June 19th, 2008
Markets, not aid, are the solution
Published in The Miami Herald
June 19, 2008
”Global growth is the big story of our times,” says Fareed Zakaria in his must-read book, The Post-American World. His subtitle — The Rise of the Rest — tells the story of why we’re at the cusp of a truly global order. Countries all over are growing, a trend that started in Asia but has spread to Central Europe, Latin America and Africa. Why ”the rest” are rising is a no-brainer: They are expanding the reach of markets at home while increasing exports.
Zakaria’s post-Americanism is not anti-Americanism. If, at the politico-military level, ours is a superpower world, in every other respect — industrial, financial, educational, social, cultural — ”the distribution of power is shifting.” The post-American world is being shaped ”from many places and by many people.” That’s good news, though the United States and everyone else must adjust.
The world still faces difficult challenges that ”are the product not of failure but of success.” Said differently, current problems are not zero-sum but potentially win-win. Sadly, governments in Bolivia, Cuba, Ecuador, Nicaragua and Venezuela as well as many citizens throughout Latin America partake of the zero-sum mind-set that only leads backward.
Take, for example, Cuba’s view on rising food costs expressed at the Food and Agriculture Organization meeting in Rome recently. First Vice President José Ramón Machado blasted a global economy built on ”poverty, inequality and injustice.” He tallied annual sums that should be funneled to countries in the South.
- Reducing NATO’s annual expenditures by 10 percent would free $100 billion.
- If all foreign debts were forgiven, the South would have an additional $345 billion.
- If the developed world met its commitment of contributing 0.7 percent of their Gross Domestic Product, the rest would have some $130 billion at their disposal.
Machado didn’t quite detail how the South would use these resources.
Soaring food costs are, of course, an urgent concern. Ethanol — especially if corn-based — is a factor. Exploding oil prices make growing, harvesting and marketing crops all the more expensive. Agricultural subsidies in developed countries and food export restrictions in others have further driven prices upward. In 2005-2006, record low food reserves worldwide compounded the effects of bad weather and reduced output.
Machado ignored most of these factors. Inequality and injustice abound, that’s true. Still, context and trends matter. Though inequality in Vietnam has increased, the Vietnamese are better off thanks to sustained economic growth. Injustice — which isn’t only social and economic — is best mitigated by a democratic rule of law. Poverty has markedly declined.
The Cuban government is stuck on an aid mentality. In Africa, for instance, many governments are bolstering credits, technology and infrastructure to support agriculture and facilitate exports. Unless the humanitarian challenge posed by food inflation is met, the world might lose the ground gained against poverty. Aid — which does have a time and place — is a stopgap, not a long-term solution.
Cuban agriculture is in a deplorable state. The country imports 85 percent of its food, most of it from the United States. Marabú and other plague-like weeds have overrun half of all arable land. For the past 15 years, the U.N. World Food Program has been providing Cuba with $2-3 million a year in aid.
Who’s responsible for this shameful situation? Neither the U.S. embargo nor an ”unjust” global economy is to blame. The real culprit is the anti-market pigheadedness that values so-called principles over the well-being of ordinary Cubans. Draw your own conclusion.
Raúl Castro has rightly placed food security at the center. If output increases, women will find it easier to feed their families and some of the material anxieties of daily life might recede. Urban Cubans might then ask: If peasants can produce and earn more on their own, why can’t we?
Castro, Machado and the others will continue talking the old talk even as their policies slowly allow Cubans to walk the new walk. Almost two years ago, a Gallup poll taken in Havana and Santiago had 75 percent saying they lacked the freedom to decide what to do with their lives. As economic opportunities arise, dispiritedness will ebb. I look forward to hearing ordinary Cubans talking the new talk.