The President of Chile cast diplomacy aside today to promote capitalism. According to Bloomberg, Sebastián Piñera said that Europe’s mistakes are a lesson for Latin America:
Latin America must avoid the costly welfare policies plunging Europe into crisis and should adhere to a market-friendly course to preserve gains made over the past decade’s economic boom, Chilean President Sebastian Pinera said.
Countries in the region like Chile that have maintained open economies and fiscal discipline will fare better during a global slowdown than those pursuing “a different model” like Cuba, Venezuela and Bolivia, Pinera said in an interview yesterday in Mexico, where he’s attending a Group of 20 summit.
“We don’t want to put at risk everything we’ve done up to now,” said Pinera, a 62-year-old billionaire businessman who was elected in 2010 on a pledge to make Chile the first developed country in Latin America. “Take a look at European countries, that’s the path that we do not want to follow.”
Meanwhile, the New York Times reports that Brazil is staggering under socialism while Mexico is passing it as the model large Latin American economy:
In one sign of unease, the Brazilian government threatened this year to cancel a 10-year-old automotive trade accord with Mexico. For most of the pact’s life, Brazil had sent more cars to Mexico, but last year that reversed, with imports of Mexican-made cars surging 70 percent to $2.4 billion. In March, Mexico agreed to cut its exports to Brazil to an average of $1.55 billion annually for the next three years and restore free trade after that.
The dispute highlights each country’s distinct approach to development. Mexico has been dedicated to open markets, free trade and deregulation. Brazil’s model involves muscular government intervention through big state-controlled companies….
Even though Brazil’s homicide rate trumps Mexico’s, the gory nature of the killings in Mexico and Mr. Calderón’s use of the military to combat traffickers have focused more attention on the death toll here.
And Mr. Peña Nieto is correct that growth has yet to trickle down to many workers. Real wages have barely increased. Indeed, one reason that Mexico has captured market share from China is the narrowing gap between Chinese and Mexican wages.