Threats to Latin America's Market Model?
What are the prospects for the survival of Latin America's new market model? Are most countries in the region likely to preserve the basic outlines of the neoliberal development scheme, or will there be a reversal, that is, a region-wide trend away from free-market economics? This question is par ticularly acute, given the recent economic and political difficulties facing the new market system in major Latin American countries. Three cases stand out: In Venezuela, President Hugo Chavez has spouted strident antineoliberal rhet oric and has enacted a number of measures that depart from free-market reci pes, such as stringent currency controls. In Argentina, one of the big neoliberal success stories of the early and mid-1990s, the economy collapsed in 2001-2002 and a center-left president who criticizes the free-market system was recently elected. And in Brazil, the socialist Workers' Party, which was traditionally very critical of neoliberalism, won the presidential election in a landslide in late 2002. Thus, important potential challenges to the continuing predominance of the market model have emerged over the last few years. Observers have, there fore, become worried. Eduardo Lora and Ugo Panizza, for instance, report that "the future of structural reforms seems cloudy"; and a panic-stricken columnist for the Financial Times even saw Latin America moving "back to revolution."1 What, then, are the future prospects of Latin American neoliberalism? Is the new economic model there to stay, or was the wave of free-market reforms only a passing fad? Will the economic vulnerabilities and social limitations of neoliberalism and the dashed hopes that market reform would finally put Latin America back on a path toward sustained growth cause a backlash?