PCDForum Column #14 Release Date July 1, 1991

by Robin Broad, John Cavanagh, and Walden Bello

Washington is offering Latin American countries the carrot
of increased access to North American markets if they
continue repaying their debts and agree to a development
strategy that emphasizes private enterprise, removal of
trade barriers, and the opening of their economies to
foreign investment. Essentially, the Bush administration is
suggesting that Latin America can export its way to South
Korea or Taiwan status through the export-led growth
strategies–the same strategies that provided the framework
for the structural adjustment policies the World Bank and
IMF have imposed on dozens of countries in Africa, Asia
and Latin America.

A decade of experience demonstrates that such policies
damage environments, worsen structural inequities, bypass
popular participation and fail even in the narrow goal of
pulling economies forward. In the frenzy to increase
exports, countries commonly resort to the easiest short
term approach: unsustainable exploitation of their natural
resource base. Thus, timber exports have denuded mountains, causing soil erosion and drying critical watersheds.
Cotton, soybeans and other cash crops have typically
depended on polluting pesticides and fertilizers. Large
fishing boats have destroyed the coral reefs where fish
breed and live. Tailings from mines have polluted rivers
and bays and reduced the productivity of crop lands.

In Latin America, the major beneficiaries of such
policies have been the large U.S. banks. Since 1983, Latin
American nations have paid to creditor banks and institutions over $100 billion in debt service more than they have
received in new loans and aid. This has left them precious
little either for social programs or development projects.
The resulting declines in spending on social programs have
resulted in irreparable long-term damage to the health,
nutrition and education of those who fall below the poverty

This is not to deny the need for substantial reforms,
reduced government spending, and the appropriate use of
markets. At the same time, the lessons of the 1980s teach
that there are no shortcuts to development. Development
strategies will not succeed and endure unless they also
incorporate ecological sustainability, equity and participation as integral to their commitment to improved living
standards. The generalized failure of development during
the 1980s is a direct consequence of the neglect of this
reality by most governments and official assistance agencies.

This reality is, however, a centerpiece concern of the
new wave of democratic movements that are emerging in
Latin America–as they are in Asia and Africa–through
which millions of workers, farmers, women and environmentalists are demanding the right to define and control
their own futures. These movements reject the heavy
emphasis of free-market development on exports based on
cheap Latin American resources and labor. They focus
instead on the development of domestic markets and
recognize that the creation of effective consumer demand
depends on eliminating the severe inequalities that commonly depress the purchasing power of workers and
peasants. This type of market development depends
fundamentally on effective government action in such areas
as land reform, progressive taxation and advancement of
workers rights.

Building development dreams on cotton, timber,
minerals and other ecologically damaging exports is not
only unsustainable, it fails to ask the more fundamental
question of whom development should benefit. If foreign
exchange receipts are to benefit the common people they
must come not from the sale of primary commodities, but
rather from processed commodities, manufactures and
environmentally sensitive tourism.

Why should citizens’ movements pushing for a more
equitable, sustainable and participatory development stand
a chance in the 1990s? Much of the answer lies in the
extraordinary possibilities of the current moment.

For four decades, the Cold War reduced most development discussions to ideological arguments over capitalism versus socialism, markets versus governments, and
diverted attention away from non-ideological global
concerns such as environment, health and economic decay.
The dramatic end of the Cold War provides an opportunity
to move beyond sharply drawn ideological categories to a
more pragmatic assessment of the proper roles of government and the market. Such an assessment might allow us to
see that if there is to be a more unified and sound Western
hemispheric market, the marginalized millions of the
hemisphere must first become effective consumers and,
more important, central participants in planning their future.

Robin Broad is Assistant Professor at The American University.
John Cavanagh is a Fellow of the Institute for Policy Studies.
Waldon Bello is Executive Director of the Institute for Food and
Development Policy. Broad and Bello are also contributing
editors of the People-Centered Development Forum. This column
was prepared and distributed by the PCDForum based on an
article by the authors in Food First News.

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