Political climate in Latin America
During the 1980s and into the 1990s, many countries in Latin America adopted most of the policies associated with the “Washington Consensus,” including structural adjustment, privatization, and market and trade liberalization. The rising poverty rates in these countries over the past twenty years—despite their adoption of policies which the MDBs (among others) promoted as essential to economic growth, stability, and poverty alleviation—are a living testimony to the failure of these policies.
Thus, barely a decade after the Washington Consensus was instituted as the sure path to growth, ideas about a new Latin American development model, dubbed the “post-Washington Consensus” by some economists, began to circulate. The new model was based on greater attention to equity, improved service delivery to the poor, and the consolidation of democratic institutions and it caught on with Latin American voters sooner than it did with the region’s traditional political class or with their backers in the MDBs.
Partly on the strength of their questioning of neoliberal adjustment policies, a new generation of political leaders have been elected in Venezuela, Brazil, Argentina, Uruguay, and, most recently, Bolivia and Chile, raising hopes of more effective approaches to poverty alleviation among Latin America’s poor and forcing the IFIs to reevaluate their stance toward the region.
As the debate over the best policies and strategies to adopt for sustainable development in Latin America continues, the following remain among the most pressing issues affecting the region:
- Persisting lack of confidence by various sectors of the public in “democracy” and government;
- Persisting poverty, with high levels of inequality according to differences in race/ethnicity and gender;
- Inadequate or non-existent social services, including those related to health and education;
- High levels of violence and physical insecurity;
- Privatization of public utilities and public goods, such as water;
- Government concessions, awarded through non-transparent processes, for companies to explore and exploit natural resources in indigenous-majority areas;
- Incomplete decentralization processes that pass along decision making responsibility without a corresponding transfer of revenues from federal to state and municipal level governments; and
- Large debt burdens.