Why did Latin American countries have a difficult time adopting democracy quizlet?

Section 5. Latin America and the Caribbean Region

Item 1. Regional Situation

1. Political Situation

The most important element in the recent political situation of Latin America is a tide of democratization. Since the 1980s, presidential and general elections have been held in many countries in Latin America, and the election systems based on the multi-party system has taken root in these countries. At present, nearly all of the 33 Latin American and Caribbean countries have established democratic governments. (In Haiti, an interim civilian government is in power. A general election will take place shortly.) In October 1989, the American States Summit Conference was held in Costa Rica for the first time in 22 years in an attempt to solidify democracy, with the participation of heads of 16 American States countries including the United States and Canada.

An improvement in the field of human rights has been made with the progress of democratization. Meanwhile, each country has deepened its acknowledgment of the market economy and is pursuing such reforms as privatization of national enterprises and trade liberalization on the basis of the principles of a market oriented economy. However, the serious problem of accumulated debts and other economic difficulties continue to be in causing social unrest. These problems and deterioration of public peace and drug abuse in some countries are the sources of an ominous threat to the progress of democratization.

Regarding diplomatic relations, while making continuous efforts to maintain friendly relations with the United States, Latin American and Caribbean countries appear to diversify their diplomatic ties in seeking dialogues with European countries and directing the greater attention in recent years to Japan and other Asian-Pacific countries. The moves seem to reflect growing European influences such as the EC integration scheduled for 1992, the recent changes in Eastern Europe, and significant economic development in Asian-Pacific countries which raised their economic status in the world. Another noticeable development is that Latin American and Caribbean countries are making further efforts to step up their relations with the Soviet Union and other East European countries.

On the other hand, U.S. President Bush, aiming at constructing new relations, announced in June 1990 the "Enterprise for the Americas Initiative" whose pillars are expansion of trade, encouragement of investment, and curtailment of debts. Particularly in the area of trade, the United States has already started talks with Mexico over a free trade agreement. In the Initiative the United States proposes, as a long-term objective, to create a comprehensive free trade zone covering the Western Hemisphere.

Within the region, various organizations such as the Organization of American States (OAS), and the Rio Group (Note) are continuing vigorous activities toward settlement of political problems. In the economic area, efforts are being made to ensure regional cooperation and to attain regional integration through a variety of cooperative bodies within the region and among the countries concerned.

Presidential and General Elections Held In and After 1988

2. Economic Issues

Latin American countries have accumulated debts which amount to about three times their total annual exports or to some 50% of their gross national product. The debts stood at $427.5 billion at the end of 1988.

Under these circumstances, the debtor countries are pursuing structural adjustments through control of inflation, reduction of government budget deficits, and promotion of exports. In March 1989, creditor countries proposed a "New Debt Strategy" designed primarily to reduce debts as well as interest payments. It has already been successfully applied to Mexico, Costa Rica and Venezuela.

The Latin American economy in 1989 showed that, while the GDP growth rate accelerated slightly to 1.1% from 0.7% in 1988, the inflation rate surged to an unprecedented 1,000% level from 760% in 1988. The trade surplus rose to $28 billion from $25 billion in 1988. This trade surplus, however, was offset by interest payments on external debts which soared to $38 billion (Note), or $4 billion more than the preceding year due to the rise of interest rates in creditor nations.

Debts of Major Latin American Debtor Nations

3. Social Problems

At present, most of the narcotic drugs including cocaine, marijuana, heroin illegally used in the United States are produced and refined in Colombia, Peru, Bolivia and Mexico. The production of drugs in Latin America is said to be caused by poverty and income disparity prevailing in rural and mountainous areas. Furthermore, drug-related offenses, terrorism, and development of underground economy are regarded as obstructions to political stability, sound economic and social development of all Latin American countries.

