Trade Is Only Part of the Solution
From HispaniCon, a link to an article in the WaPo by Marcela Sanchez, who realizes that Free-Trade Agreements Only Go Half Way: Trade Is a Tool, Not a Strategy:
The truth of the matter is no country has yet tapped into an IDB program dedicated exclusively to “meet the challenges of the trade adjustment process.” Not enough attention and work has gone to what Robert Devlin of the IDB called “the real big chapter in the CAFTA story” — helping sectors adjust and compete. Devlin, deputy manager for integration, trade and regional programs, said the “natural tendency” in many regional governments has been to judiciously allocate most of their resources to training their officials to become better negotiators.
Alvaro Vargas Llosa, on page 133 of his book Liberty for Latin America : How to Undo Five Hundred Years of State Oppression explains what happened when political reforms were not matched by economic reform:
. . . the export boom injected life into the traditional government-individual relations. Instead of bringing about prosperity for large sectors of the population (with the exception of Argentina, where liberal capitalism made greater inroads and bred a high degree of development), the export era consolidated the predatory institutions and the divide between the oligarchy and the masses. The expansion of certain crops and industries might have brought new faces into the oligarchy with commercial interests enlarging a priviledge caste previously monopolized by landowners, but the touchstone of the system remained: economic success and failure were more than ever tied to the political network.
Ms Sanchez states, “Politically it couldn’t be more urgent for governments to do the hard work of preparing the countries for the transition”. The rule of law and the establishement of property rights would be a good place to start.