Background and Overview
Latin America and the Caribbean has been one of the regions
of the world that first made a transition to democracy
over twenty years ago. With the exception of Cuba, the
region is largely seen as having instituted democratic
political processes, though as the events of recent
years demonstrate in Haiti, Bolivia, and Venezuela,
democracy still has a long ways to go to become truly
consolidated in the region, and much institution-strengthening
is needed to facilitate beneficial democratic governance
between elections.
On the economic front, much work remains to be done on
market-based institutions almost everywhere in the region.
In the recently published World Economic Forum Growth
Competitive Index, the only Latin American country rated
among the top 25 competitive countries of the world
was Chile, which was ranked 22nd. From there is a steep
drop to Mexico, ranked 48th and Costa Rica ranked 50th.
Every other Latin American country is ranked below 50.
Much of this poor competitive performance can be attributed
to the poor quality of public institutions and high
levels of corruption in the region as perceived by the
business community, states WEF’s chief economist.
Recent years have shown deterioration in the faith of Latin
American citizens in market economics to provide prosperity
for the poor as much as it has the upper income groups.
The most recent Latinobarómetro poll indicates
that 71 percent of respondents regionwide believe that
their country: “is governed for the benefit of
a few powerful interests.” The result of this
attitude has been a resurgence in populist political
movements throughout the region that seek to dismantle
market reforms that were implemented incompletely during
the 1990s. This gap in belief that market reforms can
strengthen democratic institutions and lead to better
life for everyone is particularly acute among disenfranchised
indigenous communities in the Andean countries and Central
America. If the faith of Latin Americans in democracy
is to be restored and strengthened, solutions must be
found for improving the economic lot of the majority
of citizens.
CIPE’s priorities for Latin American and the Caribbean are
designed to focus particular attention on improving
the institutions that will allow democracy and economies
to flourish. CIPE's network of business associations
and think tanks active throughout Latin America, has
taken a lead in sustaining reform efforts in the face
of severe strains. Partners and participants in various
CIPE programs throughout the region have been advocating
for institutional reforms that will penetrate deeper
into the fabric of society to yield real change.
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