"Is Latin America Doomed to Failure?" by Peter Hakim, in Foreign Policy (Winter 1999–2000), Carnegie Endowment for International Peace, 1779 Massachusetts Ave., N.W., Washington, D.C. 20036.

The January coup in Ecuador was only the latest indication that Latin America is not living up to the high hopes entertained by democrats and free-market enthusiasts a decade ago. "Across the continent, democracy and markets remain on trial," writes Hakim, president of the Inter-American Dialogue, a Washington-based organization.

There had been good reason for the high hopes, he notes. Between 1978 and 1990, some 15 Latin American countries turned away from dictatorship and began holding elections. And in the late 1980s and early 1990s, nearly all governments in the region came to adopt free-market economic policies.

The average rate of inflation soon plummeted, from more than 450 percent to hardly more than 10 percent today. "Almost overnight, Latin America joined the world economy."

But meaningful economic growth, Hakim notes, has proved elusive, with the annual rate averaging less than three percent during the 1990s. That was better than the 1.9 percent average of the 1980s, but a far cry from the six percent of the 1960s and ’70s. Of 20 Latin American countries, only three--Argentina, Chile, and Peru--averaged five percent or higher annual growth during the 1990s, though three others--the Dominican Republic, El Salvador, and Panama--came close.

Mediocre economic performance is only part of the problem, Hakim says. Few of the democratic governments "are governing well." In most countries, basic democratic institutions--courts, legislatures, political parties, even the presidency--are weak, and in some cases, "barely work at all." Education is neglected: Only one in three Latin American children attends secondary school. Virtually every city "is far more violent and dangerous than it was a dozen years ago," Hakim says. The region’s homicide rate--300 murders per one million people--is twice the world average. In Guatemala, Colombia, and El Salvador, the murder rates exceed 1,000 per million.

Tired of all this, "ordinary citizens are losing faith in democracy," Hakim writes. In Latinobarómetro surveys conducted in South America and Mexico in 1997 and 1998, more than 60 percent expressed dissatisfaction with democracy, and nearly one in three indicated that they favored or did not oppose authoritarian rule. Peruvians and Venezuelans already have turned to more authoritarian leadership.

The Latin American picture is not all bleak, Hakim notes. Chile in the last decade has achieved six percent annual growth, slashed the poverty rate, and improved government services, and its democratic institutions "are growing stronger and more effective." Argentina [which last October elected a nominal socialist, Fernando de la Ruá of the centrist Radical Party, president] also "has made impressive economic and political advances since democratic rule was restored in 1983," Hakim says. Uruguay and Costa Rica have strong democratic heritages. Mexico’s economic prospects are good, though its political ones are hindered by its inexperience with democracy, deep political divisons, and extensive drug traffic, criminal violence, and corruption. Brazil, with almost one-third of Latin America’s population and economic activity, "is the wild card," Hakim says, with much depending on "the political skills and luck" of President Fernando Cardoso and his advisers.

Hakim is moderately hopeful. He expects that most of Latin America "will avoid disaster.... Most of the region’s political leaders and financial managers are betting on democratic politics and market economics and are struggling to make them work."