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ANDRES OPPENHEIMER S. America facing tough times



Published: Wed, January 19, 2005 @ 12:00 a.m.



Two new reports -- one by the U.S. government's National Intelligence Council and the other by a leading European Union expert -- paint a gloomy picture of Latin America's future: They say the region's influence in world affairs will continue to decline.

Before I tell you why these reports should be taken seriously -- but not too seriously -- let's look at their main conclusions.

The report released Friday by the National Intelligence Council, the U.S. government intelligence community's center for mid-term and long-term thinking, predicts that by 2020 the United States will continue to be the world's most powerful nation, but somewhat less so than today.

It will be followed closely by China and India, with Europe perhaps farther behind, and Latin America -- with the possible exceptions of Brazil and Chile -- almost nowhere in the horizon. The study, titled "Mapping the Global Future," doesn't even mention Latin America in its introductory summary, "The 2020 Global Landscape."

The world trend toward globalization will continue over the next 15 years, but the focus of international economic dynamism will move to Asia, the report says.

Eastern influence

Since most of the world's growth will take place in China, India and Indonesia, "multinational companies from today's advanced nations will adapt their 'profiles' and business practices to the demands of these cultures," it says. In other words, the world will become less Westernized, and more Easternized. (We should start getting used to that word.)

Latin America, largely because of "government ineffectiveness," will continue to have a hard time benefiting from its piecemeal integration into the global economy.

And there is "an increasing risk of the rise of charismatic, self-styled populist leaders" in the region, who will seek to exploit the income gap between rich and poor to consolidate their power, it says.

A preparatory study for the NIC report, titled "Latin America 2020," and produced by non-government experts from Georgetown University and two South American think tanks, puts it in blunter terms: "Latin America as a region will see the gap separating it from the most advanced nations on the planet grow wider," it says.

Among other reasons, the academic experts said that, unlike Asian countries, "almost none of the Latin American countries will be able to invest their scarce resources in developing large research and development projects" of commercial consequence.

A separate report by Rolf Linkohr, chairman of the European Parliament's delegation for relations with South America, starts out saying that "Latin America's influence on world affairs is decreasing."

The region is falling behind because of inefficient governments, the absence of independent justice systems, poor education standards and because "corruption is the order of the day," it says.

"As a result, the credibility of the political elite is low," it says, adding that the region's "backwardness can mainly be blamed on an elite which is more concerned with itself than with society."

Are these reports excessively harsh? They cannot be dismissed lightly, if anything else because they reflect the current thinking in U.S. and European academic and political circles.

Corruption epidemic

But there are many things that could change over the next few years. We can't rule out a new Asian financial crisis -- triggered by China's fragile banking system or by the same corruption epidemic that doomed many Latin American countries' economic opening in the 1990's -- that could turn all of today's forecasts obsolete.

Even if current world trends continue, we may see Chile and Brazil continue their economic openings, and thrive.

And many other parts of Latin America may do very well, regardless of what happens with the region as a whole.

The reason: in a multinational corporations-led, Internet-based world economy, investors will consider nation states as increasingly irrelevant. Instead, they will be looking at transnational economic corridors and pockets of modernity within nations.

So don't cry for Latin America. Cry for the millions of Latin American poor who, because of populist leaders who cling to outdated nationalist credos while Asia embraces capitalism, are condemning them to live in misery.

X Andres Oppenheimer is a Latin America correspondent for the Miami Herald. Distributed by Knight Ridder/Tribune Information Services.




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