The essay is focused on the political, economic and cultural issues of Latin America. Many modern thinkers agree that Latin America has all the necessary potential to become a prosperous and highly developed continent. This region has an extraordinary diverse culture, rich natural resources, and lacks racial, religious differences which cause violence and armed conflicts all over the world. However, Latin America today is characterized by political and economic instability. Why does this happen? What are the deterrents of Latin America’s development?
The essay will study two political regimes (socialistic and neolibaral) and the problems the governments face in Mexico, Cuba, Colombia in order to find out positive and negative sides, achievements and ultimately to compare strengths and weaknesses of socialism and neliberalism. In chapter 1 the essay will examine the problems of the Mexican government in 2005 and suggest discussion of their causes; then in chapter 2 the essay will analyze the governments of Latin America which have been functioning for the past ten years and single out their democratic achievements. The next chapter of the essay will investigate the current conflict in Columbia. Chapter 4 will be dedicated to political economy, where the following terms will be defined: production, privatization, and foreign investment. Chapter 5 will study revolution in Cuba and its impact on foreign relations. At the end of the essay the major findings will be summarized and analyzed in the chapter of conclusion.
II. Chapter 1. The problems of the Mexican government in 2005
Jose Pinera (2003) in the article Latin America: A Way Out puts forward the hypothesis that the main deterrent of the whole Latin America is its strategy of an “orphan continent”. The region gave birth to liberators, such as San Martin, O’Higgins, and Sucre, who knew how to free their countries from Spanish political control, but until now the continent hasn’t produced the heroes who would know how to govern. Still, the political strategies of Latin America countries have many drawbacks which result in a low development, dependence of a country on international funds and donation, etc.
In 2005 the number of illegal Mexican immigrants from reached 11 million in the U.S. The main causes of this problem were poverty and governance. In fact, the regions with the poorest people produced the highest rate of migration. Still, Mexico had no laws prohibiting human tracking. Mexicans were free to travel across the country and cross its borders. On the other hand, this lack in legislature encouraged crime – children kidnapping (around 16,000 a year) and selling people abroad for sexual exploitation. Ashley Merryman (2006) in the article Immigration – How the Mexican Government is Creating a Parasitic Economy and Neglecting its Poor suggests that illegal immigration is the primary principle of Mexico’s social policy: “The fact of the matter is that the Mexican Government simply cannot afford to stem the tide of migration. In fact, it’s to their benefit to encourage it.” 
Mexico has a high rate of unemployed poor (3,6% in 2005) which every year are pushed towards U.S. With the help of illegal immigration Mexican government gets a three-fold advantage. First, Mexico simply gets rid of its poorest (as a result, poverty is going down) and the government does not have to make high expenditures on the programs reducing poverty. Second, the active political and social force which would express its protest against the government’s inadequacies is leaving the country. Third, remittances both legal and illegal are feeding Mexican economy.
In 2005 contributions made by Mexicans who live and work abroad made up $18 billion. Remittances are the second largest source of capital and constitute a considerable support of Mexican budget. Mexican government is slow to implement projects against illegal immigration of Mexicans to the U.S. More specifically, Mexican government rejected the plan proposed by U.S. to build a fence along the American-Mexican border. Relying in remittances, Mexican government worked out the program of voluntary investment into development of community infrastructure. In 2005 already 300 rural communities took part in this program. The government expects this figure to grow twofold in 2006.
Crime, armed conflicts and violence are widespread across the country. Domestic violence takes place in one out of three families in Mexico, not less than 8 percent of women are sexually-harassed in their workplace in Mexico City. On August 2005 CNN reported that that crimes devastated the U.S. counties bordering Mexico. Gov. Bill Richardson declared that the region “has been devastated by the ravages and terror of human smuggling, drug smuggling, kidnapping, murder, destruction of property and the death of livestock.” These problems resulted from governance, poverty and culture, and U.S. foreign policy. The U.S. bordering counties need more funds to protect their citizens from crime and illegal immigration, however, Gov. Bill Richardson pointed out that the reaction of the U.S. government was inert, in other words, this issue was addressed with “total inaction and lack of resources from the federal government and Congress.” Also Central America and Mexico Gang Assessment (2006) investigated the history of Latin America gangs and reported that due to American immigration policies, illegal immigrants before their deportation were incarcerated in U.S. prisons (for instance, the California Prison system). Some of the deportees borrowed many aspects of U.S. gangs and after their release established new gangs and mafia in the homeland. Poverty, weak ineffective corrupt police and judiciary system contributed to the high activity of criminals and gangs.
