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23–693PDF 2006

KEEPING DEMOCRACY ON TRACK:

HOTSPOTS IN LATIN AMERICA

HEARING

BEFORE THE

SUBCOMMITTEE ON 

THE WESTERN HEMISPHERE

OF THE

COMMITTEE ON 

INTERNATIONAL RELATIONS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

SEPTEMBER 28, 2005

Serial No. 109–126

Printed for the use of the Committee on International Relations

(

Available via the World Wide Web: http://www.house.gov/international—relations 

(II)

COMMITTEE ON INTERNATIONAL RELATIONS 

HENRY J. HYDE, Illinois, Chairman 

JAMES A. LEACH, Iowa 

CHRISTOPHER H. SMITH, New Jersey, 

Vice Chairman 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

EDWARD R. ROYCE, California 

PETER T. KING, New York 

STEVE CHABOT, Ohio 

THOMAS G. TANCREDO, Colorado 

RON PAUL, Texas 

DARRELL ISSA, California 

JEFF FLAKE, Arizona 

JO ANN DAVIS, Virginia 

MARK GREEN, Wisconsin 

JERRY WELLER, Illinois 

MIKE PENCE, Indiana 

THADDEUS G. MCCOTTER, Michigan 

KATHERINE HARRIS, Florida 

JOE WILSON, South Carolina 

JOHN BOOZMAN, Arkansas 

J. GRESHAM BARRETT, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL MCCAUL, Texas 

TED POE, Texas 

TOM LANTOS, California 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

ROBERT MENENDEZ, New Jersey 

SHERROD BROWN, Ohio 

BRAD SHERMAN, California 

ROBERT WEXLER, Florida 

ELIOT L. ENGEL, New York 

WILLIAM D. DELAHUNT, Massachusetts 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

JOSEPH CROWLEY, New York 

EARL BLUMENAUER, Oregon 

SHELLEY BERKLEY, Nevada 

GRACE F. NAPOLITANO, California 

ADAM B. SCHIFF, California 

DIANE E. WATSON, California 

ADAM SMITH, Washington 

BETTY MCCOLLUM, Minnesota 

BEN CHANDLER, Kentucky 

DENNIS A. CARDOZA, California 

THOMAS E. MOONEY, SR., Staff Director/General Counsel 

ROBERT R. KING, Democratic Staff Director 

SUBCOMMITTEE ON THE WESTERN HEMISPHERE

DAN BURTON, Indiana, Chairman 

RON PAUL, Texas 

JERRY WELLER, Illinois, Vice Chairman 

KATHERINE HARRIS, Florida 

JAMES A. LEACH, Iowa 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

CONNIE MACK, Florida 

MICHAEL MCCAUL, Texas 

ROBERT MENENDEZ, New Jersey 

GRACE NAPOLITANO, California 

GREGORY W. MEEKS, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

WILLIAM D. DELAHUNT, Massachusetts 

BARBARA LEE, California 

MARK WALKER, Subcommittee Staff Director 

JESSICA LEWIS, Democratic Professional Staff Member 

DAN S. GETZ, Professional Staff Member 

BRIAN WANKO, Staff Associate 

(III)

C O N T E N T S 

Page

WITNESSES 

The Honorable Norm Coleman, a United States Senator from the State of 

Minnesota ............................................................................................................. 3

The Honorable Charles A. Shapiro, Principal Deputy Assistant Secretary, 

Bureau of Western Hemisphere Affairs, U.S. Department of State ................ 19

The Honorable Adolfo A. Franco, Assistant Administrator, Bureau for Latin 

America and the Caribbean, United States Agency for International Development .................................................................................................................. 26

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Dan Burton, a Representative in Congress from the State 

of Indiana, and Chairman, Subcommittee on the Western Hemisphere: 

Prepared statement .............................................................................................. 2

The Honorable Norm Coleman: Prepared statement ........................................... 7

The Honorable Charles A. Shapiro: Prepared statement ..................................... 21

The Honorable Adolfo A. Franco: Prepared statement ......................................... 28

