Magazine article Insight on the News

Patience Is the Root of Latin Investment

Magazine article Insight on the News

Patience Is the Root of Latin Investment

Article excerpt

If the Chiapas uprising in Mexico just one year ago marked the end of the honeymoon for the free-market revolution in Latin America, the current peso devaluation crisis in Mexico is its first major marital row.

A row can bring serious reflection or panic, and the peso crisis mainly has brought the latter. The panic, in turn, has deepened the original difficulties and prompted some prominent Mexican voices to search for a scapegoat and settle scandalously on former President Carlos Salinas, the man who has done more to benefit his country that any any other leader this century. The resulting cynicism regarding Mexico has spilled over many other Latin American countries - promoted everywhere by leftist leftovers from failed former regimes who have a vested interest in preventing real change - during what still is the most promising period in the modern history of the hemisphere.

The panic was predictable because ignorance and shortsightedness still cloud Americans' views of Mexico, Latin America and development in general. The fact is, Latin America is in the midst of its most far-reaching revolution in five centuries. Enthusiasm for the United States has not been so high since the anticolonial revolutions 200 years ago. Never before has there been such extensive support for political and economic institutions that are so potentially responsive to the needs of the people, and not just favored families, businesspeople, generals, bureaucrats, politicians and self-styled revolutionaries of the past.

But fundamental change cannot come overnight. The frustration that precipitated the dismantling of Latin America's centralized and inward-looking systems was replaced by nearly mindless euphoria in Mexico, Latin America generally and the United States.

This tendency was illustrated by the debate about the North American Free Trade Agreement, or NAFTA, an important instrument in regional change. NAFTA was shamelessly over-sold by its supporters and similarly dismissed by detractors such as Ross Perot, who once again predictably is coming out from behind his rock. And early privatizations and some other reforms led many naive foreign investors to believe Latin economies were good for safe, easy and endless profits - in the short term. …

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