04 April 1986 - 06 April 1986

The Emerging Politcal and Economic Roles of the Leading Latin American Nations and Their Likely Impact on the International Scene

Chair: The Rt Hon the Lord Chalfont OBE MC PC

After a three-year interval, the Foundation took up a Latin American theme on the weekend 4-6 April. The title of the conference was "The emerging political and economic roles of the leading Latin American nations and their likely impact on the international scene". Lord Chalfont took the chair. There was only a sparse attendance from countries other than the US and UK, one each from Canada, Italy and Spain, a French Chief Economist from the World Bank and the German Director of the recently formed Institute for European-Latin American Relations at Madrid, which is mainly financed by the European Community.

The economic and foreign debt crisis of the Latin American countries was a principal subject of discussion. If this could not be overcome, Latin America would not have an emerging role and damage would spread from Latin America through the world economy. There was a strong group of participants for the economic discussion - central and private bankers, businessmen and academic economists. They drew a degree of hope from the recent fall in the price of oil, although they recognised that this made immediate, severe difficulties even more acute in the key case of Mexico. They paid tribute to the innovatory skills of the banks, which had brought about much quiet improvement in the debt position. But this would not be enough to solve the crisis. There were grave structural problems facing the Latin American economies - excessive dependence on commodities with weak prices, protectionism in world markets (especially in the form of the Common Agricultural Policy of the EC), a very low level of intra-regional trade, a wide and worsening gap in income distribution, restrictions on the importation of foreign enterprise and capital, loss-making nationalised enterprises providing jobs for political and military place-men, incoherent state intervention, overvalued currencies favouring the import propensity of the urban middle classes, etc. There were signs that the new, more democratic regimes which had come to power in several of the leading Latin American states were prepared to try to tackle these ills, but world economic recovery and elasticity in the world banking system would not be enough to provide them with the room for manoeuvre which they needed. More money, new finance, would be needed, and much of it would have to come either directly or indirectly from governments. It was not a question of bailing out the banks or funding a haemorrhage of capital, but of providing room for local initiatives for economic improvement to take hold, so that confidence could grow again, capital flow back and a new start be made in the direction of economic take-off.

Against the background of these fundamental economic issues the conference had difficulty in forming a clear view of the political prospects in the various countries of Latin America. Military regimes had failed to cope with their countries’ problems and had lost credit, but it was far from certain that the new civilian regimes could deliver satisfactory results for their peoples. There were no obvious signs of red revolution welling up, but there seemed to be an uneasy feeling at the conference that there could be unpredictable turns for the political worse unless the turn-around canvassed by the economists came about. The situation in Mexico was the most anxious-making, if only because of that country’s pre-eminent importance to its neighbour, the United States. Brazil was the country which came nearest to inspiring confidence. As yet it was nowhere near being an economic locomotive for Latin America, but it was nevertheless showing signs of becoming a 'power' in the international sense. A more profound examination of the political and social strengths and weaknesses of individual countries would have been illuminating, but the broad-brush approach at a two-day conference did not allow for this.

The discussion of the impact of Latin America on the international scene was the part of the conference which came closest to fireworks. This was because it enabled some of the participants to become eloquent about Nicaragua and to a lesser extent the Falklands. A curious symmetry emerged. American voices were disparaging about Britain's inability to take a view of Latin America beyond the Falklands, Belize and Grenada; and British voices were disparaging about the US Administration's obsession with east/west issues in Nicaragua which obstructed American attention to more important matters in Latin America as a whole. It had to be pointed out that Nicaragua and the Falklands were not what the conference was about, although both, especially the former, were important factors affecting the main subject matter of the conference. Interestingly, no one at the conference seemed to think that the Soviet Union or Cuba were at present prime actors on the South American stage. Although both were on the alert to penetrate where they could, they were not making headway. As regards Nicaragua, the position seemed to be that the Latin American Contadora Group was not succeeding in delivering containment, and the US government had therefore not yet had to choose definitely whether to go for containment or for overthrow. It was true, as some American voices claimed, that the application of American power created a disposition to negotiate; but it was also true, as some British voices claimed, that too great an application of power obstructed negotiations. In the absence of any authoritative spokesman for President Reagan's point of view, the discussion could not usefully be pursued further.

It was noted that the comprehensive pan-American institutions (OAS, ECLA, SELA) were achieving little, but various groupings formed by Latin American countries for specific purposes (e.g. the Contadora and Cartagena groups) were achieving a certain effectiveness. This was an important new development in regional diplomacy and perhaps pointed the direction in which the Latin American countries will move as they try to increase their role in world affairs, stimulated by pressures from outside their region. From the European side it was claimed that Europe was beginning to work back towards the sort of family relationship which it had with Latin America in the 19th Century, but the Americans seemed to be unconvinced. On the Falklands the readings on the conference's instruments seemed to be "peripheral”, "too difficult" and "no movement".

