All Around the Neighborhood

A quick look at our amigos from Toronto to Tierra del Fuego

 Andean Region

On the great-grandfather clock of time, 500 years is about a second. And in that second, European mestizos have managed to plunder this region of nearly all its mineral wealth, subjugate the Indian populations, and force on them Western laws and the Catholic Church. But if the recent coup in Bolivia, the 2002 elections in Peru, and the 1999 coup in Ecuador demonstrated anything, it was this: That one second of history is coming to an end. The Indians have teamed up with disgruntled coca growers and traditionally strong mining unions. Together they are putting their feet down -- and the collective stomp is shaking the mountaintops. Not surprisingly, natural resources remain central: gas in Bolivia and Peru, oil in Ecuador. The FTAA may look good to the ones who are shipping out the goods but not to those manning the pipelines. What's more, a realistic assessment of the value of the coca industry in these countries is critical, but the trade reps in Miami will treat the crop like the plague. Further complicating matters: The Andean nations' individual wants as countries will override their need to band together as a trading bloc.

•Civil Strife Index ***

An increasingly volatile place to do business as Indians and coca growers join with traditional union powers to do the unthinkable: topple white-run governments.

•Life Expectancy 68 years

•Reefer Quality Index **

•Literacy Rate 88%

•Foreign Debt Index $58 billion

It roughly breaks down this way: Peru $42 billion, Bolivia $3 billion, Ecuador $13 billion. Those figures can mislead, however. Bolivia was allowed to cancel substantial debt three years ago; Peru eliminated ten percent of U.S. debt by agreeing to stronger environmental regulations; and Ecuador recently managed a slick restructuring plan that eased some of the pressure.

•Trade Power Index *

•Poverty Rate 57%

•Corruption Index ****

Business cartels must push product (one guess -- it's not coffee) through the Andean region; lots of cash helps them get past government and law enforcement, and closer to the finish line: the American border.


With 38 million people ready to run out any president who doesn't pay enough attention to domestic tranquility, the Argentine government must tread lightly when it comes to foreign investment, privatization, and international trade. After a financial free-for-all in the Nineties under former president Carlos Menem, the banking system collapsed in 2001. Angry citizens banging pots and pans brought down a succession of national leaders in December of that year. Current president Nestor Kirchner is very careful about what concessions he makes to the international community, whether it's grappling with the biggest loan default of all time ($155 billion) or further opening the country for trade. Not surprisingly, then, Argentina is Brazil's best buddy in the Mercosur common market (including neighbors Paraguay and Uruguay) that will try to wring trade concessions from the United States.

•Civil Strife Index **

What may have warranted one AK-47 three years ago gets two because of the continuing economic problems, labor unrest, and skyrocketing crime rate.

•Life Expectancy 73 years

•Reefer Quality Index *1/2

•Literacy Rate 97%

•Foreign Debt Index $255 billion

After being blackballed by all major financial institutions following last year's unprecedented default on International Monetary Fund loans, the worst may be over. Under president Nestor Kirchner, a payback plan is in the works.

•Trade Power Index **

•Poverty Rate 30%

•Corruption Index ****1/2

Argentina, long known as a place where a handful of cash gets you to the front of the line, has seen corruption worsen as an increase in political crime mirrors an increase in overall crime.


Big bad Brazil. With a population of more than 175 million and an economy that outranks Canada, Brazil is by far the largest country in South America. It's also the United States' most powerful rival for control of the FTAA. Brazil has rallied the other nations to the South American common market known as Mercosur in order to negotiate as a bloc. Now the success of the FTAA talks may hinge on steel and oranges, Brazil's biggest exports. The X factor is Brazilian president and former steelworker Luiz Inácio Lula da Silva, of the left-leaning Workers Party. Many feared he would plunge the country into a populist quagmire when elected a year ago. Instead he's won over the Brazilian business community and the IMF, spurring economic growth while promoting social reform. With Mercosur muscle behind him, Lula might well force into play a version of the FTAA that is more than just a rubber stamp of U.S. interests.

•Civil Strife Index ***

This country's crime rate continues to cause problems; drug gangs, in particular, control large portions of major cities and threaten to tie up police for years to come; the one positive thing for business is that labor unrest should be at a minimum these days with Lula, the former sindicalista, in power.

•Life Expectancy 68 years

•Reefer Quality Index **

•Literacy Rate 85%

•Foreign Debt Index $430 billion

It looks like a long, hard financial journey for Lula's administration. Still the IMF continues to feed Brazil's economy by loosening restrictions on its payback plan and even kicking in more loans this year.

•Trade Power Index *****

•Poverty Rate 37%

•Corruption Index ***1/2

Police are at war -- manning-the-barricades, fighting-in-the-streets war -- with large drug gangs in major Brazilian cities, while political and white-collar corruption increases.

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