January 29, 2007


Mexico's Calderon Urges Region to Reject Turn to Failed Past (Juan Pablo Spinetto and Patrick Harrington, Jan. 29, 2007, Bloomberg)

Mexican President Felipe Calderon warned that Latin America is splitting into two economic camps, one embracing a failed past of state control, the other seeking growth with foreign investment.

Calderon, 44, used the global audience provided by the World Economic Forum in Davos for some of the sharpest language of his 60-day presidency to deride a push, led by Venezuelan President Hugo Chavez, for increased state control of the region's economies. In the past six months, Venezuela and Bolivia have moved to nationalize foreign assets and Ecuador is threatening to default on its foreign debt. The countries are also weakening central bank autonomy.

``Many countries in Latin America have chosen a move toward the past, and among their most harmful decisions are seeking nationalizations, expropriations, state control of the economy and authoritarianism,'' Calderon said in an interview in Davos. ``Mexicans have decided to look to the future and to strengthen democracy, markets and investment.''

Latin American nations must choose a path of democracy and free markets or risk falling behind competitors in the rest of the world, Calderon said. Mexico, by asserting the rule of law and luring investment, will become one of the world's largest economies in coming decades, he said.

He leads an emerging Red State.

Five lessons that Latin America could learn from India (Andres Oppenheimer, HACER)

First lesson: Continuity pays. Unlike many Latin American countries, which change economic policies with each new government, India has stayed the course of its economic reforms. Since 1991, India has opened up most sectors of its economy to the private sector, including airlines, railroads and telephone companies.

While India is a messy democracy, with a few communist-ruled states and dozens of ethnic enclaves that in some cases have violent separatist movements, there is a consensus that stability brings about investment and that there is no growth without investment.

Even India's communists have turned pro-investment. Earlier this month, the communist government of India's West Bengal state made headlines by granting rural lands to India's Tata Motors for a car manufacturing plant, despite violent protests from local farmers and peasants.

Second lesson: There is more than one way to privatize. Unlike several Latin American countries, which sold major state-run monopolies to private investors, India has most often left state-owned companies alive, but forced them to compete with new private firms. That helped reduce social opposition to privatizations, officials say. [...]

Third lesson: Gradualism pays. Unlike in many Latin American countries, where governments privatized state monopolies overnight, India opened its economy gradually over the past 15 years. That made these measures politically easier to implement.

Fourth lesson: Investment in education pays. [...]

Fifth lesson: Meritocracy has its merits. While education is largely free in India, the country has set up a meritocratic school system, in which students have to pass a rigorous high-school exam, whose grades determine which university students can attend.

Posted by Orrin Judd at January 29, 2007 9:36 PM

If I remember correctly, the WSJ had a piece on Ecuador's President a couple of weeks ago (no doubt by Mary Anastasia O'Grady) stating that there are no members of his party in Parliament.

That says something about the man (and the secrets he keeps) or something about the state of politics in Ecuador.

It's time to confront Hugo with the Monroe Doctrine. Most directly.

Posted by: ratbert at January 29, 2007 11:27 PM

Alas the Monroe Doctrine applies to foreign aggression, not the native-born kind.

Posted by: erp at January 30, 2007 11:36 AM

Then what were we doing in Chile, Nicaragua, El Salvador, Grenada, Cuba....

Posted by: oj at January 30, 2007 2:44 PM

... covert ops.

Posted by: erp at January 30, 2007 4:54 PM