This Note reflects the Director’s personal impressions of the conference.  No participant is in any way committed to its content or expression.

Conference Chairman: The Rt Hon the Lord Chalfont OBE MC PC
Life Peer (Independent); Chairman, All Party Defence Group, House of Lords; Director, IBM UK Ltd, Lazard Bros & Co; President, Nottingham Building Society, Abington Corporation (Consultants) Ltd


Mr Colin Armstrong

Director, Inchcape International Ltd, London
Dr Harold Blakemore
Secretary, Institute of Latin American Studies, and Reader in Latin American History, University of London; Co-editor, Journal of Latin American Studies; Member, Latin American Trade Advisory Group
Dr D A Brading
Director, Centre of Latin-American Studies, University of Cambridge; Fellow, St Edmund’s House, Cambridge
Mr Hugh Carless CMG
Company Director and consultant
Mr Malcolm Deas
Fellow, St Antony’s College, Oxford; Lecturer in Politics and Government of Latin America, University of Oxford
Mr Robert Ely
Head of Public Affairs, British American Tobacco Co Ltd, London
Mr Richard Gott
Features Editor, The Guardian
Sir John Hall Bt
Managing Director, European Brazilian Bank Ltd, London
Mr John Heath CMG
Director General, Canning House, London
The Rt Hon the Lord Kennet
Life Peer, SDP Spokesman on Foreign Affairs and Defence in House of Lords
Mr P H Kent
Head of International Division, Bank of England, London
The Rt Hon the Viscount Montgomery of Alamein CBE
Managing Director, Terimar Services (Overseas Consultancy); Director, Northern Engineering Industries, Korn/Ferry International; President, Anglo-Argentine Society
Mr Hugh O'Shaughnessy
Latin America Correspondent, The Observer; Vice-Chairman, Institute for European Latin American Relations (IRELA); Member, Board of Management, Latin American Bureau, Latin America and the Caribbean Committee, Christian Aid
Dr George Philip
Lecturer in Latin American Politics, Department of Government, London School of Economics and Institute of Latin American Studies, University of London
Mr David Stephen
Head of External Relations, Commonwealth Development Corporation; Chairman, Latin America Study Group, Royal Institute of International Affairs
Mr David Thomas CMG
Assistant Under-Secretary of State, FCO
Mrs Rosemary Thorp
Fellow, St Antony’s College, Oxford; Lecturer in the Economics of Latin America, University of Oxford
Mr Anthony Westnedge
Export Director, John Walker & Sons Ltd, London; Chairman, Anglo-Venezuelan Society; Member, Executive Committee of the Hispanic and Luso Brazilian Council, Latin Trade Advisory Group, Caribbean Committee of the London Chamber of Commerce and Industry, General Council of the Conservative Foreign and Commonwealth Council

Dr F W Orde Morton

Associate Secretary, Brascan Ltd, Toronto

Herr Wolf Grabendorff

Director, Institute for European-Latin American Relations (IRELA), Madrid

Signor Mario Luciolli

Retired Member of the Italian Diplomatic Service

Dr Esperanza Dur
Research Fellow, The Royal Institute of International Affairs, Chatham House, London

Professor Angel Vi
Special Adviser to the Foreign Minister’s Cabinet, Ministerio de Asuntos Exteriores, Madrid

The Hon Richard Bloomfield

Director, World Peace Foundation, Boston, Mass
Professor Albert Fishlow
Professor of Economics, University of California, Berkeley; Member, Editorial Board, Foreign Policy and International Organization
Mr Donald Fox
Founding Partner, Fox, Glynn & Melamed (Attorneys), New York.; Member, Executive Committee, American Association-International Commission of Jurists, Council on Foreign Relations and American Law Institute
Mr Jack Guenther
Senior Vice President and Senior Adviser for International Operations, Citibank NA, New York
Mr Gonzalo de las Heras
Senior Vice President, and Head of Latin America Department, Morgan Guaranty Trust Company, New York
Mr Richard Ogden
Counsellor for Economic Affairs, United States Embassy, London
The Hon William Rogers
Partner, Arnold & Porter (Attorneys), Washington DC
Professor Peter Smith
Professor of History and Political Science, Massachusetts Institute of Technology
Professor Alfred Stepan
Dean, School of International and Public Affairs, Columbia University, New York
Mr Reuben Sternfeld
Special Representative in Europe, Inter-American Development Bank

Monsieur Guy Pfeffermann

Chief Economist, Latin America and Caribbean, The World Bank