In September 1989, U.S. President Bush announced a national drug control strategy including international cooperation. This was followed by a series of conferences among Latin American countries to confirm their earnest efforts to cope with the drug problem; in October 1989, the drug summit meeting was held in Peru among Colombia, Peru, and Bolivia; in February 1990; the Cartagena drug summit meeting attended by the above three countries and the United States was held in Colombia; and in April, OAS ministerial drug conference in Mexico. The Cartagena Declaration issued in February, reaffirmed responsibilities of both producing and consuming countries, as well as the need for parallel efforts for improvement of economic structure and drug control. It then called for a World Conference in 1991.

In the meantime there has been growing concern about environmental problems in Latin America. The most serious problem is the loss of Amazonian forests resulting from slash-and-burn farming and regional development. Regarding the problem, the Brazilian government announced "Our Nature Plan" in April 1989, and has taken steps to protect the natural environment in the area, while international cooperation is being promoted within the framework of the Amazon Cooperation Convention and international arrangements including the UNDP. Another problem arousing concern of late is possible health hazards being caused by the discharge of mercury from gold mining along the Amazon River.

In addition, pollution in urban areas, too, is a problem. Particularly serious is air pollution in both Mexico City and Santiago. This is attributed mainly to the basin-like topography of these cities, rapid motorization and smoke from factories. In order to reinforce measures to cope with these problems, the Mexican Government has drawn up the "Integrated Plan for Reduction of Air Pollution in the Metropolitan Region.

The environmental problem has also been taken up as a major agenda at international conferences such as meetings of the Rio Group's ministers of foreign affairs, and various ministerial joint conferences of the Rio Group and EC countries.

4. Move toward Regional Integration

The move in Latin American and Caribbean countries toward regional integration, particularly of economic union, lost momentum in the 1980s due to the deteriorating problem of accumulated external debts and economic difficulties. Recently, however, moves for regional or sub-regional cooperation and integration are likely to increase in association with imminent integration of the EC and the U.S.-Canada Free Trade Agreement.

In October 1989, the third Rio Group summit meeting adopted the Ica Declaration which touched on the regional integration as well as the importance of democracy. Now that major political issues in Latin America such as the Central American disputes and the Panamanian problem have all but been settled, regional integration is expected to become a major subject of concern for the Rio Group countries. Apart from that, there have been accelerated moves toward sub-regional integration among the Andean Group and La Plata River basin countries, particularly Argentina and Brazil.

Item 2. Situation in Major Latin American Countries

1. Brazil

The presidential election (a runoff election) held in December 1989 was won by the center-rightist Fernando Collor (National Reconstruction Party). The Collor Government was inaugurated in March 1990.

A review of the Brazilian economy of 1989 shows that the GDP grew at an annual rate of 3.6%, but inflation surged by 1,765%. President Collor, at the start of his administration, launched a new economic policy known as the "Collor Plan" designed primarily to control inflation and reduce budget deficits. The government froze savings to restrict money flow, froze also prices and wages (the freeze was lifted afterwards), and took measures necessary to privatize some public enterprises. Simultaneously, it sought to improve government finances through tax increases, and carried out administrative reforms and trade liberalizatioin. The plan has been almost successful in stemming inflation, but has triggered economic recession and an increase in unemployment.

Regarding the accumulated debt problem, interest payments have been suspended since July 1989, but negotiations on the debts have gradually resumed with the IMF and other financial institutions since the end of July 1990.

In the area of diplomacy, the Collor Government has given higher priority in tightening of its relations with the United States, Japan, and the EC. From Japan, Brazil is expecting expanded cooperation in the areas of investment, technology and trade.

2. Mexico

President Salinas who took office in December 1988 has implemented sound as well as bold internal and economic policies.

In the area of domestic politics, Salinas vigorously pushed for the creation of a thoroughly law-abiding society, eradication of administrative corruption, reform of election laws, strengthened control of narcotics and control of air pollution in the metropolitan area.

In the area of economy, the government has sought to remedy the problem of its external debts, the biggest problem confronting the country. It concluded a final agreement with the commercial banking syndicate in February 1990 on a debt relief plan which provided for debt reduction among other things. Mexico has thus become the first debtor nation to accept the "New Debt Strategy" applied. In addition, measures were taken for reconstruction of its economy, such as relaxation of foreign exchange restrictions, privatization of public enterprises, as well as measures for non-inflationary economic growth. As a result, the inflation rate fell sharply to 19.7%, and the real-term GDP-growth rate rose by 2.9%, indicating that the domestic economy is recovering gradually.

