U.S. and Latin American Relation: A review US and Latin American Relations: A Review

US and Latin American Relations

Review of U.S.-Latin America Relations: A New Direction for a New Reality, by Charlene Barshefsky and James T. Hill (2008), Council on Foreign Relations, Inc.

Thesis of the supporting points of the article

This article takes into account the current state of affairs in Latin America along with the opportunities and challenges that govern the relations between the U.S. and Latin American society in general. Latin America has in the recent past adopted many of the democratic values that are the norm in the governance of the U.S. There is increased democratic space and a wider scope of economic activity. Many of the Latin American countries are in full pursuit of these changes to strengthen their democracies, expand economic space and deliver better service to their citizens.

It is noted that Latin American nations are faced with several daunting challenges in the course of integrating into global markets. Such challenges are of great significance to the U.S. The economic and social ties bind the U.S. and its future to the stability, development and well-being of the entire region. This is not about attempting to exhaustively study the U.S./Latin America policies relations. It does not even delve into or analyze the long standing bilateral relations between the two entities. It does not seek to pursue any single U.S. approach to the complexities of Latin America with a single dominant position or idea.

This article only seeks to expand on four critical areas it identifies as important in the ensuing developments. It also highlights four relationships it deems strategic that attract special focus from the stakeholders. Inequality, poverty, security, energy security and human mobility pose serious challenges to the people of the region and for the relationship between the U.S. and Latin America. The mentioned factors are at the heart of the U.S. policy of promoting democracy, fighting narcotics trade and distribution and economic expansion strategies. They equally touch on fresh issues of policy that arise from a wider general integration of the western society. The task force recommends stronger U.S.-Mexico and Brazil relations. The U.S. is also called upon to redefine its relations with Cuba and Venezuela.

If the U.S. intends to leave a mark, it must pursue its policies by implementing the recommendations provided in this paper, i.e. by helping the Latin American countries build and strengthen their democratic institutions. These institutions will in turn help these countries counter some of the challenges mentioned in this paper. The U.S. should therefore work collaboratively with multilateral agencies and organizations such as the World Bank, the IMF, Inter-American Development Bank, IFC, and Organization of American States (OAS). The continued cooperation with civil society groups will give rise to home-grown solutions that will be easily accepted and adopted by the populace. The end result will be that the U.S. policy goals will also have been satisfactorily achieved even as the Latin American people will be benefitting from the cooperation.

Improving the lives of Latin American people and strengthening their institutions is a rather ambitious goal that demands for long-term strategic plans from the stake holders and more so from the Latin American society. The role of the U.S. in so far as it supports the efforts is significant. Expansion of its policy and focusing on strategic partnerships in the region will promote the interest of the world power's interests and bolster stability, prosperity, and security in the entire hemisphere; therefore, this article argument is in support of the thesis.

Part 2: Evidence is drawn from two primary and four secondary sources.

Data is drawn from the Economic Commission of Latin America and Caribbean (ECLAC Statistical Yearbook, 2007) for comparing the so called 'lost decade' of the 80s and the dismal economic growth rates of the 90s. The ECLAC data is collected by means of surveys. Through the data, the authors perceive that the economic performance of Latin American countries in the 21st century has been strong. The regions recorded a 5-6% growth in 2007; and over 4% for the fourth year in continuum. That was noted as the strongest economic growth yet in the region since the 70s.

In their evaluation of the economic relations between Latin America and the U.S., they have used a study by Hornbeck (2007) to examine the current trends. The data from Hornbeck...

The authors deduce that from 1996, up to 2006, the U.S. exports grew by 139%, compared to a growth of 96% with the Asian partners and 95% for the European Union. The U.S. exported goods worth $223 billion in 2006, compared to goods worth $55 billion to China. Moreover, Latin America is the largest source of oil for the U.S. It accounts for up to 30% of the imports as compared to the 20% it gets from the Middle East. Disconcertingly, Latin America also happens to be America's largest supplier of illegal narcotics. The effect of narcotics and the fact that the U.S. has been experiencing a rising demand for labor force, have combined to lead to heightened rate of migration from the region to the U.S.
The author uses Gullermo et al. (2006) publication to demonstrate the effect of poverty and economic imbalances on the Latin American People and their countries in general. The author infers his deductions from well documented surveys and concludes that economic inequality, poverty and its effects have hampered the efforts of the Latin American governments to deliver effective services to its people. Public security continues to remain a serious concern among victims, affected by the cycle of poverty and economic inequality. The World Bank estimates that a decrease of 10% in the levels of poverty can push up economic growth by a percentage point. The converse is also true. The reverse will also reduce investment by up to 8% of the GDP. The authors use Tejerina et al. (2006) to explain the vulnerabilities that face the Latin American countries and the people. For instance, it is stated that the people of the region have been marginalized in terms of accessing financial services. Only 14.5% of the poor people have a savings bank account. Only 3% of these people have access to credit from some form of financial institution. This scenario inhibits the poor from owning any assets, leveraging their abilities and entrepreneurial skills, or to even manage risks efficiently. Tejerina et al.'s work is a collection of papers that draw from a previous review. The authors point out that the central issue in Latin America is lack of resources. The authors have utilized the OECD (20006) report that highlights Latin America Economic Outlook. The report draws inferences from data review of relevant and reliable authorities. The author also points out that Latin American Tax system needs to be reformed. The tax systems are reported to be regressive. There is a large informal sector; mainly, the ineffectual tax system leads the lack of financial resources the government needs to fight poverty, though there are other factors, too. The Latin American tax system over-relies on VAT. There is no mix of corporate income taxes, personal and property taxes. The situation is worsened by poor collection margins. Latin America collects only up to 17% of its GDP in taxes posited against OECDs target of 35%.

The author bases his arguments on the work done by Caulkins (2005) (on antinarcotics). The report states that the narcotics farmers in Latin America balance out the demand and supply by growing a lot more that the demand, because they know that the authorities will eventually catch some of it and destroy it. Caulkins refers to the U.S. drug policy and problems, using policy materials and literature. He argues that there is, really, no need for domestic enforcement for mature market of drugs such as cocaine; since addicts go an extra mile to get their supply. He suggests that rehabilitation and treatment are more cost-effective than legal enforcement at source country eradication.

Part 3: Opinion on the article

Latin America is ever more important for the U.S. that it has ever been. The region supplies the U.S. with oil and is a significant partner in the evolution of alternative fuels. The region supplies the U.S. with the largest number of illegal immigrants; whether documented or not. These factors combine to strengthen the ties as well as heighten the concerns about the vices.

Although the paper dilutes the days of a big brother dominant role in the affairs of Latin America, it is still evident that the U.S. is still a very important player in the region. The region has acquired other trade partners over the time but its partnership with the U.S. cannot be wished away. It seems to be shaping its future in a lot more ways than it has ever done in the past.

Latin American countries have done well in as far as adopting the U.S. led initiatives for development but they face numerous challenges. There is a clear expansion of the democratic space; the populations…