Latin America, a region extending from the southern border of the United States. all the way to the southern border of Chile and Argentina, has long been considered one of the world’s most underperforming collective economies. Generalized as a whole, this continent and its close peninsular friends have been viewed more so as a peach tree, ripe with fruit and host to a plethora of pickers. However, beyond its oil and other natural resources, Latin America offers the possibility not only for a regional economic boost, but perhaps an even greater global effect.
Through government corruption and skewed economic ideals, Latin America as a whole has gained the reputation as a mire for investment. Though Mexico, through its own recent initiative, has gained ground, the rest of our southern neighbors fall below China, the U.K. and even Germany in the amount of trade conducted with the United States. These low numbers are because of past exploitation and misuse of resources. Many of these governments, in the hopes of boosting gross domestic product and their own productivity, employed programs of state-run industry and protectionism. Through artificial inflation of internal currency value, the external worth of products declined rapidly.
The point? These countries have placed themselves in an unfortunate position. However, it is certainly a problem that can be remedied.
The main issue resides in the conflict between short-run and long-term returns. The necessary components for revitalizing Latin America are all long-term: education, infrastructure, collective governmental stability, etc.
Now, the solutions. In the past, the United States has employed a policy of using economic incentives in order to correct social and political disorder. Whenever Venezuela would engage in business with less-than-savory characters, Congress and the president would respond by imposing restrictions and import limitations or tariffs. By doing so, U.S. foreign policy soon became a domineering force for imposing will and governmental policy on issues of dissent.
Instead, the United States should conquer the long-term issues, specifically those of education and infrastructure. By promoting development in these two areas, the positive social and entrepreneurial ramifications would soon begin to outweigh the current negative social conditions which exist in these various countries. By limiting trade, the U.S. manages to create future problems for itself. Economic solutions to social issues are certainly not successful, but by using investment and funding to combat the root problems of illiteracy, heavy unemployment and health care, among others, the doors for development are opened wide.
Why would the United States want to participate in and promote such a policy? For its own benefit, of course. The best part about Latin America and its abundant resources is that it not only has a convenient proximity to the United States, but that its population provides a readily available and educated workforce. This drives down costs for producers, and ultimately consumers, but additionally results in countries that are more economically successful. As we all know, the more income a country has, the more developed it becomes. Along with development come the perks of lower crime rates, less corruption, greater governmental accountability and improved participation from the general population. By using economic incentives instead of punishment, the United States benefits not only an entire continent, but itself in the process.
Matt Boaz is a senior political science major from Edmond, Okla.