Arturo A. Valenzuela, Ph.D., Director, Center for Latin American Studies, 

Georgetown University: Prepared statement ..................................................... 39

Jaime Daremblum, Ph.D., Director, Center for Latin American Studies, Hudson Institute: Prepared statement ...................................................................... 43

Susan Kaufman Purcell, Ph.D., Director, Center for Hemispheric Policy, University of Miami: Prepared statement ................................................................ 48

Michael Coppedge, Ph.D., Associate Professor, Department of Political 

Science, University of Notre Dame: Prepared statement ................................. 52

(1)

KEEPING DEMOCRACY ON TRACK: 

HOTSPOTS IN LATIN AMERICA 

WEDNESDAY, SEPTEMBER 28, 2005

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON THE WESTERN HEMISPHERE, COMMITTEE ON INTERNATIONAL RELATIONS, Washington, DC. 

The Subcommittee met, pursuant to notice, at 1:50 p.m., room 

2172, Rayburn House Office Building, The Honorable Dan Burton 

(Chairman of the Subcommittee) presiding. 

Mr. BURTON. Good afternoon, a quorum being present, the Subcommittee on Western Hemisphere will come to order. I ask unanimous consent that all Members’ and witnesses’ written and opening statements be included in the record and without objection, so 

ordered. I ask unanimous consent that all articles, exhibits and extraneous or tabular material referred to by Members or witnesses 

be included in the record and without objection, so ordered. I ask 

unanimous consent that any Member who may attend today’s hearing will be considered a Member of the Subcommittee for the purposes of receiving testimony and questioning witnesses after Subcommittee Members have been given the opportunity to do so and 

without objection, so ordered. 

Before we have opening statements today, we are going to start 

off with, since we have a guest from the other side of the Capitol, 

Senator Norm Coleman, a good friend of ours. Senator Coleman is 

the Chairman of the Western Hemisphere Subcommittee of the 

Senate Foreign Relations Committee and is a very good Senator 

from the great State of Minnesota. He and I have worked together 

in the past and we have a great working relationship and I really 

appreciate you coming over here today, Norm. 

He has traveled to Colombia, Mexico, Brazil, Argentina, Uruguay, Chile, Venezuela, all within the last year and he is really 

working hard on his Subcommittee, dealing with the same problems that we are facing on this side of the aisle. I would like to 

talk to you when we get some time about some of the problems we 

face in Venezuela and Central America that you have a mutual 

concern about. 

Senator Coleman was sworn in as a United States Senator on 

January 7, 2003. He is highly regarded in both Chambers and 

across party lines as one of the hardest working and most thoughtful of legislators. Senator Coleman chairs, as I said, the Senate 

Foreign Relations Subcommittee on Western Hemisphere and he is 

also a Member of the Senate Small Business and Entrepreneurship 

Committee. He is a co-Founder and is now co-Chairman of the BiVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
2

partisan Senate Biofuels Caucus and has led the effort to expand 

national renewable fuel initiatives, which is very important right 

now. He also serves as the Chairman of the Senate Governmental 

Affairs Committee’s Permanent Subcommittee on Investigation. 

So, Senator Coleman, thank you very much for being here and 

we are going to change our procedure so you can testify, because 

I know you have business on the other side of the Capitol. So, Senator Coleman. 

[The prepared statement of Mr. Burton follows:]

PREPARED STATEMENT OF THE HONORABLE DAN BURTON, A REPRESENTATIVE IN CON- GRESS FROM THE STATE OF INDIANA, AND CHAIRMAN, SUBCOMMITTEE ON THE

WESTERN HEMISPHERE

Over the last several months, the Western Hemisphere Subcommittee has convened hearings on topics ranging from democratization, diplomacy, transparency 

and the rule of law, gangs and crime, the rise and influence of China in Latin America, and oppression and human rights violations in Cuba. From these hearings and 

this hearing today, we hope to achieve a better understanding of the opportunities 

to strengthen U.S. foreign policy in the region. 

Today we are convening a follow-up to our first hearing on Democracy in Latin 

America back in March 2005, to take stock of the state of democracy and dynamics 

in some of the hotspots. Your testimony today will help the Subcommittee in making 

an assessment of U.S. policies to advance and reinforce democratic reforms and institutional capacity within Latin America and potential threats to stability. 