Regarding foreign relations, Mexico is actively pursuing summit diplomacy aimed at coordination with the United States and establishment of a closer link with the Pacific economic region. As for relations with Japan, President Salinas visited Japan in June 1990 in return for the visit to Mexico by Japanese Prime Minister Kaifu in September 1989.

In June 1990, an agreement was made between the United States and Mexico to start preliminary talks on a Free Trade Agreement. Future developments in this respect deserve attention.

3. Argentina

The newly inaugurated Menem Administration has announced policies to promote international cooperation as well as free and open economy, and has taken steps for structural adjustments including privatization of government enterprises. These measures are gaining public support. Some notable developments in the area of domestic politics were the breakup of the trade union (October 1989) which had wielded a strong political influence, and pardons granted to the military personnel (October 1989) who had been found quilty in human rights trials.

In the economic area, inflation which flared up again after the end of 1989 has been brought to a lull since March 1990. Nevertheless, Argentina bas not been able to overcome serious recession. As for external debts, while maintaining coordination with the IMF, it has been negotiating with commercial banks.

Regarding diplomatic activities, President Menem visited the United States in September 1989 and obtained U.S. support of his policy. By shelving the sovereignty issue over the Falkland Islands (Malvinas), Argentina and the United Kingdom, in February 1990, reopened diplomatic relations which had been suspended since the 1982 conflict over the Islands. On the strength of this, Argentina promoted its ties with the EC signing the Argentine-EC Cooperation Agreement in April.

4. Peru

Peru now faces extremely difficult economic and social situations mainly caused by serious deterioration of its economy (Note), terrorist activities by an ultra-leftist guerrilla group "Sendero Luminoso " and others. Under these circumstances, in a runoff election held in June 1990 following the presidential election held in April, Alberto Fujimori (centrist), a Peruvian of Japanese descent, was elected president with a landslide victory over his contender, Vargas Llosa (center-rightist). Fujimori fought the election with a slogan of "Sincerity, Diligence, and Technology," securing support mainly from workers in urban areas and farmers in local provinces.

In June, President-elect Fujimori, prior to his inauguration on July 28, met with the beads of the IMF, the World Bank, and Inter-American Development Bank (IDB) in New York. In these meetings President-elect Fujimori expressed his intention to have his country return to the international financial community and reconstruct its economy within the framework of international coordination. Fujimori visited Japan in early July and exchanged views with Prime Minister Kaifu and other leaders of the government.

5. Panama

While a confrontation between Gen. Noriega and the United States continued, the presidential election held in May 1989 was declared null and void, and the Rodriguez interim Government came into power in September without public endorsement. This development led to further deterioration of U.S.-Panama relations and isolation of the latter from the international community. In October, Panamanian defense force officers revolted. In December the Panamanian National Assembly of Representatives declared a state of war with the United States, followed by the death of a U.S. military officer. At this point, the United States resorted to use of force in Panama to protect U.S. citizens. Then Guillermo Endara who was reportedly leading in the presidential election in May declared himself to the presidency. In January 1990, Gen. Noriega surrendered to the United States resulting in the collapse of his regime. The U.S. troops which bad moved into Panama pulled out in February. Currently, steps are being taken to subject the confidence of the government to a referendum in the aftermath of the constitutional revisions which include the abolition of military forces. The most important task of all for the Endara Administration is the reconstruction of the country's wilted economy. It is worth noting how other countries are to support the reconstruction efforts.

Japan recognized the Endara Government in January.

6. Cuba

In July 1989, Gen. Ochoa who had been arrested on the charge of smuggling narcotics was executed by a firing squad. This scandal led to the dismissal of many governmental officials of home affairs and military personnel.

