A Continent trying to make the magic of its riches real

In the 500 years since the Spanish and Portuguese, for good and ill, started to link what became Latin America with the rest …

In the 500 years since the Spanish and Portuguese, for good and ill, started to link what became Latin America with the rest of the world, the region's fabulous wealth and miserable poverty have been the stuff of legend, with a strong basis in reality.

The image of Latin America as a beggar - with dependent, underdeveloped economies whose immense natural resources are plundered by the colonial powers - is no longer an apt one. But the old adage still has a certain ring of truth. Social inequality stretches wider here than on any other continent. Twenty-four Mexican families are richer than 24 million of their fellow citizens. On a macro-level, the recent development of Latin American economies has not put them on an equal footing, in trade terms, with the US or the EU.

Many Latin American leaders believe that the next decade offers a great opportunity, and perhaps the last one for a long time, for the continent to at last engage with the global economy as a major player, measuring up to the established giants to the north and east, and emerging giants in Asia.

There are some solid grounds for such optimism, but they are undermined by fault lines which could, almost as easily, lead to turmoil and collapse.

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Latin America's great advantage over Asia and Africa, in general terms, is the relative stability of its political and economic institutions. Over the last 20 years, military dictatorships have crumbled and been replaced by democratic systems. For all their manifest flaws, these systems have deeper roots in Latin American political culture than in most Asian and African countries. In most Latin American states, power now alternates between parties with genuinely different policies as a matter of course.

In economic terms, too, Latin America is significantly more stable than other emerging regions. True, Mexico suffered its "Tequila crisis" in the mid-1990s, and Brazil was forced to make a humiliating devaluation of its currency a year ago. But crises which created lethal fevers in Asia (and Russia) have caused only severe head colds south of the Rio Grande.

While far from exempt from corruption - and with the drug trade deeply embedded in some finance systems - growth in these American economies has not been built on the shaky foundations of bogus banking systems or massive cronyism.

The engine of the Latin America's drive to become a global player is Mercosur. This is an economic region, the southern market, formed by Brazil, Argentina, Uruguay and Paraguay, with Chile and Bolivia as close associates. Last June's Rio summit, an unprecedented encounter between EU and Latin American leaders, showed that much of the continent wants to get behind Mercosur in a samba line to international trading heaven.

But it remains to be seen whether the angry spats between Argentina and Brazil, which followed the Rio love-in, herald a full-scale breakdown, or are just like Britain and France sparring in the EU. If Mercosur does become the vanguard of economic integration, the next question is whether it cosies up to the US or the EU, or plays off one against the other.

The other big question for the future is whether Latin America's new (or rediscovered) democratic institutions can remain stable. This will depend, to a considerable degree, on whether they can deliver more than hope and promises to the many millions who live in the dirt-poor favelas.

The leftward swing in recent Argentinian and Uruguayan elections is burdened with heavy expectations (though Chile seems to be moving in the opposite direction). The Latin American poor have paid a heavy price for the modernisation of their economies, and will demand a much bigger slice of the new wealth that has been generated by their sacrifices. It is not easy to see how such aspirations can be squared with the ruthless dynamics of a globalised free market.

And where does a fragile and priceless environment fit into this difficult equation?

Some people have totally lost patience with the promises of the new capitalism: see under Venezuela, where a veritable revolution is under way. Will the democratically elected President Hugo Chavez become the Castro of the early 21st Century, appealing charismatically to the wretched of the Latin American earth, and reviving Bolivar's heady dream of La Gran Colombia, which would stretch from Ecuador to the Guyanas? The apparently imminent disintegration of Colombia as it is now constituted, mired in intractable civil wars, might give Chavez this pivotal role, if he moves to an alliance with the conceivably victorious narco-leftists of the FARC guerrillas. Fidel himself could see a chance for a last great adventure. And if any one of these scenarios actually began to unfold, what would Uncle Sam do then?

Cuba, of course, is not a democracy, but despite the crippling US blockade, the people live in a health service and educational paradise compared to the poor on the mainland. For many Cubans, however, the promised land is now located in Miami. It is anybody's guess what will happen when the last communist patriarch in the western hemisphere goes to commune with Marx and Lenin.

Even closer to the US, Mexico, whose 70-year facade of democracy has been described as "the perfect dictatorship", faces an uncertain process of reform. Meanwhile, its indigenous peoples in Chiapas and elsewhere are getting angrier and more organised (as are the Mapuche in Chile). A lot of Republicans on Capitol Hill are asking: is this really a good time to hand the Panama Canal back to what they dismissively call "the small brown people"?

And then there is the vexed question of the internationalisation of human rights. Even the left in Latin America is suspicious of judges from the old colonial continent indicting the local fascist monsters. Nevertheless, there is growing recognition that the prosecution of Pinochet has helped smash the iron impunity which protected retired tyrants. Watch this space, as Baltasar Garzon moves on from the Pinochet case to Argentina and Guatemala (and maybe to Henry Kissinger himself).

Meanwhile, human rights are almost as neglected by some of the new democracies as they were by the old dictatorships. Amnesty International has documented an appalling litany of abuse which runs from Brazilian prisons to the Mexican countryside.

But the final note must be one of optimism. It is a truism that Latin America has a wonderful sense of vitality, of magic even. This magic enchants almost everyone privileged to visit the continent, and travels abroad through the youthful rhythms beaten out by the old men of the Buena Vista Social Club.

Its diverse peoples deserve to have that magic made real, for all of them, in the 21st Century.

Paddy Woodworth can be contacted at pwoodworth@irish-time.ie