Let's take a stroll down South American Way. Brace yourself. What you will see is not going to be pretty.

Venezuela

First we see Venezuela, a country rich in oil--and little else. For two generations now the country has purchased social peace by systematically redistributing the earnings of its primary natural resource. Over time, however, corruption and mismanagement have combined with structural inefficiencies to reduce 80 percent of the population to poverty. The country's answer? More of the same, prescribed this time not by conventional politicians but by a self-styled military savior, retired lieutenant colonel Hugo Chávez. However, after nearly three years of his presidency, the social indicators have not improved, despite oil prices that have been at their highest level in two decades.

Not so long ago, Venezuela was arguably the most integrated society in South America, not only socially and economically but also racially. Chávez, however, has divided the country along new lines as well as old ones. White, middle-class, urban, sophisticated Venezuela has convinced itself that all its problems will be solved once Chávez is gone. Darker, poorer Venezuela is less enamored of its president than it was three years ago, but suspects (perhaps rightly) that the opposition cannot come up with a better program, and in any case, the downtrodden believe that Chávez's enemies are its enemies as well. Rhetoric has become ugly, and expectations on both sides have become unrealistic. It is an open secret that both sides are arming for a settling of scores. For now, only the loyalty of the service chiefs to Chávez keeps the country from plunging into civil war. How much longer will the chiefs stand by him? No one can say.

While in theory U.S. interests would be advanced if a different kind of government came to power in Venezuela, the forcible removal of Chávez before the end of his term (he has more than three years to serve) would be counterproductive politically and diplomatically, and would be questionable morally as well. A successor government would be unable to assume power--or, at least, hold it--without a violent response on the part of hard-core chavesistas. The president himself would not quietly take a plane to Cuba, his spiritual home. Even if all the pieces fell perfectly and peacefully into place, the new government would lack international legitimacy. Moreover, the Venezuelan political class that would take Chávez's place would have to behave entirely differently from the way it has carried on for more than forty years. The sudden reappearance in the wings of former president Carlos Andrés Pérez is not reassuring on this count.

Colombia

Then there is deeply troubled Colombia. Paradoxically, all things being equal, this country should be the natural leader of the region. It has the most dynamic business community, the most cultured elite, and a wide range of valuable resources. Unfortunately it suffers from its comparative advantage in the production of illicit substances, demand for which seems unending in both Western Europe and the United States. Drug trafficking makes it possible for Colombia's largest guerrilla movement, the FARC, to be virtually self-financing (as opposed to other such organizations in Latin America, which typically depend on infusions of money and guns from the outside). The inability of the army and police to protect ordinary citizens from the depredations of these pseudorevolutionaries has produced an unsavory response--the so-called paramilitary formations, which engage in a kind of counterterrorism of their own. While many paramilitary formations are financed by ranchers and other wealthy Colombians, some are fueled by drug money as well.

According to the United Nations, the European Union, the International Crisis Group, various human rights organizations, and other pious agencies, the Colombian situation could best be resolved through a negotiated settlement between the guerrillas and the government. These negotiations are often referred to as the "peace process." Like the one in the Middle East, it is not going anywhere. And why should it? The guerrillas are having a perfectly wonderful time keeping Colombian civil society off balance; they are not answerable--as are Colombia's elected officials--to the electorate; they do not have to worry--as do Colombia's armed forces--about alleged violations of human rights; their weapons (kidnapping and murder) are ones against which there is no effective defense. They may even manage to make the whole affair a domestic U.S. political issue.

On the face of it, it seems incredible that 17,000 determined misfits should be able to immobilize a country of more than 40 million productive citizens, much less that the so-called international community should put the two sides on a common plane of respectability. But such is the fecklessness of Colombia's civilian leadership--and very particularly of its outgoing president, Andrés Pastrana--that the guerrillas are in a far more advantageous position today than they were even two years ago. Then they controlled some 40 percent of the nation's territory; today some estimates run as high as 60 percent. As a result, many Colombians have fled rural areas and small cities, overloading the housing, sanitation, and police requirements of major urban centers.