As a result crime and violence meet impunity by law enforcement. Unemployed marginalized young people constitute a flow of fresh force to gangs, which in return offer them alternative means to acquire goods and social acceptance. Gangs are involved in narco-activity, illegal activities, drug and weapon trade. Moreover, violence has been a part of culture of Mexican ancestors (human sacrifices and nourishing gods with human blood in the culture of Aztecs). The role of the government in solving the problems of violence and crime can be seen in the following: violent conflicts are caused by the destruction of different type of capital and insufficient government’s military expenditures. Also the inability of the state to decrease violence and crime resulted in considerable economic losses.
In addition, the abuse of intellectual property (IPR) rights in Mexico remained of one the biggest concerns of US foreign policy in 2005. This problem was mainly caused by Mexican corruption and poverty. According to the data provided by U.S. embassy “Black markets provide a significant source of employment in the informal sector, which accounts for up to 50 percent of the total economy.” Pirate production is sold at lower prices than its legal analogies and as a result it is more available to poor consumers. Mexican high levels of piracy and counterfeiting did not cease because were addressed with ineffective measures: minimal sanctions and penalties. Mexico has IPR laws and the government agency (The Mexican Institute of Industrial Property) responsible for their administrative enforcement. However, U.S. government has to admit that IPR laws are weakly applied and there are no programs which would facilitate their public understanding. Piracy and counterfeiting are making huge profits in Mexico, as a result the interested forces do not allow IPR suits in Mexican courts. This fact was evidenced by one of the official U.S. sources: “Mexican judges continue to reject cases involving IPR crimes, discouraging prosecutors from building cases. Some feel it is pointless to try cases since industry attorneys routinely cut deals with the infringing party before the judicial process is complete.”
Finally, because of its corruption and poor governance Mexico had human rights problems and problems of criminal justice system in 2005. According to the information provided by Human Rights Watch, imprisoned and arrested people faced ill-treatment and tortures. Law enforcement officials did not investigate the cases of human rights violations and do not prosecute those responsible. People, especially foreigners, were abused, extorted, reported sexual abuse, beating, and living in poor conditions. Although the president Fox proposed reforms of criminal justice system in 2004, in 2005 Mexican justice was still unable to provide justice to victims of human rights abuses and violent crime.
III. Chapter 2. Democratic achievements of the governments of Latin America
At the end of the twentieth century Latin America experienced economic crisis, caused mainly by external factors and domestic mismanagement. The countries searched the way out through the implementation of neoliberal approaches which favored investment, a free flow of trade, and state control reduction. In other words, Latin America countries are becoming more open in their cultural, political and economic dialogues with the rest of the world, and are trying to keep stability and order in their domestic affairs. This is a decisive step away from dictatorship, populism and bureaucratic authorization, and as characterized by many scholars and politicians it is a turn to democracy.
In the nineties the majority of Latin America countries elected civilian governments and liberated from military dictatorship. Chili was one of the last counties which returned to democracy. Its dictator Pinochet finally turned into a president though elected using military support. In the1990s Chili applied a neoliberal economic model which was based on the following: privatization of state companies, reduction of trade barriers, lessening of state regulation and domestic and foreign investment encouragement. Privatization expanded the capital of the country and liberalized economics. Reduction of trade barriers and investments increased competition on the market, raised the quality of production (modernization, introduction of new technologies and advanced methods) and created more vacancies on the labor market. As a result, production of goods was going up, economics started growing, per capita increased. Such neoliberal strategy was adopted in all the rest of Latin American countries except Cuba.
