Economic collapse in Latin America

[Louis Proyect <lnp3@xxxxxxxxxxxxx>]

Financial Times - February 4, 2000

LATIN AMERICA: Region no better off now, says World Bank
By Henry Tricks in Cancún

James Wolfensohn, president of the World Bank, on Thursday painted a grim
picture of poverty in Latin America, saying the region was no better off
than it was more than two decades ago despite far-reaching economic reforms.

His remarks were a dose of cold water in an otherwise upbeat meeting of
finance ministers from Latin America, the US and Canada, where Michel
Camdessus, managing director of the International Monetary Fund, reaffirmed
the belief that Latin America's economies would grow a boisterous 4 per
cent this year.

"We are no better off than we were in the 70s," Mr Wolfensohn said, noting
that the gap between rich and poor in Latin America was the worst in the
world, that 80 per cent of the region's 30m indigenous people lived in
poverty and that 40m more people lived below the poverty line now than 20
years ago.

He urged Latin Americans to address the issue by enlisting the support of
the Catholic Church, non-governmental organisations and trade unions,
warning that social instability could kill long-term growth.

The recent bloodless coup in Ecuador, he said, might reflect that threat.
"What happened in Ecuador was an expression by a group of (indigenous
people) that they were upset."

Mr Wolfensohn also expressed sympathy for those left behind by
globalisation, saying that the protests in Seattle that disrupted last
year's meeting of the World Trade Organisation were not just the work of a
"group of radicals" and reflected some "very legitimate" views.

His message contrasted sharply with recent remarks by his host, President
Ernesto Zedillo of Mexico, who lambasted international NGOs at the World
Economic Forum in Davos, Switzerland, for "global-phobia".

"There's a lot of fear everywhere about how this new globalised community
is going to work out," Mr Wolfensohn said.

His emphasis on the importance of fighting poverty was broadly echoed by Mr
Camdessus, though the IMF boss used one of his final meetings with top
Latin American officials before his departure this month to praise the
economic reforms that have helped transform Latin America since the 1980s.

He predicted the region was entering the most delicate phase of reform, and
pressed its rulers to combat powerful interest groups in order to bolster
tax collection, strengthen banking systems and reduce poverty by spurring
long periods of economic growth.

He said the IMF had more than $35bn committed to Latin America.


Louis Proyect

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