After over a decade of big-picture talk on the need to open Latin American economies more to trade and investment, the Bush administration is shifting gears to promote the nitty-gritty of capitalism such as the creation of small businesses.
A blueprint for a new social policy for the troubled region is already being sounded out with governments as President George W. Bush prepares to join Latin American and Caribbean heads of state at a special summit on poverty in Monterrey, Mexico, on January 12-13.
Even though the summit will include a standard vision statement on poverty and corruption, Bush administration officials want governments to grease the wheels of capitalism and commit to a specific timetable to implement measures like boosting property rights for the poor and making it easier for them to get loans and start a business.
"It can't be the same old rhetoric, pie-in-the-sky statement of principals where we shed crocodile tears for (poor) people and then go off to our banquet," Roger Noriega, the assistant secretary of state for the Western Hemisphere and the administration's top diplomat for the region, told Reuters.
Noriega pointed out it takes longer to start a business in Latin America than in sub-Saharan Africa. In some countries in Latin America "they might as well have a moat around the bank," he said.
Previously, the United States suggested free trade, open economies, sound budget policies and the sale of inefficient state enterprises would usher in fast growth and, in a natural way, iron out Latin America's historic inequalities between the rich and the poor.
But the reforms have had only spotty successes as most of the region's economies ground to a halt in the past five years, a period that saw street violence overthrow democratically elected presidents in Ecuador, Argentina and, most recently, Bolivia.
Recent surveys also revealed growing discontent with the United States and its policies toward the region.
A 17-country survey on Latin American attitudes by Latinobarometro, a Chilean polling firm, found that only 53 percent of Latin Americans held a favourable view of the United States, against 67 percent in 2000.
"If natural allies ... are becoming disappointed, disenchanted, because the United States is not engaged as much as it should, then it's much harder for the United States to carry out its agenda on trade, democracy and security," said Michael Shifter, with the Inter-American Dialogue, a Washington think tank.
Many see the need for a new social policy in a region that boasts the world's worst income distribution, and where two out of every five inhabitants qualify as poor.
"Despite all the changes, the models of the '90s are being questioned and we have to find a way to do things better, to get more social dividends," Enrique Iglesias, the president of the Inter-American Development Bank (IDB), a Washington-based institution that lends for infrastructure and social programs in the region.
The Bush administration thinks this new microeconomic approach will go a long way toward improving the lot of Latin Americans, the way a deregulated capitalist economy flourished in the United States.
"Why are we wedded to a particular formula for fighting poverty? Because we think it works here," he says.
This is in keeping with the philosophy behind Bush's Millennium Challenge Account (MCA), which promises big increases in development aid for the world's poorest in countries that show good governance.
But the per-capita incomes of most Latin American economies are too high to qualify for MCA aid, even though the region has big pockets of very poor people.
This has led some to criticise the Bush administration for stinginess. "Latin America is a stepchild," says Rep. Robert Menendez, a New Jersey Democrat who is proposing a new $2.5 billion social fund for the region.
But Noriega says Latin America does not need more hand-outs.
The United States already transfers nearly $500 billion a year to the region through imports, direct investments and remittances that Latin American immigrants in the United States send to their families back home.
The second-generation reforms the United States wants "will take that half a trillion dollars plus of income and spread it out, and use it to prime the pump of economic activity ... in a natural way so that people can start to pull their own weight," he said.
The administration also wants the Inter-American Development Bank, the Washington-based World Bank-like institution that traditionally lends to governments, to make more money available for small companies.
Feedback from governments has mostly been positive so far as "a lot of people recognise these are common sense things," Noriega says.
But among the development community, some warn not to expect too much from this approach to fighting poverty, saying the region's unequal education system must also be addressed.
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