- The Washington Times - Wednesday, December 3, 2008

GATHERING STORM

Latin America will soon be hit by the international financial crisis, but most countries are unprepared for the gathering storm, said a former Costa Rican ambassador to the United States.

“Latin American will not be immune from the global financial crisis,” Ambassador Jaime Daremblum, director of the Hudson Institute’s Center for Latin American Studies, wrote in an analysis Tuesday on the financial risks to South and Central America.

He noted that the Washington summit of 20 industrialized nations last month concluded with a call for coordinated international programs to deal with the financial meltdown and that president of the Asian Development Bank, Japan’s Haruhiko Kuroda, had earlier endorsed the creation of an “Asian financial stability dialogue” to prevent another economic crisis like the one that devalued currencies and crashed stock markets in the late 1990s.

“They would be wise to adopt one,” Mr. Daremblum said of Latin America. “No single country can address the financial crisis alone.”

He suggested that Latin America create a “financial dialogue” under the sponsorship of the Inter-American Development Bank.

“Not only would this help the region during the current crisis, it would also provide a permanent, institutionalized venue in which to identify and tackle future problems,” he wrote.

Mr. Daremblum called the region a “heterogeneous mix of governments and economies.” Chile seems to have the most stable economy, followed by Brazil, Colombia, Mexico and Peru, he said. However, nations like Argentina, Bolivia, Ecuador, Nicaragua and Venezuela have embraced socialist policies and rely heavily on the oil market and other commodities.

“Now that commodity prices have fallen dramatically, the utter failure of their populist economic strategies will become more evident,” he predicted.

Mr. Daremblum was ambassador in Washington from 1998 to 2004.

MORE EXPECTATIONS

Left-wing leaders in Latin America are hoping that the change Barack Obama promised will benefit them, even though some have denounced the United States as a war monger and accused Washington of plotting coups against them.

“Obviously, Obama will encounter difficult policy challenges, especially in South America where large sections of the population have embraced the political left,” said Odeen Ishmael, Latin America’s most senior ambassador in Washington until 2003.

“Currently, the U.S. government has lukewarm relations with ‘leftist’ countries such as Venezuela, Bolivia and Ecuador, but there is much anticipation that the new Obama administration will apply an approach for constructive engagement with those governments,” he added in a postelection analysis.

Mr. Ishmael, now Guyana’s ambassador to Venezuela, added that President Hugo Chavez of Venezuela and President Evo Morales of Bolivia “have expressed optimism that Obama’s presidency could ease the diplomatic tension” between them and Washington.

Story Continues →