Francisco José Moreno and Alejandro Eggers Moreno
Wednesday, Aug. 28, 2002

A basic requirement of war is to secure one's flanks. While engaging the enemy at the "front," one's sides and rear become vulnerable. This vital military principle is as important today as it has ever been.

As the U.S. battles terrorism in Afghanistan, Pakistan, the Philippines and at home, frets about China, Iran and the Middle East, keeps North Korea in check and prepares for a potential battle with Iraq, it is leaving its southern flank – Latin America – virtually unattended.

Crisis seems endemic to Latin America, so it is somewhat understandable that under present world conditions America has paid so little attention to what is going on down there. This is unfortunate, and dangerous, because there is a tidal wave of change sweeping the area that threatens American political influence and economic interests, and that, if not checked, will drag in the U.S. militarily.

The whole continent is in turmoil.

Bolivia is turning away from American-sponsored anti-drug and free market policies and has just vested considerable political power on a coca grower turned politician.

In Peru the government is suspending the coca eradication program that was one of the few successes of the U.S. war on drugs, and its president has been forced to make a cabinet shift away from free market policies.

In Colombia, where the lines between drug trafficking and warfare have become impossible to disentangle, a new president advocates an all-out attack on well-entrenched guerrillas which, if supported by the U.S., will sooner or later lead to direct American involvement.

Ecuador, highly unstable politically, is beginning to provide the setting for confrontations between Colombian guerrillas and their paramilitary enemies.

Venezuela, America's second largest foreign oil supplier and next-door neighbor to Colombia, went through a failed coup last April and is now on the verge of civil war.

Beyond the Andes, Brazil, the largest economy in the region and unquestionably the most important country in South America, has seen its currency, the real, reach an all-time low against the dollar, its stock market sink to depths that indicate a massive exodus of investors, the outlook for its future downgraded by Moody's with the accompanying fear that it might follow Argentina into default, and the surge in opinion polls of two leftist presidential candidates in the forthcoming October election.

Argentina, at the southern end of the continent, appears to be unraveling entirely and taking neighboring Uruguay down with it.

Any one of these crises by itself, with the exception of Brazil's, would not necessarily ring alarm bells. All of them, however, are occurring simultaneously. They share the same causes and they are moving in the same anti-American, anti–free market direction.

Even more importantly, modern technology allows their chief instigators to easily link up with groups and movements in other parts of the world that share similar anti-Western views. This deserves much more attention than it has been given.

The present turmoil in Latin America has resulted primarily from the measures mandated by the United States, directly and through international agencies, that gave a free rein to predatory investment without regard for their effects on the real economy, on social stability, or on their inevitable political blowback.

The architects of this policy, which was uncritically adopted after the collapse of the Soviet Union, acted more as hawkers for financial interests than as statesmen or responsible advocates of market economics; they didn't heed Milton Friedman's warning that "there is an intimate connection between economics and politics."

This imposition has decimated the flourishing middle classes of Argentina and Venezuela, threatens that of Uruguay and has thwarted the growth of middle classes in the rest of region.

Ultimately, the equation is a simple one. The United States, with multiple commitments and vast but limited resources, needs allies in other countries to keep those countries politically friendly and economically engaged. It is the middle classes of those countries, as they grow and prosper, that increasingly share American values and interests, and serve as reliable allies. Weakening this middle class jeopardizes U.S. security.

What made Latin American a dependable partner during the Cold War were the anti-communist and pro-American feelings of its middle class. The opposition of the professional and local business people is what kept the area from responding, despite pressing internal problems, to leftist anti-Americanism or to Che Guevara's call for a regional insurrection.

The United States, in turn, did not force them to structure their economies for the benefit of international banking interests and a handful of local individuals.

If the recent decision to bail out Uruguay with a bridge loan of $1.5 billion and the conciliatory remarks of Treasury Secretary Paul O'Neill concerning Brazil are simply window-dressing measures, if they do not signal a willingness to recapture some of the former wisdom and flexibility of American policy for Latin America, the U.S. may find its southern flank under attack.

Francisco José Moreno, Ph.D., is President of the Center for Strategic Assessments, Agoura, Calif.; former Vice-President for Latin America of Philip Morris International; former Chairman of the Political Science Department, New York University; Former Lecturer of Economics, UC Berkeley. He has written three books and over 30 academic articles.

Alejandro Eggers Moreno is Vice-President of the Center for Strategic Assessments, Agoura, Calif.

E-mail: censtas@aol.com
Fax: 818- 991-9848

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