For instance, In Chili neoliberal economic model resulted in 7 percent growth of the country’s economics. Gradually, Chili started to reduce poverty levels, created middle-class, and provided its free-market with remarkable stability. Today Chili occupies the place of one of the most prosperous and competitive countries in Latin America. Today the degree of economic freedom of Chili is put in the same ranking where Australia and the United Kingdom are.
Also the progress of Mexico has been highly estimated by contemporary politicians and economists. 10 years ago Mexico was characterized by Mario Vargas Llosa as “perfect dictatorship”. Mexico joined the United States and Canada in NAFTA (the North American Free Trade Agreement) and this step resulted in many positive consequences. For example, inefficient state firm received buyers in other countries. The Mexico applied pension reform following the example of Chili. 25 million workers received a personal retirement savings account and became owners of financial asserts. Eight other countries of Latin America implemented pension reform and already 50 million workers have accumulated about $100 billion in their accounts.
In addition, due to the rules of neoliberalism, several nations, including Chili, started privatization of their social security systems. However, some neoliberal reforms were applied partially or with considerable limitations. For example, Mexico and Venezuela excluded state oil firms from privatization process. Also bureaucracies and government expenditures received much public criticism, though in real life they did not shrink rapidly.
For the past 10 years social changes in Latin America produced both winners and losers. For instance, the south Mexico became populated with Indian peasant who renewed guerrilla insurgency. In spite of the fact that social processes were very slow and full of contradictions, Latin America countries managed to reduce the level of inequality. Cuba, Costa Rica, and the nations of the Southern Cone, approached the standards of the industrialized world regarding to such indicators as life expectancy and literacy. As a result of industrialization and urban growth, a larger number of population became literate and had access to television. Mass media brought fresh and modern ideas from the United States and the whole world to both urban and rural communities, which resulted in higher environmental political and social awareness of masses and introduction of democratic concepts to common people.
Democratic process also occurred in the religion of Latin America. Surface to say that Roman Catholicism had been a dominating religious trend for the second part of the 20th century in Latin American countries. The influence of Roman Catholicism could be observed in the continued prohibition of abortions, birth control campaigns ect. Before the nineties Roman Catholicism had been conservative in many aspects and its power had been supported by the state. When dramatic changes took place in the state and the society itself, Roman Catholicism also underwent reformation. Catholic teaching and practice became more folk oriented and tolerant to other denominations. The revolution on Cuba inspired many priests and nuns to produce a new teaching – liberal theology, based on the synthesis of liberalism and religious faith. Some priests joined the guerrilla, some priests labored to raise mass consciousness concerning social injustice.
IV. Chapter 3. The current conflict in Colombia
Today Colombia faces the conflict between three major forces: the government, paramilitaries, and the guerrilla. In 2002 Pres. Andrés Pastrana Arango made several unsuccessful attempts to negotiate peace with the Revolutionary Armed Forces of Colombia. After the negotiations were broken off, the government began bombing the rebel-held zone.
The next president Álvaro Uribe Vélez applied a tougher strategy against paramilitaries, guerrilla and drag traffickers. He asked the U.S. for military aid to combat guerrilla and drag traffickers. Also Álvaro Uribe Vélez called on the United Nations for assistance in peace negotiations with right-wing paramilitaries and left-wing rebels. In 1997 Uribe declared national state of emergency and took the following steps to solve the conflict: emergency tax establishment, civil liberties suspension and increased funds for military expenditures. The president relied too much on military aid and implemented the politics which gave the military more latitude to fight the rebels. However, these measures did not stop the war, which in fact is a war against the poor who are defending their resources. Some politicians come to conclusion that the ongoing conflict in Colombia is just “a war on guerilla insurgents who are fighting to gain the basic necessities for survival, such as food, water, freedom from abuses, etc.”