Over the last ten months, Members of this Subcommittee have closely monitored 

political developments in Bolivia, Ecuador, Venezuela, and Nicaragua and other 

countries which are witnessing transitions marred by violence, erosion of freedom, 

and extra-constitutional mechanisms for succession. 

Our friends in Latin America face problems ranging from high unemployment, 

high crime, narcotics trafficking and related violence, and other social problems that 

threaten stability. Reducing these problems while at the same time boosting economic output and attracting new trade and investment is essential to creating conditions that foster stable development of democratic institutions and societies. In 

some Andean countries, political institutions are extremely fragile, the courts are 

in shambles, there is a lack of political leadership, no contract sanctity, no enforcement, no legal certainty, and no predictability. These conditions allow for the erosion of political freedoms and further weakening of democratic institutions. Conducting democratic elections in this environment is fraught with difficulty. 

President Chavez of Venezuela, although democratically elected, is seemingly and 

deliberately moving away from the democratic principles he once claimed to espouse. 

Colombia continues to be threatened by drug trafficking organizations and by guerrilla groups. Argentina, Bolivia and Ecuador have had turbulent, extra-constitutional successions of their presidencies since 2000. And Nicaragua is not trailing far 

behind. 

This week I introduced H. Con. Resolution 252 condemning the recent actions of 

the Nicaraguan Congress. One week ago, the Nicaraguan Congress stripped three 

Cabinet members, including Interior Minister Julio Vega and Agriculture Minister 

Mario Salvo, of their legal immunity from criminal prosecution, due to alleged campaign fund irregularities, dating back to the 2001/2002 elections. These latest developments continue to demonstrate the deteriorating political landscape in Nicaragua, 

between President Bolan ̃ os and his supporters, and the opposition ‘‘Pact’’ Members 

in Congress. 

Elsewhere in Central America, in El Salvador, Honduras, and Guatemala, political corruption and a growing outbreak of violent crimes, especially by gangs, have 

posed serious challenges to these young democracies. Drug trafficking, HIV/AIDS, 

poverty, lawlessness and crime are straining resources in the Caribbean, already 

stretched thin by hurricane reconstruction. 

Security, democratic reform, and long-term prosperity are becoming elusive 

goals—yet we must continue to look for ways to rally behind and support our neighbors in Latin America to address the challenges of poverty, political and economic 

instability, and the many other ills which threaten to undermine the future course 

of democracy in our hemisphere. 

Some observers say the United States is pushing too hard in countries like Venezuela, Haiti, Bolivia, and Ecuador. Others who have testified before the Subcommittee have argued it is a lack of leadership in Latin America, not U.S. interVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6621 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
3

vention or benign neglect, that is to blame. I believe there is some fine tuning to 

be made in our approach, and I believe this Administration is making progress to 

better engage in the region’s democratic and economic growth. 

Within the last two weeks I met with President Uribe of Colombia, President Toledo of Peru, President Chavez of Venezuela, President Maduro of Honduras, and 

President Bolanos of Nicaragua. Many of my colleagues joined in these and other 

meetings with heads of states in Latin America visiting the United States on the 

occasion of the UN General Assembly. From these meetings I believe we have many 

common social, economic, and security interests. From these meetings I fully appreciate that we must communicate and cooperate more effectively to realize opportunities to mobilize support of Latin American nations to further democracy and economic progress in the region. When we return from the recess in mid-October, we 

plan to conduct an oversight hearing of U.S. policy in the Caribbean region. We also 

intend to conduct oversight travel to Haiti in advance of critical elections scheduled 

there. I understand Secretary of State Condoleezza Rice and Deputy Assistant Secretary Shapiro visited Haiti yesterday. I look forward to hearing your assessment 

of the situation there. 

In meetings with numerous Heads of State over the last two weeks, I received 

assurances that they are all committed to political and economic stability. There 

were also warnings about political and ideological opponents to democracy and free 

markets. 

