What's in It for Me?

Andres Oppenheimer’s column on the 2010 “World Wealth Report” in yesterday’s Miami Herald confirms once again that the rich in Latin America are selfish and uninterested in building a better future for their societies. While the rich in the developed world live in essentially the same way as everyone else in, say, Bern, New York, Monaco, or London, the Latin American rich live apart in almost unimaginable opulence, flaunting their wealth without any remorse or guilt. They take the world as it is, not as it could be.

When I was living in George Town, the capital of the Cayman Islands, and working for an offshore bank, I once saw so much money coming out of a single country that it was inconceivable to me that that country could have such high levels of poverty. I routinely saw rich Latin Americans open bank accounts with suitcases full of cash (literally). But, of course, I was not allowed to ask where the money came from or what kind of “business” had yielded such unbelievably large profits. Bank regulations; sorry!

It seems not to be in the nature of Latin Americans to behave selflessly or to contribute even part of their wealth to charitable foundations, people in need, programs to alleviate poverty, and the like. Moreover, they seem wholly disinterested in volunteering for any kind of cause. The attitude has always been, “If I do this, what’s in it for me?” Of course, the rich are under no formal obligation to give money to the poor or to support efforts to improve the lot of their fellow citizens. But unlike the less than 1 percent of the world population that benefits from “old money,” the Latin American rich have been able to amass their fortunes thanks to the societies within which they live. Thus, there is a moral obligation to give something back.

I am not talking about giving away all or even half of your fortune. I am merely talking about making a difference, making a contribution—even if, in exchange, a project, building, or school has to be named after you. Don’t worry about leaving your children without your wealth. If they have received a good education, they will make their own wealth too. And that is the best legacy that the rich can leave to their families, right? Also, why not at least try volunteering at a hospital, a community kitchen, or a public school? For a rich Latin American to do so would be like a miracle in Mes Morado in Peru or Festa de Todos os Santos in Brazil. Sadly, I don’t think many rich people in Latin America would even consider these idealistic suggestions.

By contrast, the United States seems to offer a good example of self-giving and compassionate behavior. Please, don’t get me wrong. I am not saying the United States is better than any other country. I am just pointing out that Americans themselves seem to be especially generous. This is not about the economics of wealth concentration or political influence; rather, it just seems to be part of the natural way of being for many Americans.

"Trabajo, Trabajo, Trabajo"

[SPANISH VERSION]
Se dice que en Colombia, el colombiano es tan recursivo, que es capaz de “vender una loca embarazada”. Y eso no lo dudo. E tenido la oportunidad de vivir en Colombia y ver el potencial de un país que estuvo al borde de convertirse en un “Estado fallido”. Viví allí en uno de los tiempos dónde la insecuridad, la violencia, y todo tipo de “veneno” se podia encontrar. En ese tiempo Bogotá ulizaba el lema de “2,600 metros más cerca de las estrellas”, que nosotros los extrangeros bromeabamos de ello, porque en esa ciudad habia tanto perico (droga) y tanta crimen suelto, que efectivamente de alguna manera u otra, uno podría verse más cerca de las estrellas; Aún peor, la imagen de ese país en el exterior era tan mala que el sinónimo de Colombia era narcotráfico. Usted no se imagina las cosas que ví, escuché; y no se imagina la frustración y el pesar que sentí al no poder hacer nada para ayudar a aquellos en extrema necesidad. Eran tiempos de horror!

Hoy en día, gracias a políticas económicas estables, a una mano dura contra la guerrilla, y al apoyo por parte de los Estados Unidos (con todas las condiciones imaginables), se podría decir que Colombia es un país económicamente emergente. Aunque hay riesgos que aún podrían desestabilizar el proceso de cambio. Y no hablo de “Colombia, el riego es quedarse” (el lema colombiano para atraer turismo). Hablo de riegos políticos, económicos y sociales que pondrían a Colombia en reversa total. Y eso sería desastroso.

Esperando que el nuevo presidente electo, Juan Manuel Santos cumpla su promesa de crear más “trabajo”, reducir la economía informal, promover la inserción e integración social, y acabar de una vez por todas con la amenazante guerrilla—no importa como, hay veces que el fin justifica los medios. Si así él lo hicierá, Colombia estará en una posición de emerger como potencia económica y convertirse en actor político muy importante en el hemisferio occidental. Yo tengo mucha fé en Colombia y en los colombianos.