Politicians and scholars single out a number of factors which produced a favorable background for the conflict. Brown  distinguishes between four main groups of factors: political factors; structural factors; cultural/perceptual; and economic/social factors. These factors comprise the following:
1. Political factors: dependence, interventionism, elite politics. First of all it concerns the strategies of the cold war, applied between the 1960’s and the 1980’s. The revolution in Cuba inspired to create the troops of the ELN or the M-19 of the guerrillas. These troops were trained and supported by communists. The United States also actively participated by training and backing the Columbian counterparts of the guerrillas. The United States provided the Columbian government with military aid and funds in order to fight the drug trade which was mainly the business of guerrillas. Many historians argue that this aid was aimed at two wars against drug trade and guerrillas as an active political force. The government of Columbia was weak and ineffective because some groups were “inadequately represented in the management of the government, the courts, the military, the police, political parties, and other state and political institutions.”
2. Structural factors imply the weakness of the state and intrastate security concerns. In Columbia the control of state was absent in many regions, the judicial system went on crisis, and corruption and administrative incompetence added to the whole deterioration. The safety of the citizens was much affected by demoralized armed forces and weakened government. Security problem induced Columbians to provide for their own defense. Private justice replaced the public one, and led to the creation of ‘security cooperatives’. ‘Security cooperatives’ armed to defend collectively because they realized that it was their right to act so when the state had proved to be unable to maintain public order.
3. Economic/social factors include discrimination in economic systems and economic crisis. Historically, economic crisis always accompanies an internal one. Economic collapse occurred before the civil war and prepared the grounds for unleashing armed conflicts. In contemporary Columbia economics is not stable as well. Peasants move to the rain forest driven by extreme poverty, and work there under the control of the guerrilla. Peasants do not have choice but to deforest the territory and to grow coca. In Columbia disadvantaged have unequal access to land and capital, which creates a huge gap in the standards of living. The distribution of resources is extremely unbalanced and the income per capita is very low. In addition, the illegal activities of the guerrilla are complicating the situation more and more. The guerrilla are involved in kidnapping and extortion, also they provide drug smugglers with logistical services in the areas controlled by them.
V. Chapter 4. Political economy
The terms of political economy applied in the current essay need to be defined. Below are offered the definitions of production, privatization and foreign investment.
Production in economics includes all the activities which are connected with the creation of commodities with the help of added value, imparting to raw materials utility. Production is aimed to satisfy human wants. Until the beginning of the 20th century production was the main thrust of industry. In the twentieth century marketing and sales became important since they transferred commodities from producers to consumers. Today production is called mass production, as it involves piercing together interchangeable standardized parts by workers. Mass production has increased the division of labor, and it allows hiring semiskilled or unskilled labor, which would learn while repeatedly performing small tasks in production of a commodity. Therefore, mass production often takes a form of an assembly line, or conveyor, in which a continuous flow of products is moving steadily forward completion.
Contemporary production requires large amounts of capital to purchase machinery, land, natural resources, raw materials, and labor. These are the primary factors of production which play a decisive role for the ultimate success of the whole enterprise. Modern economic theories add the factor of the entrepreneur who takes risks and organizes the forces of production. In order to make the expenses of mass production less significant, the entrepreneur may allow the participation of the capital of other individuals of organizations who will share the loss and income. The enterprise may be owned by state, by public and by a private person.
Privatization is a process of taking industry or organizations previously owned by state into public ownership. Privatization occurs with commercial and social objects. When a company is appointed for privatization, the government will issue shares which will be offered for sale to the public. Consequently, the company will submit to the shareholders, not to the government. There are main reasons of privatization, they are the following:
1) industry has had a period of stagnation of decline, and now it needs measures to reverse it;
2) it is in need of government direction and very important to economy;
3) it results in natural monopoly;
4) It produces service or good which will be sold without pursuing commercial profit as the only criterion for supply;
5) it is chiefly important to national defense.
Also privatization is a public ownership which will not allow gaining private profit extracted from labor. Privatization concentrates an economic power in the hands of society. For example, in Mexico privatization started in 1982, and for the period of thirty years 1,150 government-owned enterprises (all of the banks, a number of hotels and airlines, the telephone company (TELMEX), TV channels (TV Azteca), mining (Minera Cananea), sugar mills, fishing companies, theaters, steel companies and automobile assembly) became public.
