LatinFinance - Special Edition - August 2013 - 61

But for that to happen, many latin
american countries will also have to overcome a number of legacy concerns. While
bitterness over US political interventions
in domestic affairs over past decades still
rankles many nations, reverberations from
the so-called Washington consensus of the
1990s – the set of liberal economic reform
policies championed principally by the
imf and the US treasury – are still being felt
in the form of populist politics across the
region.
“the region’s politics will reflect the
prevailing economic conditions,” says
Brady. But he notes that the region’s most
successful economies – including Brazil,
mexico, chile, colombia and Peru – “are in
fact following a pro-democratic, free market
policies path.
“the citizens of these economies have
now been able to observe how such policies
can greatly benefit the people as millions
across the region have moved up and into
the middle class,” he says.
Such a perspective should also allow
them to see “the limitations and failings of
anti-market, anti-investment populist policies being pursued by some latin american
countries,” he says, singling out argentina
and Venezuela.
Brady points out that it was precisely the
adoption of free-market reforms that set
the stage for the region’s subsequent boom
– and resilience in the face of the global
economic crisis. “economic principles and
policies that formed part of the Washington
consensus were successfully implemented
in many latin american countries,” he says.
indeed, one could argue that the original
Washington consensus was the Brady plan
itself – without which market-based reform
would not have been possible.
as it happened, latin american nations
would years later revel in buying back their
Brady bonds, in some cases making a political point of reducing their foreign liabilities.
Biggest regret
if there were ever a surer testament to
Brady’s sentiment towards latin america, it
is in what he says is his biggest regret: “that
George H.W. Bush [US president between
1989 and 1993] was not re-elected. He had
the courage to give his full support to our
latin american efforts where others were
hesitant.”
Despite what he sees as wavering US
support for the region in subsequent years,
he notes that bilateral trade is one area that
has notched up notable successes. “the

bilateral free trade agreements put in place
between the US and mexico, chile, Peru,
colombia and Panama, and the cafta-DR
for central america and the Dominican
Republic, have brought about mutual benefits,” Brady says.
today, Brady sees most latin american
economies as “fundamentally sound” and
the region “much less vulnerable than it was
25 years ago, with foreign exchange reserves
at an all-time highs, moderate inflation and
solid banking systems,” he says. “the region
is second only to asia in terms of its economic health.”
But he warns that an incipient recovery in
the US still has the potential to cause trouble
for the region and emerging markets more
broadly.
“the immediate problem today is the
so-called carry trade where speculators borrow at low interest rates in the US and invest
at high rates in the emerging markets,” he
says. “as the federal Reserve raises interest
rates in the US, there could be a huge rush
for the door in emerging markets. Hopefully
everyone is forewarned.”
What’s clear, then, is that no matter the
state of diplomatic relations, Washington
will continue to wield considerable power in
its former backyard – one way or another –
for some time to come. LF
NICHOLAS BRADY

“The region’s
poliTics will reflecT The prevailing economic
condiTions”
Henrique Capriles
continued from page 58
party where rumors abound of a challenge
to his leadership. Such talk was fuelled by
leaked tapes, which revealed a lack of unity
within the government – problems not apparent under chávez.
capriles’ strength, not shared by many
in the opposition that he leads, has always
been in his ability, at least ostensibly, to
relate to the poor. Despite his wealthy background – his family owns a chain of cinemas
– capriles would often ride into slums on
his motorbike and play basketball with the
locals during the campaigns.
it worked – almost. Before april’s elec-

tion, many in chávez strongholds said that
while they were staunch chavistas, and always would be, they would vote for capriles
this time.
nevertheless, the majority of chávezsupporters obeyed the final public request
of the ailing president, who beseeched the
nation before his final cancer operation that
should anything go wrong, they should vote
for maduro.
chávez, of course, was the master of public relations when it came to the poor, but
was less concerned with his international
standing. capriles, however, has spent
the months since his last narrow election
defeat shoring up his ties across the region
– in some cases to the detriment of foreign
relations.
International platform
“We are taking the voice of millions of
Venezuelans beyond our borders,” capriles
announced in Bogotá, before meeting colombia’s president Juan manuel Santos.
His message looks to be getting through,
although regional leaders will be careful
not to offend Venezuela, which, with the
world’s largest oil reserves remains powerful if not as an ally, at least not as an enemy.
authorities in Venezuela reacted with
fury to capriles’ meeting with Santos.
Diosdado cabello, head of the national assembly, accused Santos of “placing a bomb”
under the countries’ much-improved
relations in recent years – and advance that
was partly due to maduro’s efforts as foreign
minister.
the would-be leader also met chile’s
president Sebastián Piñera, though Peru’s
Humala declined such a meeting. capriles,
though, insists that governments across the
region are alive to his concerns over democracy and the rule of law in Venezuela.
“i think more important than what they
said was that they listened to our approach,”
he says. “in latin america these hegemonic
projects of undefined elections, constitutions that are tailored to the government in
power and so on are very negative.”
that is the message that capriles is hoping to spread around the region. “that’s
what i told Santos. that’s what i told Piñera,” he says. “that’s what i’m going to tell
other institutions with which we are meeting. We have to raise the banner of democracy and change in latin america.”
nevertheless, capriles insists that politically, the region is heading in the right direction. “Pragmatism is winning right now in
latin america,” he says. LF

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