Workshop on freedom and prosperity in Latin America

The Atlantic Council’s Freedom and Prosperity Project, on September 28, 2021, in collaboration with the Adrienne Arsht Latin America Center and Brazilian think tank Fundacao Getulio Vargas (FGV), hosts the first in a series of virtual workshops on strengthening economic freedom, rule of law, and representative government in different regions across the world.

The inaugural workshop focuses on Latin America, and convenes a small group of former senior officials, business leaders, and scholars from across the region to discuss the credibility of the project’s message and how to communicate the message to stakeholders in the region.

Here are the key takeaways:

Why the message is needed

Democracy is in retreat across Latin America. Populist and authoritarian governments are on the rise, and after decades of economic growth, Latin American economies are now on a downward trajectory. Living standards are in decline and millions are at risk of slipping back into poverty.

Partly to blame is the public’s rejection of the private sector as a key driver of economic growth. The fact that private enterprise is an essential factor in generating prosperity is no longer broadly accepted. Entrepreneurs drive innovation and economic growth but are now maligned by populist leaders looking for easy scapegoats.

Even economic and political success stories are under threat. Chile and Colombia, two countries that made great strides in the 21st century, have been rocked by widespread protests against economic inequality. Both countries appear to be turning away from the open and free principles that propelled their growth and are embracing more closed and controlled systems.

A new narrative is needed to advocate for policies and reforms that will build upon the improvements of the 21st century, and prevent decades of progress from being lost.

Learning from past successes and failures

Throughout the region there are telling examples of countries that have embraced the project’s message of economic and political openness and reaped substantial gains as a result. Conversely, countries that have adopted closed economic and political systems have seen standards of living decline and should serve as cautionary tales for the rest of the region.

In Brazil, for example, liberal democracy is associated with economic prosperity and rule of law. Even when high growth was achieved in non-democratic periods, the lack of open discussion created huge market distortions that only produced short-term gains. Balanced and stable economic growth that creates jobs and prosperity over the long term requires democracy.

El Salvador provides another contrast between an open and closed system. Following the end of civil war in 1992, the country was in ruins. To rebuild, the country embraced free market principles and by 1998, economic freedom was pegged above many developed countries, poverty was greatly reduced, institutions were strengthened, and the rule of law was bolstered. Unfortunately, in 2004, the government changed course and shifted away from prioritizing democracy and economic freedom. By 2009, poverty and corruption were again on the rise and El Salvador’s investment environment severely deteriorated.

Colombia and Venezuela perhaps showcase the starkest differences in human wellbeing that arise from free and unfree systems. Colombia was almost a failed state in 2002, but in the following years established strong institutions and widespread appreciation for political and economic freedoms. The government paid special attention to international metrics for the ease of doing business, and conditions improved across the whole of society, not just for the business elite. Meanwhile, Venezuela has gone from one of the wealthiest countries in the region to the poorest after it became a corrupt and incompetent dictatorship. Despite the high price of oil over the past two decades, government mismanagement devastated the economy, and brought about a precipitous drop in living standards.

One of the key factors that separates successful countries from the failures is whether the population takes ownership of reforms to open up the country. Reforms are lasting and meaningful when the population buys-in and the principles associated with open market reforms become ingrained in society. If reforms can last for the course of one generation, the population will identify with them and make it much harder for would-be authoritarians to change course.

A narrative to advance the project’s agenda

Any narrative around Freedom and Prosperity must first and foremost point out the decline in wellbeing that has accompanied the rise of authoritarian and populist governments. The project should communicate to people that their lives can be better off under representative governments. This is supported by data, which must be made clear in order to stave off political critique. Populist governments have taken control of the narrative and blame the private sector for the region’s woes instead of restrictive economic and civil policy.

Still, data can only go so far. Indices and frameworks that study the level of prosperity and freedom are helpful but must complemented by applicable reforms to facilitate movement up the country index rankings. As a next step, the project must identify what kind of reforms government institutions, politicians and civil society groups need to adopt to bring the message into focus and implement lasting change.

The right messenger(s)

A grassroots approach is needed because buy-in across the whole of society is essential.  Efforts to communicate this message will fall short if they do not come from credible, local voices. Youth and women, along with people from disparate political, ethnic, and socio-economic backgrounds must all be engaged. Greater economic and political freedom improves wellbeing for all people, and it is essential that a diverse array of messengers is able to speak to this fact.

This means enlisting the platforms of social media influencers and youth leaders, alongside traditional media outlets like television and radio. For the project’s message to make a lasting impression it must be widespread and easily digestible for the population at large. 

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