Latin America’s Quiet Revolution
An unprecedented political and economic transformation is under way in most of the region.
Interesting reading on the current economic trends in Mexico and other Latin American countries.
… From 1929 to 2000 a single party, the Institutional Revolutionary Party (PRI), monopolized political power. After decades of corruption, economic mismanagement and arbitrary actions against the property rights of citizens — which included the expropriation of the entire banking system — the PRI was finally forced from power in 2000, when voters elected Vicente Fox, the presidential candidate of the center-right National Action Party (PAN). Voters again elected a PAN candidate, Felipe Calderón, in 2006.
Since 2000, PAN governments have enacted reforms that have enhanced the rule of law by establishing the legal principle of innocent until proven guilty, mandated government transparency through a freedom of information act, eased access to credit by increasing competition in financial services and encouraged homeownership via reforms to contract and banking law. Some sense of Mexico’s transformation can be gleaned from one fact: In order to run competitively in the 2006 election, leftist Andres Manuel López Obrador had to jettison most of his left-wing stances during the campaign in order to be competitive with the PAN — and he lost anyway.
Recent reforms have also encouraged competition in financial services. As a first step, the government allocated charters to nonbank financial intermediaries that could make housing and automobile loans. As a second step, it granted bank charters to retail giants, including American-owned Wal-Mart, thereby allowing families of modest means to open accounts and obtain credit to finance the purchase of consumer goods. The bottom line: Living standards, as measured by infant mortality rates, life expectancy and years of education, have all improved in Mexico over the past decade.
The Mexican state is weak when compared to the U.S., but incredibly strong when compared to places in Central Asia or Africa that are usually called failing states. There are no foreign troops on Mexican soil. There is no martial law. Garbage is picked up, streets are swept and children go to school. Middle-class couples take weekend getaways, and drive there on highways as good as those in the United States. After falling for a decade, Mexico’s homicide rate increased in 2008, because the Calderón government courageously decided to take on the drug traffickers. If it keeps rising, it may soon be as high as that of…Louisiana.