[ENGLISH VERSION]
“Jobs, Jobs, Jobs”

In Colombia, people say that Colombians are so resourceful that they could “sell you a pregnant crazy woman” without you even noticing. And I have no doubt about it. I once had the opportunity to live in Colombia and to see the potential of a country that was so close to being a “failed state.” I lived there when insecurity, violence, and all kinds of economic malaise were the norm. Back then the capital city, Bogotá, used the tourist slogan “2,600 meters closer to the stars.” We foreigners used to joke that, given the evident and widespread drug consumption and the rampant and pervasive crime, we could definitely end up much closer to the stars—one way or the other. Even worse, Colombia’s reputation overseas was synonymous with that of its infamous drug cartels. You can’t imagine the things I saw and heard, and you can’t imagine the frustration and sorrow I felt knowing that I could do nothing to help those in serious need. Those were horrible times!

Today, thanks to sound economic policies, a tough line on the guerrillas, and the support of the United States (with all the strings attached), Colombia is truly an emerging economy. Nonetheless, risks remain that could stall or even reverse the progress made so far. And I am not talking about “Colombia, the risk is wanting to stay” (Colombia’s latest slogan for attracting tourism). I am talking about the political, economic, and social risks that could still drag Colombia backward. And that would be disastrous.

Here’s hoping that the newly elected President Juan Manuel Santos will keep his promises to create more jobs, reduce the influence of the informal economy, promote inclusion and social cohesion, and end once and for all the destabilizing guerrilla movement—whatever it takes, sometimes the end justifies the means. If he does, then he will have enabled Colombia to emerge as an economic power and to become a very important political actor in the Western Hemisphere. I have so much faith in Colombia and in the Colombian people.

Clown or True Leader?

During her recent visit to Ecuador, Secretary of State Hillary Clinton made a comment about relations between Venezuela and the United States. In response, Hugo Chavez sang a song about, essentially, how he doesn’t care and about how much he dislikes Mrs. Clinton. The majority of Venezuelans applaud such behavior; they respect and admire Mr. Chavez as a true Venezuelan leader. But outside of the country, many in the international community view him as a clown, like a kind of court jester. And I wonder, how can you take someone with an unbridled tongue and who displays such simplicity, even to the point of vulgarity, seriously as the president of a nation?

Venezuelans identify with Mr. Chavez. They speak the same language; he shares their mannerisms and style of talk. I seriously doubt that a candidate for president with the silver tongue of a Bill Clinton, Tony Blair, Gabriel García Márquez, or Mario Vargas Llosa could be elected president of Venezuela. But this clownish, almost laughable behavior is not only found in Venezuela. Russia had it in Boris Yeltsin, Italy has it in Silvio Berlusconi, and the United States had it in George W. Bush. I think we will see more unpresidential behavior from the leaders of many other countries. I tend to agree with those in the diplomatic community who I’ve heard admit that Mr. Chavez has reasonable and understandable complaints against the United States. The problem, however, is the way he expresses it: his folkloric antics are appalling, abrasive, low, common, and vulgar. The French language may no longer be the language of diplomacy, but the art of diplomacy itself has not essentially changed. Protocol, etiquette, discretion, and propriety are expected today just as they have always been.

However, it seems that some leaders care more about appealing to or connecting with the people than about these diplomatic manners or about appropriate presidential behavior. And after all, if you want to make a point, then you must speak the language of the people. This is how one sometimes conducts business, markets a product, and even plays politics. Popular cultural behavior seems to carry more weight than propriety or good manners. Imagine the Queen or England or the King of Spain campaigning for public office. I doubt they would be elected. And Mr. Chavez not only commands respect, he encourages the sort of militancy that was a hallmark of Soviet Russia and that one sees today in North Korea. He is no fool. He knows how to keep his political approval high, how to make people laugh and create distractions. It’s like bread and circuses in the times of the Roman Empire.

Mr. Chavez created his Bolivarian Revolution, which, by the way, has little to do with Bolivar (the South American liberator). Nonetheless, he put this idea into the minds of his people and has even convinced other countries to follow him. And I have to say, whether he is good or bad, he is certainly an effective leader. I invite you to try to convince, say, a hundred people to follow you or to do what you want them to do. That requires tenacity and respect.

