TIME: Almanac 1993/TIME Almanac 1993.iso/time/112789/11278900.058

Text File | 1992-09-23 | 10.6 KB | 224 lines

                                                                                INTERVIEW, Page 12

On Drugs, Debt and Poverty


Venezuela's CARLOS ANDRES PEREZ sees the Third World as a
revolution in the making unless richer nations come to the
rescue

By John Moody and Strobe Talbott and Andres Perez


    Q. Mr. President, you're seen as a spokesman for the Third
World. What should the relationship be between developing and
industrialized countries?

    A. First, the countries of Latin America must make
concerted efforts among themselves, then coordinate with other
developing countries so as to enhance our bargaining power.
There is a need for a new North-South summit that would deal
with some issues involving the security of the whole world. I
think we have to recognize that today's problems are global and
that interdependence is both a problem and a solution. That's
a central theme, and it's why a North-South conference is
indispensable.

    Today we can identify three problems that affect the North
and the South equally: debt, drug trafficking and the
environment. These are three fundamental problems about which
we could have a broad and constructive dialogue.

    Q. The Bush Administration has put forward the Brady Plan,
whereby the U.S. Government urges private banks to provide some
relief to debtor nations. Yet you've called it timid.

    A. The problem is that it's not a plan -- it's an idea.
What we call the Brady Plan is an extraordinary initiative. It
recognizes that debt is a political problem -- one of the major
issues of world security -- and not just a matter between U.S.
banks and Latin American nations. The Brady Plan has as its
basis the reduction of debt and the realization that the
countries of Latin America cannot continue servicing their debt
in the way the banks have obliged us to up to now. In the past
five years, Latin America has paid back the total amount of its
debt service, yet now it owes more than before. And what is the
result? The economic growth of Latin America is now zero. Our
countries have had to commit more than 50% of the value of our
exports to debt service. That's intolerable. No country in the
world can do this. If the U.S. was forced to accept these
conditions to pay its debt, that would be really disastrous.

    In order for the Brady Plan to be more than just an idea,
in order for it to work, the decision of the banks (to reduce
debt) must not be voluntary. The U.S. Government should modify
certain banking regulations to facilitate the concessions that
the debtor countries are asking for.

    American public opinion must understand that we are not
asking for a gift or for debt forgiveness. We want a system of
economic relations that will give us guarantees so we can plan
our economies and develop our countries.

    Also, it's just good business. The inability of (Latin
American) countries to pay their debt has created another
problem that is even more damaging than the debt burden itself:
an inability to import. Yet our countries are a market that is
indispensable to the growth of the industrialized nations. So
resolving the problem of debt means opening markets to the
industrialized countries.

    In the 1970s Latin America imported from the U.S.
significant amounts of goods. In the 1980s that flow dropped as
much as 80% in some areas, such as automobiles and tractors. The
decrease was a fundamental cause of the great fiscal deficit of
the U.S. The recovery of Latin America's economy should have the
same significance for the U.S. as Europe's recovery had during
the Marshall Plan.

    Q. What must the Latin American debtor nations themselves
do as part of this process?

    A. If we don't reform our economies, we would just fall
back in the trap. Whatever accords we reach (with the lenders
and international bodies) would have to be conditioned on
adjustments that we make in our own economic systems. We've got
to be able to ensure that the resources generated from debt
reduction and new financing are used according to very specific
investment norms and according to economic procedures in line
with our realities.

    Q. You are a lifelong socialist. Yet now you are relying on
market mechanisms, privatization, letting prices and interest
rates find their own levels. It looks like an economic
philosophy closer to Ronald Reagan's and Margaret Thatcher's.
What's socialist about it?

    A. I know that the word socialism smells like the devil in
the U.S., but it shouldn't be that way. The Communists
expropriated the word socialism, so people now identify it with
Marxism-Leninism.

    What we're doing is not a contradiction of our ideology.
Price controls were a consequence of the lack of markets, the
lack of development and the existence of monopolies and
oligopolies. These deficiencies required policies that should
have been temporary but became permanent. Now we're correcting
past errors. What is dramatic is that we're doing it all at
once.

    Q. The other two problems you stressed were drugs and the
environment.

    A. Drug trafficking has two facets: production and demand.
If there were no demand, there would be no production. But
production has many facets of its own, among them the poverty
of our peasants in Bolivia, Peru and Colombia.

