José Miguel Insulza, secretary general of the Organization of American States (OAS) presented a lecture titled “Growth, Inequality and Democracy in the Americas” at the Institute for Educational Initiatives on Tuesday.
Insulza, one of Chile’s longest serving public ministers, addressed the current economic growth of Latin America and what it signifies for the implementation of democracy in the region.
He said the decade between 2002 and 2012 was the period with the largest economic growth for Latin America, a phrase that is key to understanding the economic decline and inequality Latin America currently faces.
“We could have made all the improvements in education, in science and technology, diversifying the economy in the decade between 2002 and 2012,” Insulza said. “This is really a challenge for the region today. What do we do with the expectations that have been created? How do we try to carry out the reforms that are pending from the past decade?”
Insulza said the 2002-2012 decade presented enormous economic growth partly because of better international trade relations, particularly with China.
“Trade between Latin America and China grew from 2002 to 2012, from 4 billion to over 70 billion dollars, and that’s enormous,” Insulza said. “China will become a larger economic partner with Latin America than the United States.
“There is no reason why there should be so much poverty and there is no reason why there should be so much inequality. The fact is that our inequality has increased incredibly. It’s very clear that there is a relationship between the health of the economy and the degree to which capitalism is responsible in some way.”
Insulza said one of the factors that contributed to income inequality in Latin America was the lower rate of investment in regional production, where consumption has ultimately outpaced the country’s import and export rate.
“External investment hasn’t grown, and that is a problem. When wealth increases, wealth in terms of capital and ownership of capital decreases, investments cannot be made,” he said. “Currently, the wealthy classes in Latin America are more willing to buy land or to invest in houses than to invest in products from that region.”
Insulza highlighted three problems key to understanding the current crisis in Latin America: income inequality, rising crime rates and the call for legitimate democratic governments.
He said crime rates have been proven to correlate with income inequality, with the majority of security forces in several countries influenced by the wealthiest one percent.
“Socially, we are faced with a tougher problem. The external conditions for our growth are not there, the internal conditions for our growth are not created and we have been lagging behind. That certainly will affect democracy.” Insulza said. “The interesting thing is that even today, most economists are warming up to the fact that it is not just a problem of social justice, it also a problem of unfairness.
“Growth in the economy is not possible unless we correct the tremendous inequality that exists in the country.”
Insulza said while democracy in Latin America has improved substantially since the 1990s, Latin America still requires progress and further implementation of democratic governments in several countries.
“Citizens are not willing to give obedience in exchange for protection; they are willing to give legitimacy in exchange for citizenship, and I think we are very far from that,” he said.
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