But just remember that one can speak the language of the people, while remaining respectable--presidential, if you wish--and one can be simple without being vulgar.

Follies of Emerging Markets

On June 3, The Economist magazine published an article about Peru’s new plan to export natural gas. While I am glad to learn that Peru is becoming an exporter of natural gas, I am sorry to say that it’s nonetheless likely that nationalistic, retrograde economic and political policies will continue to hold the country back from developing a more progressive and booming economy. In South America, territorial disputes, mistrust, and old rivalries run deeply at the core of the political culture. Regrettably, regardless of the particular national context, all political parties in South America are deeply invested in the old and ridiculous nationalism of “defending the interest of the nation” by not increasing trade and diplomatic relations with neighboring “enemy” countries.

God forbid that either Peru or Bolivia, for example, should sell natural gas to Chile, a country that needs it and that can afford to pay good money for it. Why? Because both countries have outstanding territorial claims against Chile, and these act as impediments to increased trade between the countries. Peru and its consortium exporting partners could—and should—make significant profits by exporting to readily accessible markets such as Chile’s, instead of waiting for Mexico’s plant to be able to receive the natural gas or by exporting to Europe, which is far more expensive to do. The business mentality is not given sufficient consideration in these instances. Can a country with discriminatory economic policies become an emerging economy and, thereby, become a potential political and economic leader in the region?

Peru lost the War of the Pacific more than hundred years ago, and it signed the Tacna-Arica compromise in 1929. However, Peru never stopped claiming ownership of the lost territories, and the naive dream of getting them back is still very much alive in Peruvian society. Especially during election campaigns, the political parties appeal to this nationalist sentiment to distract attention from governmental incompetence or to curry favor with voters. It is a strategy that never seems to fail to distract the people from the imperative of economic development.

The prioritization of nationalistic sentiment over sensible economic development in Peru is an example of a broad tendency that operates within most, if not all, countries in South America. I wonder whether Peru or Bolivia has ever considered allowing the people of the so-called lost territories to decide for themselves which country they want to be part of? Undoubtedly, the answer would be Chile!

Furthermore, it is difficult to understand why Peruvian nationalistic sentiment against Chile is strong enough to obscure the obvious economic and diplomatic importance of selling natural gas to a country that is itself heavily invested in almost all sectors of the Peruvian economy. Even the biggest Peruvian airline, Lan Peru, is essentially Chilean; it is a spin-off the Chilean national airline, Lan Chile. How pathetic is that?

So, estimados peruanos, do you seriously believe that Arica will ever be returned to you? And even if it were, how would your economy improve then? Stop the nonsense; let go of the retrograde nationalism that is obstructing your economic growth. Think of it this way: do you believe that you could successfully run a grocery store if you refuse to sell your products to a significant number of the people who want to buy them? If your answer is yes, then your store is destined to fail and, eventually, to go out of business.

What They Are Today, Your Folks Were Yesterday

These days it seems that the rich world is trying to get rid of their increasing immigrant populations. Ireland is fed up with the Poles, for instance, so they send them packing. But the poles will come back, you’ll see. The Italians are doing the same with the Albanians, Moroccans, and Tunisians. Spain’s economy is sinking, so getting rid of the immigrants must be the solution, right? I feel for the Hispano-Americans in Spain, who must face serious discrimination, insults, dead threats, and humiliation. In provincial Spain, horrible things are yelled at them, and they are made to feel unwanted. Spain today is definitely among the worst places to be an immigrant. No wonder Cristina de Kirchner asked for respect on behalf of immigrants at the EU-Latin American Summit, which was held earlier this month in Madrid. Things are getting really ugly over there.

Of course, the United States, too, is increasingly hostile to immigrants. The State of Arizona has passed a Draconian law that clearly violates international standards for migration and human rights. But, then, perhaps you believe that undocumented (or “illegal,” as some prefer it) immigrants have no constitutional rights? Well, think again or, better still, talk to a lawyer who practices international law.

