FEW FIGURES expressed Latin America's tragic sense of life better than its liberator, Simon Bolivar. Disillusioned by his failure to unite the former Spanish colonies, Bolivar in his final days lamented that those who serve revolution in these lands "plow the seas."
That has proved a useful metaphor for most Latin America watchers, who tend to linger on intractable problems-corruption, economic blunders, instability, poverty, and racism. Many books, such as Eduardo Galeano's The Open Veins of Latin America, have encouraged Latinos to blame foreigners, above all the United States, for the continent's chronic failures.
Michael Reid, the Americas editor of the Economist, sees things differently. In his highly readable and sweeping Forgotten Continent: The Battle for Latin America's Soul, he argues that the region, in spite of its persistent poverty and inequity, has achieved a quiet revolution of sound and lasting reform. Marxist insurgencies, military dictatorships, and economic breakdowns still linger, but they are on the wane.
If true, Reid's assessment is good news for the United States. Richard Nixon said, "People don't give a damn about Latin America now"--and the same words could have been repeated after 9/11--but most Americans recognize the shortsightedness of such a view. Trouble south of the border invariably ends up on our doorstep.
Reid emphasizes that the importance of Latin America extends far beyond its effect on the United States: its welfare constitutes a vital element in the forward march of the global market. For him, Latin America "has become one of the world's most important and testing laboratories for the viability of democratic capitalism as a global project."
Economic progress in the region, he contends, has disproved theories about dependency, or the imperial legacy of Portugal and Spain, that used to be the standard academic explanations for Latin backwardness. Most Latin American countries now accept the so-called "Washington Consensus," a menu of neoliberal reforms directed by economists during the 1980s. And though neoliberalism has been discredited in name, policies of fiscal responsibility, privatization, inflation fighting, and lower tariffs have taken root across Central and South America.
Some key political leaders converted to the new creed. Brazilian President Henrique Cardoso, for one, abandoned ideas that blamed the region's problems on predatory foreign capitalism and led his country's privatization and currency-reform efforts. Even Chile's socialist government has embraced neoliberalism, and the Andean nation is now poised to join the ranks of developed nations with successful export-led growth models.
Producers throughout Latin America have recently increased the value of their core industries. Brazil's investment in biotechnological research and development, for example, has turned the country into a leader in plant-based fuels. Its sugar-derived ethanol is far more efficient and sustainable than the U.S.'s corn-derived variety.
Latin American nations are improving their human capital, too, training their people to compete in the global market. Mexican businessmen developed the Monterrey Institute of Technology, with branches all over the country linked to local business needs. This educational advance stands in pleasing contrast to the nation's state-run universities, which for years were geared to churning out unemployable liberal arts majors.
The embrace of market ideas in Latin America, Reid observes, came from the most improbable sources. General Pinochet, after his coup in 1973, started Chile on the road to economic reform. And in Mexico, the authoritarian and protectionist Institutional Revolutionary Party began liberalizing its economy to recover from the 1980s debt crisis. Several other nations followed suit, instituting central bank independence and relaxing trade restrictions. Some hope to negotiate their own NAFTA agreements with the United States. …