3. Foreign investment
Foreign direct investment is investment in production made by the company abroad. This kind of investment is mainly used in developing and industrial countries. The goal of foreign direct investment is to utilize national resources on a local level. Foreign direct investment helps to reduce the cost of production either by employing local cheap labor or by placing the production of goods near their markets. Foreign investment is very effective if the trade barriers of the country hinder export. Sometimes, foreign direct investment additions the capital of the country, but very often the production is locally financed and the foreign company imports management skills and techniques.
As a rule foreign direct investment is criticized in both host and home countries. In the home countries trade unions claim that foreign direct investment is exporting jobs, while the analogous companies in the host countries complain that it is hard to compete with multinational companies which have advanced technologies and financial resources.
For example, in Mexico substantial private investment was necessary to expand and modernize of infrastructure, improve education, communications, and transportation. To encourage investment Mexico amended its laws and worked out favorable administrative procedures (The Law Regulating Article 27 which reserved oil industry to the state was changed in such a way that storage, transportation and distribution of natural gas were excluded from the definition of oil industry).
VI. Chapter 5. Revolution in Cuba
Cuba remains the only country in Latin America which did not apply neoliberal strategy in economics and chose its own way of social revolutionary development. The current political regime in Cuba was installed after the revolution in 1958. The revolution was predisposed by internal decay in the country. Castro was a candidate from opposing to Batista’s regime movement, who was supported by the U.S. However, the elections were aborted and Castro was imprisoned. When Castro was released he and his friends went to Mexico to prepare the plan of the revolution.
The revolution started on December 2 1956, when Fidel Castro and 81 combatants landed in Cuba. The Rebel Army quickly got increasing support of common people in urban and rural areas. On January 1, 1959 the revolutionary forces won a victory over Fulgencio Batista. After the defeat of Batista’s army, the two political forces remained in Cuba: The 26th of July Movement and the Communist party. While the 26th of July Movement had vague political plans and weak support, the Communist party assumed the dominant political position and became the party of the government. The administration of Cuba modeled itself on the Soviet Union and became the first socialist state in both Latin and North Americas.
In the first years of ruling the new regime eliminated the remained troops of Batista army and removed the organizations created by the old regime: associations of professional persons and farmers, political parties, labor unions. Instead, the government produced a number of new institutions: the National Institute of Agrarian Reform (founded 1959), the Confederation of Cuban Workers, , the Central Planning Board (1960), the Cuban Institute of Cinematic Artand Industry (1959), the Federation of Cuban Women (1960), the Committees for the Defense of the Revolution (1960), the Revolutionary Armed Forces (1961), the National Association of Small Farmers (1961), the Young Communists (1962), the National Union of Cuban Writers and Artists (1961), and others.
The next step of the new government of Cuba was nationalization. Cuba nationalized hundreds of millions of dollars of property owned by U.S. and private businessmen. It provoked aggressive measures by the U.S. government, in particular, a trade embargo, an attempt to invade by Cuban made by exiles at the Bay of Pigs on April 1961, and number of plots to assassinate Castro. The socialist regime and the dependence on the Soviet Union divided the Cuban society: hundreds of thousands of wealthy and skilled specialists immigrated to the U.S. Spain, and other countries. Some other countries (Venezuela, Dominican Republic, and Bolivia) tried to follow the example of Cuba and install socialism, but their unsuccessful attempts alienated Cuba from the rest of Latin America.
From 1963 ?uba underwent the period of ideological instability, which was accompanied by the attempts to diversify economy and acute shortages. The government of Cuba strengthened national defense by replacing militias with professional army. From 1965 to 1970 ?uba assumed the leadership role among the countries of the Third World. The conference of nonaligned nations was held in Cuba in 1979. Later, Cuba was appointed as the chairman and kept this position until 1982. Also, the ruling regime of Cuba carried out campaigns against bureaucrats and continued attacks on private property. Gradually, military officers possessed the highest ranks the party, industry, and in the government itself.
