In the brief period since this century began, globalization has presented Latin America with greater opportunities and greater risks than it has faced in a long time. Until very recently, opportunity came in the form of exceptional expansion of the global economy; today, the risk presents itself in the form of a financial crisis that began in the United States in 2007, evolved into a systemic disaster by 2008, and will very likely become, in 2009 and beyond, the worst economic recession in seven decades.
Recent events should lead political leaders in Latin America to two conclusions, one positive and one negative. On the positive side, the reforms undertaken in our countries since the late eighties and nineties have proven worthwhile. Lacking the solid base these reforms provided, the financial crisis would have completely devastated our economies by now.
The bad news is that Latin American political leaders will soon regret not having made further advances in these areas. It appears that the years of continuous economic growth brought about by globalization greatly undermined any sense of urgency to continue such reform processes.
In confronting the present crisis, the Latin American political leaders must be very conscious of history and avoid making the kinds of mistakes that led to dire consequences in the past. In particular, they must revisit the ways in which governments dealt with the shocks to the global economy in the seventies and eighties and realize the dreadful effects they had on our countries. Latin Americans should not commemorate 200 years of the beginning of their independence revolutions by turning back again to populism, isolation, and falling further behind the already developed countries.