Transformation in the Americas

By:James T. Polsfut Issue: Biennial of the Americas 2010 Section:The Americas Roundtables Transformation

The last few decades have provided more than their share of headline-grabbing events. Some have been magnificent, such as the fall of the Berlin Wall in 1989, others tragic, like the terrorist attacks of September 11th or the earthquake in Haiti earlier this year. These moments captured the attention of millions across the globe, and have in many ways shaped the world in which we live today. And yet in this new reality of the ten second sound byte, where dramatic incidents from around the globe briefly punctuate our airspace and then quickly disappear to make way for the next latest story, something is also lost. One’s ability to stand back and get perspective on developing trends, for example, is hampered by the barrage of information. And many of the most important, most vital and most enduring stories of our time remain untold because they don’t fit neatly into the sensationalist formula of mainstream media.

The remarkable development of the Western Hemisphere and Latin America in particular, is one such case. Home to over 900 million people, the Western Hemisphere accounts for over 35% of the world’s GDP. By 2020, two dozen nations in the region will be independent from Spain and Portugal, principally, for more than 200 years. The Americas is synonymous with an abundance of natural resources, from oil to gold to copper, as well as the shared experience of European colonialism. Perhaps most importantly, almost all nations in the region, with a few notable exceptions, now have democratically-elected governments, making it one of the most pro-democracy regions in the world.

In spite of all of these accomplishments, far too little attention is paid to the Americas. In the words of Denver’s Mayor John Hickenlooper, the Americas are “like the beautiful girl next door who never gets noticed.” Or to echo the President of the Inter-American Development Bank (IDB) Luis Alberto Moreno, while the public has continued to focus on problems such as drug-trafficking and emigration, the region has undergone a quiet but profound transformation. Transformation It was in the spirit of shining light on the region that Denver launched the Biennial of the Americas, the purpose of which was to promote more collaboration and cohesion among the 35 nations of the Western Hemisphere. The Americas Roundtable dialogue series, one of the key components of the Biennial, sought in a sense to fill the gap between public knowledge about the Americas and reality by providing a forum to exchange ideas and brainstorm solutions to the region’s most pressing issues. It sought to profile through dialogue little known facts about our hemisphere. Canada, Mexico and Venezuela, for example, are the three largest oil suppliers to the United States (ahead of Saudi Arabia). Similarly, the first and third trading partners of the United States (Canada and Mexico) are also in this hemisphere. The whole notion of the Biennial was that with so much common cultural heritage, economic interdependence, and geographic proximity, it is time for us to sit up and take note of all that the girl next door has to offer.

When attention is appropriately placed on the Americas, what becomes visible is a region that is currently posting economic growth at twice the U.S. rate, that has seen major gains in the quality of and access to both education and healthcare, and that is experiencing the longest period of uninterrupted, stable democracy in its history.

Perhaps nothing explains better the great distances Latin America has traveled of late than the astonishing rebound it has made in the wake of the global international crisis. In contrast to past experience, Latin America was neither the cause of the crisis, nor did it become a victim of the oft-seen contagion effect from abroad. In fact, the region has weathered the global international crisis far better than its U.S. and European counterparts. On May 1, 2010, The Wall Street Journal observed, “For Latin America, whose economic volatility triggered countless international crises over the years, the financial mess heralds a role reversal. These days, it is the relatively robust economies of Latin America which are fretting about … the sickly Old World.” Brazil, the largest economy in the region, is set to grow 7% this year, more than three times the U.S. rate and five times that of the Eurozone. And while Brazil is certainly leading the pack, most other countries are following similar paths, with region-wide growth expected to top 4.5% in 2010.

In the view of Goldman Sachs, Brazil continues to be one of the world’s four key emerging markets, Brazil, Russia, India, China (or BRIC countries). With the United States claiming only 5% of the world’s total consumers, American and international companies alike are awakening to the fact that in order to continue growing and expanding, they must look to emerging markets such as Mexico, Colombia, Peru and Brazil.

The Americas are also enjoying an unprecedented period of sound democracy. The days of military rule, strong-man regimes and leftist revolutions seem at last to be coming to an end. And even in nations such as Venezuela, where populist leader Hugo Chavez has blurred the line between democracy and authoritarian rule, the regime is far less extreme than the days when Leftists of the 1970s and 1980s left their mark on nations such as Peru and Nicaragua.

This broad consolidation of democracy has ushered in a new era of collaboration and cooperation on a region-wide basis, as seen in everything from renewable energy partnerships to a coordinated response in Haiti. As economic power and political stability have grown, so too has influence in international organizations such as the International Monetary Fund and the G-20 (a group of twenty finance ministers and central bank governors). Brazil is currently battling for a permanent seat on the UN Security Council.