In the area of foreign relations, Cuba is becoming further isolated amidst the changes in the Soviet Union and Eastern Europe. Cuba criticizes perestroika in the Soviet Union, and reiterates its loyalty to Marxism-Leninism. Meanwhile it continues severe confrontation with the United States taking exception to the U.S. military action in Panama in December 1989, and the start of trial U.S.-originated TV broadcasts beamed to Cuba in March 1990.

Item 3. Relations with Japan

1. Overview

There have traditionally been friendly relations between Japan and Latin American and Caribbean countries which have a population of 400 million and rich natural resources. The friendly relationship is evidenced by the profound support given to Japan by these countries at the United Nations and other international organizations and conferences.

Latin American and Caribbean countries have further increased their expectations and interest in Japan. From Latin American and Caribbean countries, many VIPs of ministerial rank visit Japan. Personnel exchange is being enhanced not only in the government sector but also in the economic field through dispatch and acceptance of various economic missions. It is essential that Japan should respond constructively to Latin American countries' expectations and interest.

It is against this background that the first meeting took place between Foreign Minister .Nakayama with his counterparts of the Rio Group countries in New York in September 1989. They discussed a wide range of topics related to the Latin American and Caribbean region including peace in Central America, the situation in Panama, and the accumulated debt problem. The meeting agreed to sustain and strengthen their dialogue.

While Japan welcomes the progress of democratization and improvement of the human rights situation ,in Latin American ,and Caribbean countries, a number of unstable factors still exist in these countries. Japan, therefore, will have to actively extend a wide range of cooperation in the future, with a view to encouraging economic and social development which is essential to let democratization take root in these countries.

Japan has provided the Latin American and Caribbean countries with financial aid amounting to $5.58 billion (as of the end of April 1990) under its fund recycling scheme. Japan needs to continue efforts to ensure smooth implementation of the scheme while taking into account economic conditions in the region.

As part of efforts to solve environmental problems, Japan is cooperating in reforestation and other forestry-related projects in Brazil, Mexico, Chile and other countries, and has sent environment study missions. Also, Japan pledged to provide Mexico with ODA loans to help solve environmental problems when President Salinas visited Japan in June 1990.

2. Citizens of Japanese-Descent

Some 1.3 million citizens of Japanese descent live in Latin America, who have greatly improved their social standing through hard work. In Peru, Alberto Fujimori has become the first citizen of Japanese ancestry to be elected president and for that matter, the first president of Japanese parentage ever in the world. He visited Japan in July shortly before his presidential inauguration. In June 1990, Minister of Economy Ominami, the first Chilean of Japanese descent to become a Cabinet minister in Chile visited Japan as an official guest of the Ministry of Foreign Affairs.

Meanwhile, the labor shortage in Japan has prompted the flow of workers of Japanese ancestry from Latin American countries suffering from an unstable economic situation. Although some point out that a wave of migration may cause the hollowing out of their hometown communities, one should not underestimate the significance of the experience the workers gain in their encounter with the culture and communities of the land of their ancestors.

3. Economic Relations

Japan's economic relations with Latin American and Caribbean countries have been on an expansive trend. Of Japan's trade with Latin American and Caribbean countries in 1989, Japan's imports totaled $8.87 billion (6.7% over the preceding year), and its exports amounted to $9.38 billion (0.9% over the preceding year). Japan's direct investments in the region totaled $36.9 billion as of the end of March 1989.

Recently, Latin American and Caribbean countries have high hopes for Japan's cooperation and investment as they make efforts to revitalize their economies through introduction of foreign investment as well as trade expansion. In response, Japan has taken steps to boost economic interaction with these countries, and various opportunities of exchange have been set up both in official and private sectors.

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Note: Rio Group: A permanent consultative organization established in December 1986 by the Contadora Group countries (Mexico, Venezuela, Panama, Colombia) and by the Contadora Group supporting countries (Brazil, Argentina, Peru, Uruguay). Panama has been disqualified.

Note: Source: Latin American and Caribbean Committee of the United Nations

Note: The rate of inflation is 2,775% and the rate of economic growth is-10% in 1989.

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