Leading Article: Business rules, but generals lie in wait

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The Independent Online
WHILE other continents have been grappling with social decomposition and even civil war, Latin America has been enjoying unprecedented economic prosperity and political stability. These days its republics tend to be run by successful businessmen and economists with PhDs rather than bemedalled generals. The last South American president to gain power through a military coup, General Andres Rodriguez of Paraguay, handed over yesterday to his elected successor, a wealthy public works contractor called Juan Carlos Wasmosy.

Washington, after decades of shoring up unsavoury but virulently anti-Communist regimes, is delighted. At the same time, faith in market forces has replaced dirigisme and economic nationalism as the norm throughout the region. The foreign capital that stayed away during the debt-racked Eighties has returned, and former international basket cases such as Argentina and Mexico have become star performers in the league tables of the world's emerging markets. Chile, with a 10.2 per cent growth rate last year, is in the same league as the Asian tigers. Most Latin American countries have attained middle- income status: trade and investment, not aid, are what they need from the rest of the world.

Yet problems enough remain. Eduardo Frei, who is likely to be elected President of Chile in December, has made the plight of the 30 per cent of the population who have yet to enjoy the fruits of recent economic success virtually the sole issue of his campaign. There is a growing awareness that elected governments must deliver the goods for more than just the growing middle classes if such freedoms are to survive. The most disturbing recent trend has been the success of military-backed populism in Peru, where economic decline and political violence had gone hand in hand since the last military regime ended in 1980. Alberto Fujimori, son of poor Japanese immigrants, was elected by a landslide in 1990, but within two years he had abolished the trappings of democracy, closing Congress and dismissing judges.

Since then he has managed to restore his country to respectability with the banks, and potential investors are clamouring to take advantage of the world's most radical privatisation programme. Peru's Maoist Shining Path guerrillas have been driven to the brink of defeat. Such is his popularity that Fujimori is changing the constitution to reflect his own brand of 'direct democracy' and ensure his re-election.

The message that banishing politics and imposing order bring results has not been lost on other countries. 'Fujimorismo' is particularly popular with Brazilian generals tired of corruption and inefficiency. Impatient Venezuelan officers tried twice last year to unseat President Carlos Andres Perez, and he has since been suspended from office to face embezzlement charges.

Politicians are in general disrepute. The present wave of businessmen-presidents may be the last best hope many Latin American countries have of combining growth with democracy. If they fail, the allure of leaders like Fujimori, with more or less discreet backing from the barracks, may prove irresistible.

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