    We have to find a substitute crop (for coca), and the
economic and technical resources, as well as the political will,
of the North must play a role. We must attack this crime without
borders with a policy without borders. Otherwise we will never
be able to eliminate it.

    As for the environment, Europe and the U.S. have caused
great damage, but we (in the Third World) have also contributed.
In Latin America we have the great Amazon region. The great
depredator of the environment is misery and poverty. If we don't
correct the problem in countries that still have great
ecological resources, then humanity will see itself in the long
term confronting a tragedy of survival.

    Q. Venezuela has recently joined the Non-Aligned Movement.
There's a view in Washington that the NAM is less relevant and
coherent than in the past, that it has split up into regional
and parochial groups. So you've joined a club just at the point
when that club might be going out of business. How would you
respond to that?

    A. People in Washington should realize that the world is
changing. Five years ago, who would have hoped for the
extraordinary opening in East-West relations? I know that the
Non-Aligned Movement, which represents some 120 nations, is
often criticized, especially by industrialized countries, for
its radical positions and for the way it acts in concert. But
the fact remains that the Non-Aligned Movement has led to a new
awareness among developing countries. The purpose is not
conflict and confrontation, but dialogue.

    It's true that recently there has been a lack of coherence
in the developing world. That has been one of the most worrying
factors of the 1980s. This has been a perverse decade, a
profound crisis for all of our countries. Economic problems are
more serious than they've ever been. The poverty of our
countries consists not just of groups of people in misery, which
is still the case in the developed countries. For us, poverty
is taking on structural characteristics that really threaten the
future of humanity. We are all feeling this, and it's driving
us toward convergence. The Non-Aligned Movement is part of that
convergence.

    Q. What do you mean by convergence?

    A. I mean a consensus among all the countries in the world
on the essential problems from which the developing countries
are suffering. In general, that the political struggle (between
North and South) has been de-ideologized.

    I wouldn't say that I put all my hope in the Non-Aligned
Movement. Absolutely not. But it's an organization that could
serve the right objectives, and it could increase our power of
negotiation if we know how to use it. No doubt the problems of
Latin America are different from those of Africa or Asia. But
there is a common denominator, and it's our shared need to exert
pressure on the developing world in a determined way.

    Q. When you talk about common denominators and exerting
pressure on the industrialized North, are you advocating a
debtors' cartel?

    A. No. Such a thing would be an act of suicide -- and of
collective suicide. Theoretically, we might have the power to
provoke a great worldwide financial crisis that would be a
catastrophe for the industrialized countries. But we would also
suffer. So this would be like the biblical story of Samson
pulling the temple down on his head.

    Q. Countries like Venezuela, when they got into economic
trouble in the past, used to be able to say to the U.S. "Watch
out or we may go Communist. Help us." Isn't that now changing?

    A. The ghost of Communism has done much damage to relations
between the U.S. and Latin America. Under the pretext of
defending the region from Communism, the U.S. supported
military dictatorships. This was a terrible error. Now we don't
need to look for ghosts. We have realities. If the problems that
our countries face are not resolved, the social explosions would
be of a magnitude previously unimagined. I'm not just imagining
this. The world today is much more complex. Before the days of
mass media, radio and television, the poor were more resigned
to their fate. Without television, they didn't have any
possibility for comparison. That's why today's poverty is more
dangerous and could provoke terrible social upheavals -- a Latin
America in effervescent rebellion. We are facing certain danger.
If we don't deal with this catastrophe, military dictatorships
could come back.

    Q. What is the ghost we have to be frightened of today?

    A. The immense gap that is opening up because poverty is
now intolerable. And the poor man now knows how poor he is. He
has his transistor radio. That's not a ghost but reality.

    Q. Did the price riots that flared up last February here in
Caracas and left 300 dead provide a glimmer of that danger?

    A. I think so. That tremendous social explosion came about
because of the dammed-up frustration of the past eight years,
the decline in living standards. Now, this year, in Venezuela
we're going to have a dramatic drop, almost 10%, in our gross
national product as a result of our adjustment measures. If we
don't straighten out this situation, if we don't have the
resources to confront this violent decline, the social situation
will reach intolerable extremes. And it's not just us; all the
countries of Latin America are suffering.