Extreme poverty, one of the factors that has typically held Latin America back, is also decreasing across the region. Thanks to macroeconomic stability and conditional cash transfer programs such as Bolsa Familia in Brazil, where 30 million people have escaped extreme poverty since 2000, and Oportunidades in Mexico, the gap between the poorest and the richest citizens is decreasing for the first time in generations. Between 2002 and 2006 countries such as Colombia, Peru, Mexico and Ecuador saw real poverty decline by more than 4%. And fewer than 2% of Chileans now live on less than $2 per day – a number comparable to Central European nations such as the Czech Republic and Hungary. This progress is encouraging, and it has also spawned new trends like an overall increase in the demand for secondary education.

Equally important is the fact that with the notable exception of Haiti, every country is on track to meet the standards for access to safe drinking water outlined by the U.N. Millennium Development Goals. Expanded access to healthcare has dramatically improved life expectancy, as well as maternal and infant child mortality. Communicable diseases are certainly still devastating in some rural areas, but chronic diseases such as obesity and diabetes are now the leading threats to health, as they are in most developed nations. Transformation

With so many positive signs of progress, the region seems poised for rapid expansion and an increasing role on the world stage. And yet in order for this possibility to be transformed into reality, the nations of the Americas must also aggressively tackle some of the endemic problems that continue to threaten its bright future. The Biennial of the Americas here in Denver was the first event of its kind; the first civicled effort to focus on the interaction and integration of an entire hemisphere.

Despite recent gains, poverty and income inequality continue to represent two of the greatest challenges for Latin America today. The average income of the wealthiest 20% of Latin Americans was between 10 (Uruguay) and 44 (Bolivia) times higher than the poorest 20%. And nearly 40% of Latin Americans still live below the poverty line. Trapped in an unforgiving cycle of poverty, with few resources and little education, millions of youth and adults end up turning to crime. Thus, lack of security and violence routinely top the lists of biggest concerns for those living in the region. These factors have transformed Latin America into the region with the greatest murder rate outside of Sub-Saharan Africa. Some cities in Mexico and Brazil now post murder rates higher than those of Iraq and Afghanistan. Sadly, violence is now one of the five leading causes of death in most countries and even more disturbingly, seven of the ten countries with the highest child murder rates in the world are found in Latin America.

Violence, like poverty, does not select its victims equally. Those that are young, impoverished, and living in urban environments are the most likely to be killed. And those who do survive find themselves unable to enter the formal job market and earn a living wage. “Our youth are not dying of lack of food, but of lack of opportunity,” says Rodrigo Baggio, founder of the Committee for Democracy in Information Technology (CDI), a Brazilian-based NGO. If Latin America is to emerge as an economic and political powerhouse, it must pay heed to the words of Inter-American Development Bank (IDB) President Moreno, “Violence and organized crime have become so pervasive in some cities that they threaten hard-won political and economic progress. To address this, governments must reform law enforcement and judicial systems. More fundamentally, they need to confront the staggering inequality and lack of economic opportunity that drive so many into lives of crime.”

Thankfully, there are concrete solutions to the problems confronting the region. Education is among the most critical. Latin America is approaching universal coverage and completion of primary schooling, but the quality of that schooling lags far behind the Organisation for Economic Co-operation and Development (OECD) countries, where average levels of education are as much as three times higher than in Latin America. Estimates show that workers in today’s knowledge economy require 12 years of formal education to ensure a decent standard of living and to keep pace with the demands of the market. If Latin America is to compete on an international level, particularly with Asia, where education is a top priority, teachers must be better trained, children must stay in school longer, and a particular focus must be placed on the education of girls, which has been shown dramatically to increase the standard of living for entire families. Transformation in the Americas

To secure the future of the Americas there must also be more intellectual exchange and collaboration among nations. And not just on a north to south basis, but south to north as well. Latin America has pioneered the use of fossil fuel alternatives for energy. In fact, energy in Latin America is some of the world’s cleanest. More than 65% of electricity for the region comes from hydroelectric sources, and it is also the world’s leading producer of sugar cane ethanol. Over ninety percent of vehicles manufactured in Brazil today are flex-fuel models, many of which are made by American companies such as GM and Chrysler. The U.S. and other countries could learn valuable lessons from these examples, and every nation in the hemisphere could certainly benefit from greater energy integration.

The impressive results of conditional cash transfer programs in Mexico, Chile, Colombia, Brazil and elsewhere could also serve as a model for poverty reduction in the United States. New York City has piloted a program based on these Latin American models, and other cities across the U.S. could do the same. In short, there is no shortage of innovations taking place across the hemisphere from which we could all stand to benefit if given the opportunity.

The Biennial of the Americas here in Denver was the first event of its kind; the first civic-led effort to focus on the interaction and integration of an entire hemisphere. And yet the notion that collaboration leads to progress is age-old. During the Summit of the Former Heads of State at the Biennial, former Peruvian President Alejandro Toledo noted that, “The Bill Gates of the world have not yet invented anything that replaces the chemistry of looking eye to eye, shaking hands and working together.” Organizers of The Biennial of the Americas couldn’t agree more.

James T. Polsfut is President of The Americas Roundtable of the Biennial of the Americas and President of the Cordillera Foundation, headquartered in Denver, Colorado.