February 18, 2014

WALTER RUSSELL MEAD: Lefty Meltdown Leads Latin Revival.

Venezuela, Brazil and Argentina are languishing in differing shades of turmoil, steadily losing ground to regional underdogs. The Pacific Alliance, an historic trade agreement between Mexico, Peru, Chile, and Colombia (and coming soon: Costa Rica), has the potential to recolor Latin America’s economic map and introduce some new regional powerhouses to the world stage. . . .

The newly formed bloc is made up of Latin America’s fastest growing economies. These states boast the region’s most competitive, business-friendly economies and the lowest inflation rates. Current transactions between these countries represent a mere 4 percent of their total trade; the potential for increased financial cooperation is immense. They have already eliminated 92 percent of trade tariffs.

The Latin Lefties are none too pleased with the new arrangement. Bolivian President Evo Morales called the alliance a Washington-led conspiracy. Brazil’s Lula and Ecuadorian President Rafael Correa decried the Alliance as a neoliberal takeover.

But while these leaders sulk, their countries continue to disintegrate. Mass unrest continues to roil Venezuela; protestors are fed up with government corruption, media censorship, and a failing economy. An Argentinian inflation crisis threatens economic disaster. Brazil, which the WSJ called a “wilting giant”, faces yet another year of economic contraction. On top of that, the country’s 2014 World Cup preparations are foundering and civil unrest is growing more belligerent (and then there’s Brazil’s upcoming summer Olympics preparation to worry about).

Yes, their performance has been poor. A free-market approach would do better, but — as with here in America — a free-market approach offers less in the way of graft and self-importance to the political class.