Who Needs Democracy?

LONDON — London. -- The latest political scandal from Mexico brings allegations of phone tapping and the threatening of political opponents. Reports from El Salvador tell of continuing wrestling at the U.N.-sponsored peace negotiations. Together, they are two reminders of how politically stunted the concept of democracy remains in much of Latin America.

Washington has heaped plaudits on Mexico's remarkable economic and fiscal restructuring under President Carlos Salinas de Gortari. But it continues to overlook the fact that to stay in power his government relies, as its predecessors did, on force, intimidation and gross electoral fraud. And that the poor have barely seen any benefits from the economic reforms.


In Central America proper, the Bush administration, having made the good decision to face the fact that the contras of Nicaragua had brought nothing but a slow-motion Bay of Pigs, then went on to deal with Gen. Antonio Noriega's narco-corrupted regime in Panama by overwhelming instant force, breaking international law and leaving behind it a situation which, if it weren't so sordid, would be laughable. The grossly overweight puppet president spends most of the time with his young bride in the bedroom, while the drug traffickers play their usual game and the economy, including the once-profitable canal, limps.

President Bush, with Panama as with Iraq, has showed himself apt at lancing boils, but he appears to forget to disinfect and bandage them after.


The economic squeeze is most threatening the new Latin democracies, yet there is not even a pretense at assistance. The Latin democracies can't go on tightening their belts. Most of them are in the eleventh year of recession, and no democracies, the more so young ones, can take that degree of battering.

While the Latin debt problem is the responsibility in fiscal terms as such of European, Canadian and Japanese banks and governments, it is inevitably Washington that has set the negotiating tone and initiated -- or vetoed -- initiatives to deal with it. This week's meeting in Washington of the financial big powers -- the G-7 nations -- confirmed yet again that only the very poorest, the African countries, are likely to be given a reprieve.

Washington appears not to understand that if one believes that democracy in Latin America is the door opener to both political and economic progress, one must nurture it, care for it, and keep it germ-free.

Yet Western financial capitals persist -- as they no longer do with politically-favored Poland and Egypt -- in refusing to write off a substantial portion of the massive debt, even though in practical financial terms, given the remote likelihood of their ever being repaid, it is not worth very much.

This indeed is both the paradox of debt and the heart of the matter. The converse is also true. The more liberal western governments and banks are the more chance there is of growth re-starting, political stability enduring and the banks being repaid at least something.

Despite the return of democracy to the continent in the last decade, the basis of rule remains power, not law. Entrenched interests, business, the official labor unions and, not least, the military, continue to wield quite disproportionate influence on the local treasuries. However much their countries are squeezed, these people do a good job of protecting their own corners.

When the International Monetary Fund and the World Bank, acting on the consensus in banking circles, order economic retrenchment with wage freezes and currency devaluations, the burden is shifted almost entirely onto ordinary people -- not just the poor, but the young middle class that began to emerge in the 1960s and '70s. Many professionals and young entrepreneurs have fled to the northern countries, and the unorganized urban proletariat and the peasant class, increasingly desperate, either become fatalistic or, as in Peru and Columbia, join nihilistic guerrilla movements.

How is Washington supposed to deal with this? This is local politics, after all. There's the rub. Latin America's big trouble is that Washington does interfere all the time, and when it does not, Latin Americans assume there is a purpose to its not interfering. If the U.S. can extend the direct arm of its influence to Panama, Nicaragua, El Salvador, Mexico and Peru and, not that long ago, to Chile, making, breaking or just profoundly influencing governments, and today calling most of the important shots on financial reform, then everyone knows instinctively that when it chooses not to act directly, it does so for a reason.


For the first time in its history, Latin America has to find a way to couple democratic design with economic growth. It cannot do this under the present economic regime. The life blood is being squeezed out of Latin America; poverty is deepening, and now a plague of cholera is sweeping from Peru westward across the continent.

The buck stops in Washington, in George Bush's office. The policy should be the same as it is for Poland and Egypt -- debt relief.

Jonathan Power writes a column on the Third World.