In any case, as a political phenomenon, hostility to immigrants develops for two main reasons. First, oppositional political parties use immigration as a way to gain votes or to discredit governing parties -- whether liberals, moderates, or conservatives; Democrats or Republicans. All have played the immigration card, in some way or another, expressing “concern” about the influx of immigrants. “They are invading our country!” But realistically speaking, it’s just politics plain and simple. The second reason has to do with poor economic conditions that may seem to threaten the very foundation of a rich, stable society with high unemployment, social insecurity, rising crime, government deficits, prolonged recession, etc. So, essentially, immigration and immigrants themselves are made the scapegoat.

Immigrants are not a serious threat to their host countries, however; nor are they the cause of economic malaise.

So, let’s recap, shall we? Because there are many immigrants in the United States, for example, the level of crime is high. Right? No, the vast majority of crimes are committed by U.S. citizens, not new immigrants (documented or not). Latino immigrants are certainly not responsible for the ongoing wave of muggings in my own city, Washington, DC. It is highly unlikely that an immigrant would move to another country just to rob and kill. Instead, immigrants are motivated by the desire to work and to seek better opportunities for themselves and their families. (I am not generalizing here, of course.)

Yet so many seem still to believe immigrants represent a threat to the very survival of the culture, a threat such as Samuel Huntington described in “The Clash of Civilizations.” It is all rubbish and nonsense! A decade or two ago, you couldn’t find as many Mexican restaurants as you can find today; parents were not talking enthusiastically about sending their children to a bilingual school, as they are today. And today, many more Americans are learning to speak other languages, especially Spanish. In fact, if you speak Spanish in public today, you had better be careful about what you say, because the person seated next to you may very well understand you.

America society has became much more open and diverse, and Americans have become much more interested in what’s going on abroad. And this ongoing cultural change is, in part, thanks to the Latino immigrant population. If you’re worried that Americans will be speaking Spanish by 2050, think again; the sons and daughters of immigrants prefer to talk in English, rather than in their parents’ tongue. So just relax, because the very survival of your culture is assured. America is by its very nature a cohesive yet inclusive society, a land of opportunity where anyone can become an American in a matter of a few years. This is in a stark contrast to the situation in many European countries. If you were a Turkish immigrant to Germany, say, or an Algerian immigrant to France, you would still be regarded as such as many as fifty years later.

The simple truth is the Mexico and the United States are both to blame for the worrisome crime occurring on and around the border: one country for not realizing early on that the Cali and Medellín cartels were offshoring to Mexico, and the other country for its out-of-control gun culture. Supply and demand are to blame. And when guns and cash are both plentiful, it is easy to build a quasi-army.

This is not to say that there is not a serious need for immigration reform in the United States, but not a la Arizona style and not building a wall.

Americans and Europeans, think about this: Who is going to pay for your retirement when you turn 65? Who will make up the workforce by 2050, the engine of a prosperous economy? And if you had the power to get rid of all immigrants in the blink of an eye, do you seriously think that the the native population -- the “real” citizens -- would really do the unwanted jobs? Do you think they would fill up the factories, pick the crops, perform the “menial” labor? And even if they would suddenly be willing to do it, they wouldn’t work for the low wages and under the harsh conditions of the many unscrupulous employers who hire undocumented immigrants to do these jobs. Businesses do not have hearts; they want to pay low wages, don’t want to hear complaints, and certainly do not want unions or syndicates to organize their workers.

Furthermore, the demographics are clear. The populations of the most industrialized countries are shrinking—the United States is an exception, thanks in large part to immigration. Paying citizens 1,000 euros per baby, as is being tried in Europe, or creating a holiday to send people home to make babies, as the Russian have tried, is not going to work.

Finally, it’s worth remembering that the Americas have always welcomed immigrants. When the Irish suffered the potato famine, your people immigrated to the Americas; when there was civil war in Spain and the dictator Franco was alive and kicking, you had no were else to go but to the Americas—Latin America, in fact; after the Second World War, when all over Europe there were not even peanuts to serve for dinner, you immigrated to the Americas—whether you were looking for a better future or just a place to hide. And, of course, do not forget that your people have been immigrating to Spanish America since the 1830s, when there was not even rice to eat in Japan; when you left your country con una mano adelante y una mano atras (“more than poor), your people also migrated to the Americas.

The point is this: stop what you are doing to immigrants; they are today what your folks were yesterday.

