Gonzalo Sanchez de Lozada, the recently-oustered President of Bolivia has an impassioned editorial in the Washington Post asking Bolivians to turn away from the same policies that ruined many other Latin American countries.
Last month, as mob rule overwhelmed respect for Bolivia’s democratic process, I became the latest democratically elected Latin American president to be forced out of office. Now that the riots have abated, Bolivians stand at a crossroads: on the one hand, a path that leads toward democracy, development and peace; on the other, the dead end of populism, protectionism and strife. Which path they choose has profound implications, not only for Bolivia but for all the hemisphere.
The challenges my country confronts are many and complex. Centuries of exploitation and inequality have marginalized indigenous people who constitute most of the population. Our mountainous, landlocked terrain poses obstacles to transport and trade. The toll of poverty is magnified by the gulf between rich and poor. Recently, five years of regional recession have taken unemployment to double digits.
These difficult problems help explain why Bolivia’s poor are angry, and why populists’ easy answers hold appeal. But pandering to people’s fears and frustrations is no substitute for leadership. Bolivians need solutions that will change their lives for the better, based on the realities of interdependence, not romantic visions of national self-sufficiency.
Bolivia faces an important crossroads. The leaders of the anti-democratic junta, Evo Morales and Felipe Quispe represent an ideology that would plunge Bolivia into the chaos that de Lozada rescued the nation from a decade ago. A return to isolationism, protectionism, and xenophobic nationalism would ensure that the Bolivian economy would collapse, violence would increase, and Bolivia would be stuck in a position where another restoration of democracy could take decades. The human toll of such a process could be enormous.
Bolivia must clamp down on the illegal drug trade (which helped finance and support de Lozada’s ouster), embrace free and open trade to offer new opportunities for Bolivians, and continue working to free the natural gas resources that could fuel a new and prosperous Bolivia. De Lozada quite correctly states what the consequences of failure could be:
This dark scenario could get even worse. The eastern states of Bolivia sitting on natural gas wealth may resist being shackled in poverty. We might even see a push for secession and a devastating civil war. Such chaos in the continent’s heart would spread beyond Bolivia’s borders, destabilizing its neighbors and disrupting the region’s economy. Taken to the extreme, Bolivia could become the Afghanistan of the Andes, a failed state that exports drugs and disorder.
The United States can help by expanding NAFTA into a Free Trade Area of the Americas (FTAA) that would increase opportunities for all in Southern America by opening new markets for US goods and allowing South American imports to enter the United States. Just as NAFTA helped the United States gain job-creating opportunities, an FTAA would have a similar effect. However, the Bolivians must also decide to support free trade rather than engage in the dead end of isolationism and protectionism.
The stakes are high for the Bolivian people. They must make the right choices rather than embrace the dangerous ideologies of the past that would plunge Bolivia into yet another long national nightmare.
NAFTA has created has helped the US gain job-creating opportunities? 3.2 million would disagree, minus 120,000 new store clerks and French fry cooks of course.
Civilian employment 1993: 120.3 million
Civilian employment 2001: 135.1 million
So somehow the job market managed to expand by nearly 2 million jobs per year for almost a decade under NAFTA, yet somehow NAFTA cost jobs. Furthermore, considering that the manufacturing sector gained 700,000 jobs between January 1994 and January 1998 it is entirely clear that the only “giant sucking sound” were the arguments of the xenophobic protectionism crowd.
You’re attempting to artificially correlate two disparate phenomena. By the time NAFTA took effect, we were in the midst of the longest stretch of economic prosperity the nation has ever experienced. Since American companies were making money, it made little sense for them to pursue cheaper labor south of the border.
Now that more traditional economic cycles have brought us back to Earth, however, NAFTA is living up to the low expectations that the “xenophobic protectionism crowd” projected. Companies are losing money and looking for ways to cut costs….and lo and behold, NAFTA has provided them a sweetheart opportunity to do so. With economic growth forecasts unlikely to return us to the days of the late 90s miracle, NAFTA’s degenerative effects are likely to become increasingly visible in the years to come. I used to be of the mind that globalization would create a net surplus of jobs, even though it would obliterate necessary manufacturing jobs. I now believe globalization will create a net deficit of jobs as outsourcing is expanding to ever-more industries.
Except if you’d read Robert Reich’s piece, he notes that the loss in manufacturing jobs is happening *everywhere*. If your argument were true you’d see A:) a dramatic increase in foreign investment in the Third World B:) a similar increase in Third World employment as jobs from the developing world landed there.
Neither of those are the case, therefore it cannot be true that NAFTA is causing an exodus of jobs. Because NAFTA only includes the US, Canada, and Mexico, you’d see a commensurate increase in Mexican employment with the decrease in US employment. Instead, the rates of unemployment are decreasing together. NAFTA is not the cause of lost manufacturing jobs, a global economic slowdown and a long-standing trend towards more productivity is.
I’m a Democratic supporter of NAFTA and free trade in general, and also a huge supporter of the weaker economic states involved in such agreements exercising their rights to walk out on unfair or inequitable terms, a la Cancun.
Free trade, properly administered and structured, is a good thing in most cases. NAFTA has environmental protections that FTAA doesn’t–FTAA states should fight for these, as should the US independently. Labor has to be able to move almost as freely as capital. My biggest worry is that the collosal failure that is US drug policy will hinder either the movement of labor or of capital, and these agreements will be turned into weapons of economic warfare as opposed to mutually beneficial alliances.