Globalization can benefit Latin America only if the free market system does a better job of meeting the needs of society, Mexican novelist Carlos Fuentes said at the inauguration of a cycle of seminars held by the IDB on the eve of the new century.

Mexican author Carlos Fuentes: “The market is an instrument, not a dogma.”

“The people will be enemies of the free market if the market is an enemy of the people,” said Fuentes at the Bank’s Washington, D.C., headquarters on October 19. His lecture was the first in the cycle, called Catedra Siglo XXI, being held to commemorate the IDB’s 40th anniversary.

“Private enterprise is interested in investing, producing, employing and making profits,” said Fuentes. “But in today’s world we also have to understand that the market is not an end in itself, but a means to achieve the shared welfare of a growing number of consumers. The market is an instrument, not a dogma.”

Similarly, globalization has both “vices and virtues,” said Fuentes. “It can create prosperity, but also exclusion and the creation of a permanent underclass.”

Raising the specter of what he called “global Darwinism,” Fuentes warned that globalization can exacerbate inequalities and double the number of poor people in the world in 30 years. He asked: “Is this what we want? The globalization of poverty?”
But globalization can bring enormous potential benefits, said Fuentes. For one, it will increase the speed and universality of communication. “There were times when authoritarian regimes could hide their misdeeds. But not anymore. Official impunity has become increasingly more difficult in a globalized world.”

Globalization has also brought technological advances, which bring benefits, but also dangers. When progress is so rapid, he said, countries unable to keep up will find themselves at a tremendous disadvantage.

Need for reforms. Gains in communication and technology will fuel the pace of investments. But here again, the benefits will not be automatic. Investments will benefit society only if countries do their part by strengthening security and improving health and education. Countries must make it clear, said Fuentes, that “society does not serve the market, but the citizen.”

Latin Americans will determine whether or not globalization will benefit their region, said Fuentes. He called on governments to carry out reforms, particularly of the state, which since World War II “grew but didn’t become stronger, remaining characterized by patronage and influence-peddling.” In contrast, governments in developed societies are strong though not big, and they function as regulators rather than owners, said Fuentes. A major task of a stronger state must be to reduce corruption. “It is perfectly easy to understand the reticence of international financial agencies, and even many transnational firms, to extend credits and invest in countries where corruption is flagrant,” he said.

“If we want to be respectable countries, and be worthy of credit and investment, we must eliminate corruption, which is the most brutal form of robbing the poor.”

Fuentes concluded by highlighting the role of culture in an increasingly globalized world. Culture has a life of its own, he said, and in Latin America “it continues without disruptions, in contrast to the disruptions and weaknesses of our political and economic life.”

In the 21st century, he said, Latin America must adjust politics and economics to its diverse sociocultural reality, in order to have “respect for the racial, ideological, sexual, linguistic, cultural and psychological differences within each of our societies.”

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