Beyond the Washington Consensus: A new job-based social contract in Latin America [Foreign Affairs En Español]
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07/14/2005 In the 1990s Latin America firmly embraced the economic reform package that has come to be called the Washington Consensus. The policies emphasized stabilization of prices to return developing countries to a path of sustainable growth—and structural adjustment measures to make economies more efficient and competitive. But after more than a decade of open market reforms and renewed democratic politics, there has been little growth or social progress in the region, causing a spiral of anxiety and deep frustration across countries. Economic activity in the last five years grew by only 2.4 percent on average, compared to 3.8 percent worldwide, and to 3 percent in the 1990s. The proportion of the poor, which had been declining, has increased since 2000, not only in Argentina, where poverty rates have doubled, but also in Bolivia, Peru, Uruguay, and Venezuela. Income inequality remains high. Public opinion polls by Latinobarometro show Latin Americans tired of fiscal austerity, record high unemployment, and stagnant wages, and resentful of privatization and other so-called Washington Consensus reforms. |