The recent election to the presidency of Alvaro Uribe, whom American news media have been quick to label a "hard-liner," represents a popular reaction to this unfortunate state of affairs. But whether Uribe will be able to sustain support from Washington and the U.S. Congress, which allocated substantial sums in 2000 for police and military assistance, remains unclear. The human rights community is already licking its chops at the prospect of a nasty debate over whether an elected government in Colombia even has the right to combat a domestic terrorist insurgency. We can expect that every time a Colombian policeman steps on someone's foot calls for an international investigation will quickly follow. Meanwhile, the number of Colombians fleeing the country continues to mount.

Peru

Next we come to Peru. After ten years of authoritarian rule by Alberto Fujimori and his cabal of corrupt henchmen, the country held competitive elections in which Alejandro Toledo emerged triumphant. In many ways a remarkable man, Toledo is an economist who comes from extremely humble origins; he is not the first Peruvian of obvious Indian ancestry to accede to the presidency, but the first to be democratically elected. The ethnic card can be played only so far, however. Peru needs more than a president who "looks like" most Peruvians; it requires vast investments in education and infrastructure, serious judicial reform, and a different quality of political leadership. Unfortunately, so far the Toledo administration--in office less than a year--has been disgraced by scandals involving payoffs to key presidential aides, and the president himself has yet to offer his people an economic program behind which they can rally.

Toledo's team has stumbled over a proposal to privatize government-owned electrical power plants. The plan, which would have generated new industries and more employment, has led to violent protests and a state of siege. If the president cannot coax Peruvians beyond the stagnant status quo, doubling the amount of U.S. development assistance-as President Bush did during his lightning visit to that country in late March-will have no positive effect. If Toledo falters, the alternative is likely to be former president Alan García, who fled the country more than a decade ago after plunging it into bankruptcy. The fact that García now speaks the language of markets and efficiency should fool no one; he is still the same rabble-rouser who possesses a chilling knack for touching the most sensitive nerve-endings of the average Peruvian.

Brazil

As this Outlook goes to press, the prospects of Luiz Inácio "Lula" da Silva's being elected president of Brazil appear to be growing almost daily. The most recent development--in many ways astounding--has been his endorsement by the Liberal Party, which by any standard should be regarded as right of center. Without its support, Fernando Henrique Cardoso's designated successor, José Serra, will find his uphill climb to the presidency tilted several more degrees against him. In many ways this election is beginning to resemble the Chilean election of 1970--in which Marxist president Salvador Allende won the presidency on his fourth try. There, too, the Center and Right divided instead of offering--as usual--a common candidate. The main difference--let us hope it weighs heavily in the balance--is that Brazil is not Chile and this election takes place under very different geopolitical circumstances than Allende's.

In recent weeks the financial markets in the United States, Western Europe, and Brazil have finally started to react to Lula's improving fortunes. Capital is beginning to leave the country, and the Brazilian real has begun to plunge on currency markets. As a result, the candidate has allowed several of his associates to put it about that once in office he will not be anywhere near as radical as he sounds. The Latin American diplomatic corps in Washington has been busily reassuring the State Department and others that once in office Lula will take a more "pragmatic" or "social democratic" approach to things--that is, he will not be all that different from President Cardoso.

It is just possible that Brazil is too complex a place to precipitously veer off in a new and radical direction. However, Lula is a deeply convinced ideologue, and Brazil is an immense country that has tended generally to overestimate its options in the international economic system. If Lula insists on carrying out his most extreme proposals to the letter, he will soon discover the real tensile strength of his country's economic and political system. Billions of dollars will leave, as will thousands--perhaps hundreds of thousands--of capable professionals. Alternatively, if he moderates his course, he risks provoking divisions within his own following. Both Chávez and Toledo are suffering from a backlash against excessive pre-electoral promises; perhaps Lula will be next.

In what may turn out to be the best-case scenario, Lula may try to cover his retreat with atmospherics, much in the style of his Venezuelan counterpart--endless speeches against globalization, pilgrimages to Cuba, perhaps a snub here and there to the American ambassador or to President Bush at some international meeting. This would be a small price to pay for rational economic policies, especially since Brazil's performance strongly affects all of its South American neighbors.