Social Exclusion in South America

Two months of backpacking in South America has made me realize how little has changed since I last visited the region, almost eleven years ago. I am not talking about infrastructure development or the new businesses that have spread throughout the big cities—the fancy restaurants, coffee shops, banks, and huge shopping centers. These economic changes were especially noticeable in Lima, Peru, where there is pretty much anything for anyone, and where strolling along the ocean has become a must-see experience. The change I am talking about concerns social exclusion, that malice that is endemic and deep at the core of South America. The rich are getting richer—big news, right? South America does not suffer from dictators, or caudillos, anymore (well, maybe there is still one officially elected by the people). South American economies have grown steadily, and democracy is taking firm hold everywhere in the region. Nonetheless, the indigenous peoples and afro-descendants remain the most marginalized segments of the population, and they continue to face widespread discrimination.

This observation doesn’t come just from reading the newspapers or recalling my academic years spent studying Latin American affairs. I was able to see firsthand that, in the workforces of all kinds of industry in Colombia, Peru, Ecuador, Bolivia, Brazil, and Paraguay, the Indians and the afro-descendants are not represented. They are not a visible part of a cohesive society. You simply don’t see them anywhere you have to interact with local people or seek customer service—bank employees, flight attendants, waiters, casinos dealers, club employees, front-desk staff. The face of nearly all companies in South America is represented by employees with fair-colored skin. Private industry may claim to have a diverse group of employees, but if that is true, they are in the backrooms where nobody can see them. And this happens even in Brazil, where afro-descendants comprise a large number of the population. While flying around many areas of Brazil, for instance, I didn’t see a single black flight attendant. To satisfy my curiosity, I discretely asked a flight attendant about this, and she, somewhat confused, responded, “I don’t think our airline has any black flight attendants—not that I have seen.”

The economic development of many South American countries has improved drastically, but the reduction of poverty is occurring at a very slow pace, thanks in large part to the persistent social exclusion and the resulting economic inequalities. In Lima, Peru, I asked a worker why he doesn’t want to work in a bank or an office, rather than in an informal sector. His answer came almost immediately: “because I am cholo, and they wouldn’t hire me,” he said. In Manaus, Brazil, I asked a coconut seller the same question, and he told me they wouldn’t hire him “porque eu sou preto.”

Social cohesion and social integration are seldom talked seriously about among politicians or in the business sector. Few people really care. Unfortunately, these terms are most often used by those who “scream in silence to the deaf people.” In the past, indigenous peoples and afro-descendants used to wait for a better life, hoping that the caudillos would eventually leave government. Today they are still waiting, but now for those to whose businesses and enterprises have benefited from globalization. Meanwhile, the indigenous and afro-descendants are still being treated like second-class citizens. The governments in many, if not all, South American countries look with disdain and indifference on those most in need—those who, if socially and economically empowered, could contribute significantly to the prosperity and development of their countries.

In Peru, President Alejandro Toledo (2001–2006) campaigned for the presidency promising to bring social inclusion. In Bolivia, President Evo Morales was elected, in part, because of his indigenous background and the promises he made to improve the situation of the indigenous peoples. In Ecuador, although President Rafael Correa is not himself of indigenous descent, he too ran for the presidency on a political platform designed to appeal to the interests of the indigenous population. The same is true of Luis Inácio Lula da Silva, the Brazilian president, and Fernando Lugo of Paraguay, who seemed really to care for the guaraní population. It is by now obvious, however, that social integration and other positive change cannot be accomplished simply by electing “one of your own” or by having an indigenous or an afro-descendant as a government minister, bishop, or high-ranking official in the civil or military branches of government. These developments may help create a different perception of the “socially excluded population,” but they have little or no effect on the broad social environment, where discriminatory attitudes remain firmly entrenched.

To promote social integration and social cohesion, and to end discriminatory practices, governments must do more than make promises. Governments, working together with the private sector, must make the achievement of these social—and, ultimately, economic—goals a top priority. The solution is not only to enact and actually enforce laws designed to promote social integration, but also to create incentives that promote employment diversity—and, hence, social inclusion—in the private sector. The people themselves are the key to building, first, an emerging market and, then, a developed country. They are the real raw material that all industries require in order to succeed.