S. America Reels, Looks North Again ; President Bush Tuesday Signed Free-Trade Legislation after Approving a Loan for Uruguay

By Howard LaFranchi writer of The Christian Science Monitor | The Christian Science Monitor, August 7, 2002 | Go to article overview

S. America Reels, Looks North Again ; President Bush Tuesday Signed Free-Trade Legislation after Approving a Loan for Uruguay


Howard LaFranchi writer of The Christian Science Monitor, The Christian Science Monitor


Uruguay has long been known as South America's Switzerland for its prosperity and financial stability. But these days Hernan Bolerio gauges his country's economic decline by the rising number of customers converting their cars from gasoline to diesel fuel.

"It's cheaper, and people are desperately searching for ways to survive," says Mr. Bolerio, the owner of an auto sales and repair shop in Montevideo, Uruguay's capital. "Without that [work], I don't know what I'd do."

Bolerio's tale is symbolic of a South America that, economically and politically, has once again run out of gas. After a "lost decade" of economic decline in the 1980s gave way to years of optimism over US-backed privatization and free-trade reforms, the region is again on the ropes - teetering on the edge of a disaster that could drag the global economy down with it.

There is discouragement and frustration in the region. But as US Treasury Secretary Paul O'Neill visits this week - on the heels of Monday's $1.5 billion "bridge" loan to reeling Uruguay and Tuesday's free-trade legislation signed by President Bush - many regional observers are hoping the move portends a return to more US involvement rather than less.

The quick loan signals a shift away from the Bush administration's blanket condemnation of such bailouts. But it probably suggests even more about the administration's concern over Brazil, a giant with a sinking currency and Amazon-sized debt - over $250 billion. With substantial investments by US banks and corporations in Brazil, it is considered too big to be allowed to fail.

With Brazil currently in negotiations with the International Monetary Fund (IMF) - asking for an additional $20 billion to go with the $33 billion it has received over the past four years - the "strong support" Mr. O'Neill lavished Monday on the Brazilian government's economic policies indicates the backing Brazil can expect from the US and international financial institutions.

After stops in Brazil Monday and Uruguay yesterday, O'Neill meets today with leaders in the storm's vortex - Argentina, which in December defaulted on its $142 billion foreign debt, and where the economy is expected to shrink by 15 percent this year.

But Argentines should not yet expect any Yanqui bailout. For the Bush administration, the guiding principle will still be help for those who first help themselves. The US does not yet believe Argentina has done enough to control spending and cut corruption.

Still, word of the US loan to Uruguay and yesterday's signing by President Bush of trade legislation that may pave the way for a free- trade zone throughout most of the Western Hemisphere, are buoying hopes for US involvement in the region. "People don't want the US involved less in the economy, they want to see a real partnership that grows more," says Jorge Caumont, an Uruguayan economist.

Walter Tavares, a pet-shop owner in Rio de Janeiro, says that Brazil can argue all it wants with the US and the IMF, but ultimately it will have to back down because it needs financial aid.

"Brazil needs help right now, there is no way to avoid it," Mr. Tavares says. "Imagine if Brazil became like Argentina, this country ... the size of a continent. It would be chaos." Adds Uruguay's Mr. Caumont: "If the US offered a free-trade agreement today," for example, "Uruguayans would jump at it."

That's unexpected coming from a region that remains wary of globalized commerce. But it also suggests that the burden will fall on the US and other "wealthy" countries to formulate mutually beneficial trade and investment policies.

'Weariness and wariness'

"You feel weariness and wariness across the region" towards economic reform and free trade with the US, says Michael Shifter, a South America specialist at the Inter-American Dialogue in Washington. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

S. America Reels, Looks North Again ; President Bush Tuesday Signed Free-Trade Legislation after Approving a Loan for Uruguay
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.