Argentina

The most important of these neighbors is, of course, Argentina. To be sure, at this point Brazil's economic fortunes may be the least of Argentina's problems. A country that for generations helped feed the world is now suffering real hunger; the Latin American country with the largest and most powerful middle class is now experiencing rapid pauperization. The problem is an excessive debt burden that, as things stand now, cannot be readily refinanced. Prior to releasing new loans, the International Monetary Fund demands substantial changes in the way Argentina manages its internal finances. Unfortunately, its politicians cannot readily accomplish those changes, since in many provinces virtually half the economically active population is employed by the state. Indeed, it is even arguable that if the country were still languishing under a stern military dictatorship the IMF's demands could probably not be met.

The Argentine problem reduces itself to two different agendas. The first is immediate relief. The country cannot be allowed to continue declining without prospect of recovery. Such decline compromises its democratic political system and the very health of its civil society. The second order of business is a credible pledge to reorganize the country's internal finances so that it will not end up in this situation again. The key word here is credible. So far the government of President Eduardo Duhalde has been long on asking for the first, short on producing the second. Because it has failed to coax fresh money out of the IMF, the government's numbers have been dropping drastically in the polls, and since it is, indeed, a transitional regime--Duhalde replaced President Fernando de la Rúa by act of congress, and is filling out his term--elections for a new president may end up being called well before September 2003.

In many ways elections--whether early or called on schedule--offer little in the way of solutions. On one hand, Argentines nowadays claim to despise politics and politicians generally, and even go out of their way to insult any politician who happens to cross their path. This is not a very appropriate frame of mind in which to choose new leaders, particularly since whoever follows this administration will inevitably be drawn from the same pool of people that have been in political life these past twenty years. On the other, current polls suggest that no leader or particular program enjoys enough support to govern. For example, the Cattenberg survey[1] gives the best score to Elisa Carrió, an independent member of the Chamber of Deputies whose entire program amounts to jailing corrupt politicians. In spite of her relative popularity, she attracts only 18 percent of the electorate. Luis Zamora, a Trotskyite, and former governor (and for twenty-four hours, president) Adolfo Rodríguez Saá are tied at 10 percent. Santa Fe Province governor Carlos Reutemann and former president Carlos Menem share 7 percent, and a mere 2 percent think President Duhalde should be given a term of his own. Right behind Elisa Carrió are the fourteen percent of Argentines who plan to cast blank ballots.

If one groups all of the potential candidates into ideological clusters, roughly 29 percent of the voters favor a left-of-center alternative, 23 percent a right-of-center alternative, 10 percent a "centrist" option, and the rest of the support is scattered into other categories not easily classified. It is not without interest that former president Menem's standing has risen from 5 to 7 percent between May and June; even so, 47 percent blame him for the country's current parlous state.

A Problem of Political Culture

More than twenty years have passed since most South American countries embraced electoral democracy. At the time there was widespread repudiation of military governments and the sense that popular participation would lead not merely to greater respect for human rights, but greater economic well-being. Ten years ago market-friendly economic policies were added to the mix. After a decade of general economic growth, however, all of the countries with the exception of Chile have entered into a period of economic stagnation and--if the term is not too strong--political decay.

The main reason is not far to seek. Formal arrangements--such as competitive elections at all levels--are a necessary but not sufficient precondition for working democracies. Politics must be something more than patronage to deserving followers or the opportunity for a few well-connected people to enrich themselves through government contracts. The way democratic politics have been practiced almost everywhere in South America these past two decades has led to widespread disillusionment and anger, and understandably so. In the past, antipolitical sentiments led to military intervention; today, happily, that is no longer possible. Now, however, Latin Americans have no choice but to confront themselves as well as their politicians. Why is it that--after so many rounds of disappointment--so many people are still prepared to believe that any candidate can solve all their problems? Why do politicians brazenly promise what they must surely know they cannot deliver, thereby setting themselves up for a crisis of governability? Why do Latin politicians so frequently scorn the basic problems of their peoples--education, sanitation, security, transportation--to waste their time endlessly traveling to "summits" or making pilgrimages to Washington or the European capitals?

The problem is one of a deficient democratic political culture, blame for which must be shared equally by leaders and peoples. Riots and peremptory demands for food and jobs cannot produce either. A more serious and less grandiose approach to politics is needed. Failing that, any U.S. administration, even with the best will in the world, cannot pull these countries back from the rim of disaster where some seem to be dangerously poised.

Note

1. Informe Político (June 2002).

Mark Falcoff is a resident scholar at AEI.