In this article, Rafael Bernal of The Hill presents attestations from top economic official and president of the IBD Maurico Claver-Carone, who suggests that the bank’s primary focus is in fostering economic prosperity and security in Latin America. Claver-Carone believes that the key towards healing Latin American economies is through good, quality job creation with a focus on funding “small-medium sized business[es] owned by [women]” (Bernal). The author goes on to further express that US stability is tied to Latin American stability in that a stable economy should lead to lower rates of crime and immigration to the United States.
This article fails to acknowledge the lasting impact of neoliberal reforms in Latin America and how they have affected the region’s economic and political stability as a whole. Laissez faire capitalism and neoliberalism became the dominant economic system during the 1980’s and 1990’s as two powerful world leaders, Margaret Thatcher and Ronald Reagan, sang the praises of a freer world market. This individualist economic view was exported to Latin America through ideological crusaders such as Chile’s Chicago Boys and US economist Milton Friedman, men that challenged the dominant dependency theory and instead advocated for a free market system.
After success in Chile, a Latin America largely skeptical of authoritarianism and imperialism slowly began to adopt the new system dubbed the Washington Consensus. This system deregulated markets, opened the economy with low trade barriers, increased foreign investment, and cut social spending in hopes of achieving a free-enterprise economy and libertarian spirit. The system enjoyed years of success in the region but the cracks of neoliberalism ultimately revealed themselves to the public and now the system continues to heighten individual suffering in the region.
According to William I. Robinson, “neoliberal adjustment programs have resulted in a fall in popular consumption, a deterioration of social conditions, a rise in poverty, immiseration and insecurity, heightened inequalities, social polarization, and resultant political conflict” (Problems 276). Neoliberalism in Latin America was an attractive policy in the ‘80s and ‘90s but by the turn of the century, political instability and polarization, violence, and poverty have skyrocketed. The assumption that job creation and small business investments can address the souring laissez faire economic system and increasing violence in Latin America is short sighted and redundant. Friedman’s suggestion that “acute mystery and distress” can be combated through neoliberal reforms and traditional capitalist systems have failed as the needs of the poor go unchecked and social unrest and instability increase.
In recent years, the region has experienced instability by way of inefficient economic reform that prioritizes big business in budget spending, infringements on democracy by neoliberal and authoritarian populist leaders, growing rates of hunger and malnutrition, and now the economic impact of COVID-19 on a region in which limited social spending takes a toll on vulnerable populations. A history of extractive economic systems, rise and fall of social revolutions, and the influence of free market systems have created a social and economic problem in which neoliberal reformists will find that the solution is more complex and complicated than bolstering the economy.
Works Cited
Bernal, Rafael. “Top Officials Stress Job Creation as Key to Latin American Economic Development.” TheHill, The Hill, 17 Nov. 2020, thehill.com/latino/526267-officials-stress-job-creation-for-latin-american-economic-development.
Problems in Modern Latin American History : Sources and Interpretations, edited by James A. Wood, and Anna Rose Alexander, Rowman & Littlefield Publishers, 2019. ProQuest Ebook Central, https://ebookcentral.proquest.com/lib/baruch/detail.action?docID=5743856.
