Clash of visions for Latin America

President Bush has a vision for Latin America: Build prosperity and stability through open economies and entrepreneurship, more hemispheric trade, and stronger democracies.

Mr. Bush will tout that formula when he meets with 32 leaders from the hemisphere at the Summit of the Americas in the Argentine resort of Mar del Plata beginning Friday.

Jostling for center stage will be a competing vision for Latin America from Venezuelan President Hugo Chávez, the man who would be this century's Fidel Castro, spreading what he calls "21st-century socialism" across the continent. With Venezuela's burgeoning oil revenues to subsidize his vision, the red-bereted Mr. Chávez offers this alternative to Bush's capitalism: heavy state economic intervention and social spending. In his worldview, economic integration means South America, shutting out the giant imperialist to the north.

"If Chávez has his way, Mar del Plata will be the battleground of models for Latin America's future," says Elías Pino Iturrieta, a historian at Universidad Católica Andrés Bello in Caracas, Venezuela. "He's made it very clear that his goal [for the summit] is to bury the proposal for a free-trade area of the Americas for good, and to slay imperialism while he's at it."

The clash of visions may well dominate the summit, in part because no dramatic conclusions are expected from the two-day gathering. But another key factor is that much of the Latin American public is skeptical of the US-backed open-economy model and is tempted - after decades of stubbornly high rates of poverty and joblessness - by an alternative. Chávez - who plans to join Argentine soccer legend Diego Maradona, Bolivian presidential candidate Evo Morales, and other luminaries at a "counter summit" of Latin leftists and anti-imperialists - says he expects the debate of visions to be "beautiful."

Indeed, Chávez may have reason to believe he has the southern winds in his sails. Latin America is leaning left, electing more left-of-center leaders promoting new ways to reduce poverty and preserve a disappearing middle class.

About half of the leaders Bush will meet were elected since the last regular Summit of the Americas in Quebec City in 2001, and a number of them, including the presidents of Brazil, Argentina, and Uruguay, now hail from the left. That trend is likely to continue, with nearly a dozen countries holding presidential elections over the next year, many experts say. Polls show Bolivia (voting next month) and Mexico (next summer) favoring leftist replacements of conservative leaders.

"If you look back to the Quebec summit, Chávez was the only leader criticizing the project for a free-trade area of the Americas and tight fiscal limits on government action while advocating more social spending," says Miguel Tinker Salas, Latin America specialist at Pomona College in Claremont, Calif. "Now those ideas have taken the stage."

One glaring problem for the Bush vision is that the economic model the president is selling has not lifted the masses of the population during the roughly two decades it has been applied. Economies are growing, but income gaps that make Latin America the world's least equitable region have not closed. Tens of millions of people live on less than $2 a day, while unemployment averages more than double the US rate and a majority of new jobs are created in the black market.

As a result, Bush may find it hard to win many debate points if he focuses on resuscitating the same free-trade-area (FTA) project first adopted a decade ago as a goal for the region. "There's a reaction in Latin America to liberal economic policies and to anything associated with what many people consider a failed experiment," says Mr. Tinker Salas. "For Bush to propose the same FTA all over again will only revive those old issues and convince people he is out of touch with the reality people have experienced."

What Bush has going for him is that the region's new leaders, though willing to accept help and favors from an oil-rich Chávez, have not rushed to return to the failed models of state-run economies and inflationary spending that prevailed during long decades of dictatorship. Nor do they want to shut the door on the United States.

Take Brazil's President Luiz Inacio Lula da Silva. A longtime labor leader, he was expected to turn to heavy government intervention but instead has relied on trade and fiscal discipline to boost the economy and create jobs. He will greet Bush in Brazil after the Americas summit.

"Leaders of the new Latin left have to speak a different rhetoric to very dissatisfied populations, but at the same time they are not straying too far outside the prevailing economic box," says Oscar Raúl Cardoso, a foreign affairs analyst here. "They have to maintain a different kind of bond with the people, but that doesn't mean they are going very far in Chávez's populist direction."

But Chávez is popular in some countries, such as Argentina, and leaders cannot disregard that, Mr. Cardoso notes. In Argentina, for example, Chávez has rescued a number of state-owned factories slated to close, and has breathed life into Argentine shipbuilding - and saved thousands of jobs - by ordering several ships.

"Chávez is having a good moment because he has a hen who lays golden eggs," says Venezuela's Pino. "It's hard to resist that kind of friend."

Latin leaders are not averse to using Chávez as a kind of smoke screen to hide behind. "They are happy to let Chávez do the dirty work they may believe in but don't want to do," says Cardoso. Many governments, he says, oppose a hemispheric free-trade area as envisioned by the US, "but instead of saying so they will point to Chávez and say there is no consensus."

In the end, Chávez may win the rhetorical battle but not many, if any, converts, experts say. "I don't see [the region making] any historic choice between Chávez and the US," says Pino. "But ... governments know they have to act to fill some big holes in the system. That can sound like they are moving in Chávez's direction."

Since taking office in 2001, President Bush has seen three South American nations elect left-leaning leaders, with others poised to do so in coming elections. But some nations in the region are shifting the other way. Moved to the left: • Argentina: President Néstor Kirchner took office May 2003.

• Brazil: President Luiz Inácio Lula da Silva took office January 2003.

• Uruguay: President Tabaré Vázquez took office March 2005.

Leaning left:

• Mexico: Manuel López Obrador, former mayor of Mexico City, leads in the polls for next year's presidential election.

Moved to the right:

• Dominican Republic: President Leonel Fernández elected August 2004.

• Guatemala: President Oscar Berger took office January 2004.

Closer ties to US:

• Colombia: President Álvaro Uribe took office August 2002.

• Paraguay: President Nicanor Duarte took office August 2003.