Monday, October 25, 2010

Latin America from on the ground

I spend the last couple weeks in Latin America and thought I'd provide my thoughts on a few of the countries I saw. Some of the lead-ins are going to sound like something out of a Thomas Freidman column. Please don't take that as an endorsement of his style, content, or being.

I was in Sao Paulo last week and something occurred to me. These folks have a long way to go, but they are making progress. I was staying at a fantastic Hilton is what was a decidedly business district (the adjoining mall was closed on Saturdays and Sundays) thinking up new words for large, complex topics and decided to take this picture out my window.

It's a little bit hard to see, but notice the rising favellas on the hill. I was in Sao Paulo and even as I was ensconced in a fabulous hotel, I was advised not to wander too far. This is the juxtaposition of a place like Sao Paulo. Barely more then a stones throw away from Brazil's world trade center (in the foreground) was a favella. Now the government is investing heavily in this location and I would wager the days are numbered for the particular favella.

This was a theme throughout the Latin American cities I visited in the past few weeks. There are a growing number of haves, but a persistent number of havenots as well. Of course, different governments have embraced economic policy. The great contrast being between Chile and Brazil (among the countries I visited).

I was talking to a businessman in a five star hotel in Santiago drinking a pisco sour (which I was told originated in Chile) he spoke of how the country has been dealing with some issues, both short-term and long term. In the short-term the country had been dealing with a massive earthquake and the mining disaster. In fact, as we met Chilean news had minute by minute coverage of the miners with the countdown graphic as they road the Phoenix to escape the cavern that had been their prison for 2 months. Despite this, he remarked how proud his country was. They had dealt with both problems with aplomb, in his estimation, and it seemed to be validation of a system of governance and economics that allowed Chile to do better then many countries during the recession.

Of course, this prompted the long-term issue. Chile suffers from a post-Pinochet identity crisis. As the liberal, Chicago school economic policies of the Pinochet regime bear fruit Chileans are put in a weird position. Can they applaud some of the policies while deriding the man? It is a whisper on the lips of many successful Chileans, something alluded to but rarely said allowed. The mention of Pinochet can still induce a visceral reaction among many Chileans, but it is becoming increasingly clear that the economic policies and institutions his regime put in place have positioned Chile well to move past a commodity dependent economy. Of course challenges remain, and they haven't made the transition away from commodities yet. Many of the miners broke through to the surface and immediately called for new mining safety regulations to prevent the kind of accidents they fell victims to. They weren't martyrs, but messengers and they brought their message at the point of greatest resonance with the population. The government response remains to be seen.

I really liked Peru, the people, the city of Lima, the food, and the pisco sours (which I was told originated in Peru). It, like many of the cities in Latin America is a city of contrasts. Consider this picture of the tourist-y upscale district of Miraflores.

And then consider this shot of a village about 30km away near the Pachacamac ruins. As much as I loved Peru, on statistic that I had heard shocked me. I had read Hernando De Soto's The Other Path sometime ago for grad school and he talks extensively about the need to bring the informal economy into the government fold. He talks about valuing ownership, and he presents all this as a way to combat the ideology of the leftist terrorist group The Shining Path.

Peruvian President Fujimoro embraced many of the policies and indeed The Shining Path was largely marginalized. The streets of Lima were some of the safest I walked in the region. And yet I heard that 60% of the Peruvian economy is estimated to be informal. This is the largest percentage in Latin America.

So those are just some random thoughts about a few of the countries I visited. It's an amazing region with amazing people and history (and food: chicarron, feijda, ceviche). All my observations are amateurish reflections from 4 and 5 star hotels, but for what it's worth, that's what I saw and thought.

1 comment:

Colin said...

Thanks for the interesting post. Chile, which regularly ranks in the top 10 on various indices of economic freedom, is an example that its South American neighbors would do well to emulate. De Soto's "The Mystery of Capital" is one of the best books I have read.