During the 1970s Cuba managed to improve material conditions, eliminate its bottlenecks and shortages, and break the wall of diplomatic isolation by establishing commercial, technical, and military relations with Latin America, the Soviet Union, the Caribbean, and the states of Africa. The political system was renewed and in 1976 a new Cuban constitution and electoral codes were adopted. Fidel Castro became the president of the State Council and of the Council of Ministers. In 1976 nationwide elections appointed municipal assemblies to elect the members to the National Assembly and to the provincial assemblies.
However, Cuba relied heavily on all political, economic, and social support from the Soviet Union, and when the last was dissolved it withdrew its troops from Cuba. As a result in 1991 Cuba remained without its strong ally, and its subsidies. Cuba suffered severe internal shortages mainly in all the spheres, which caused overall dissatisfaction and unrest in the country. In order to fight with the shortages, Castro declared the period of energy conservation, food rationing, and reduction of public services.
The Cuban revolution and the subsequent installation of the socialist regime was favored by two factors: 1) the considerable support by all the sections of Cuban society; and 2) the full elimination of the pre-existing state apparatus. Contemporary scholars and politicians note that still, notwithstanding the difficulties, Cubans are proud of their revolution and its achievements. In particular, Cuba conducted literacy campaign in 1961 established a strong social system (cheap medicine and education) and today Cuba has enough specialists in medicine, education, computers and various sciences which assist in the development of South Yemen, Angola, and Nicaragua. Also Cuban revolution raised general health and educational standards of the population in a short period of time. Cuban culture has reached a very high level and Cuban documentaries, Cuban posters and Cuban films, enjoy a justified reputation in the whole world. So, Cuban has two sides and can not be judged by economic looses and political isolation only. Though the revolution resulted in economic crisis, many scholars note that it “released popular and creative abilities of common people, on a scale which is unmatched either elsewhere in Latin America, or elsewhere in the Communist world.”
On the whole, the essay has studied economic, political and social processes which took place in Latin America. The appearance of the two different regimes – socialism and neoliberalism – was observed in the process of study. Due to the study it became possible to analyze the approaches of socialism and liberalism, and to find their strengths and weaknesses. As it was noted above, all the countries except Cuba followed the neoliberal path. The general achievements of neoliberalism include the following: economic growth at the expense of nationalization, privatization, industrialization and free-market. The growth of production was closely connected with investment (national and foreign), modernization of industry and unemployment reduction. In social sphere Neoliberal countries managed to create a relatively strong middle-class and provide with social security by implementing pension reform. Also the turn to democratization was noticed in the neoliberal countries.
However, while studying the examples of Mexico and Colombia great disparities and drawbacks were observed. The countries of Latin America can not achieve political unities in their governments, can not eliminate social and economic inequities; the countries are suffering from poverty and corruption. The weak governments can not control and regulate migration of its citizens, can not reduce violence, crime, have many problems in the area of human rights. The common problems of Mexico and Colombia are violence, crime, corruption and poverty, drug smuggling. In addition, Latin American countries are financially dependant on international funds and donation, on U.S. a assistance and military aid.
In the case of Cuba, as a representative of socialist regime, it was found out that this country has nationalized its economics, eliminated illiteracy, developed a strong social system (cheap medicine and education), raised general health and educational standards of all the population, achieved equality, and encouraged development in culture, medicine and science, strengthened political infrastructure and national defense and avoided armed conflicts, violence inside the country. The drawbacks of Cuban revolution are: weak economics, storages, strong dependence on the help of political allies, political isolation.
The two pictures described have similarities and differences. Both the sides are still developing and thus are much dependant on the international aid. Both the regimes have implemented nationalization and industrialization of their economies. However, the economics of Cuba is slowly developing and the production is insufficient. Contrary to this, the economics of the rest of Latin America is becoming healthier and more independent. But the chronic problems widespread in liberal countries: violation of human rights, violence, crime, drugs were not observed in Cuba. Cuba, on the other hand, has managed to build strong political and social infrastructures, defense, judicial and social system.
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