He anticipates
slow generational growth, with average income convening
over the long term.

In addition
to the panel of experts, fellows at the Americas Project
heard a presentation by Domingo Cavallo, Argentina’s
former minister of economy, and spent several days discussing
the issues amongst themselves.

Doug Schuler,
associate professor of management in the Jesse H. Jones
Graduate School of Management at Rice and project coordinator
for this year’s Americas Project conference, said the
fellows at this year’s event represented 17 countries.

“Boom To
Whom? The Effects of Foreign Trade and Investment Liberalization
on Poverty and Income Distribution in the Americas”
was the theme of the conference, which was organized by
Rice’s Baker Institute, the Organization of American
States and the Greater Houston Partnership.

Support for
the 2000 Americas Project was provided by The Starr Foundation,
The Coca-Cola Foundation, Strake Foundation, Mitchell Energy
and Development Corp. and Parkway Investments/Texas Inc.