At our hearing today, we should remember the troubled past in the region, and 

address potential slippage where it is occurring. One important track that I advocate in this regard, is Congressional passage of the Andean Free-Trade agreement 

to boost economic activity and opportunity, fuel exports and foreign investment and 

help to alleviate poverty.

STATEMENT OF THE HONORABLE NORM COLEMAN, A UNITED 

STATES SENATOR FROM THE STATE OF MINNESOTA 

Senator COLEMAN. Thank you very, very much, Mr. Chairman. I 

thank you for your graciousness in accommodating my schedule 

and for giving me the opportunity to be here, and Ranking Member 

Menendez, thank you very, very much. 

The genius of our constitutional system is not only the interaction among the branches of government, but the dialogue within 

the Legislative Branch. It is a complicated world and a big government. Our only hope for doing a good job for the American people 

is for the 535 of us to share with each other the lessons we have 

learned in our particular areas of focus. I look forward to reciprocating the Chairman’s invitation, inviting him to share his 

thoughts with my colleagues in the Senate. And we should do that 

soon. 

I am pleased to report to the Committee some of my first-hand 

impressions about democracy in the region. I applaud the President’s focus on democracy around the world, particularly in the 

Middle East, which so desperately needs it. By comparison, Latin 

America is a great success story. Democracy exists in every country 

but one. But I think we are wise to resist the temptation to view 

democracy in Latin America as ‘‘mission accomplished.’’ As we follow the President’s lead in extending democracy around the world, 

we need to be as concerned about keeping nations in the democratic fold as we are about adding new states to it. 

During my travels, I have had the opportunity to visit some of 

the hotspots for democracy in the region. I traveled to Cuba in 

2003 as someone who had serious doubts about the effectiveness of 

our embargo in encouraging change on the island. I still believe the 

embargo has not hastened Cuba’s transition, but neither would lifting it. At a time when Castro has locked up dissidents for such offenses as having an independent library or belonging to Doctors 

4

Without Borders, I think it would be a mistake to open trade or 

travel with Cuba unless we get a serious commitment on human 

rights in return, and certainly we have not seen that to date. 

I returned this spring from my visit to Venezuela and meeting 

with President Chavez. After spending a couple of hours with 

President Chavez, I returned concerned as to where the country is 

now, but even more concerned as to where it is going. There is a 

growing polarization of the society. Non-governmental groups like 

Sumate are on trial for accepting small grants from the United 

States. Let me give you my fear and then I am going to give you 

my hope. My fear is that Venezuela is like boiling a frog. If I had 

a frog in my hand, Mr. Chairman, I could put it in this pitcher of 

water and if this pitcher of water was boiling hot, it would jump 

out just like that. But if I put it in the pitcher of water like it is, 

cold, and simply turned up the heat, that frog would be boiled to 

death. It would never jump out. 

As I look at Venezuela, you have a President who has been elected and if the election were held today, I think would probably be 

reelected. And if there is another election in 2008, probably reelected again. We are seeing a growing militarization, in terms of 

members of the cabinet, in terms of the governors of the various 

areas in Venezuela. When you talk to American business, they 

worry about the day-to-day interactions with military in the smallest of affairs and that causes me great concern. It causes me concern. 

But my hope is that we somehow overcome the rhetoric and overcome the fears and find ways to find some common ground, see if 

there is hope. We are an energy partner with Venezuela, in spite 

of some of the rhetoric. President Chavez, in fact, at one point said 

to me, ‘‘We could cut off Citgo tomorrow.’’ Well, you know, my comment was, ‘‘You could cut off your left arm, too, but, you know, it 

would not make you feel any better. China is a long way away from 

Venezuela. We pay top price. It is a lot cheaper to ship it here.’’ 

So in spite of the harmful rhetoric and other issues which cloud our 

bilateral relations with Venezuela, I truly believe we would make 

a mistake to feed a negative situation by demonizing President 

Chavez. We need to be engaged so we both have a clear sense of 

what is happening and respond to changes at the margin. I want 

to try to encourage a positive and I want to work with other countries in the region and that is important to shine a light on the 

negative. 

Brazil has a stake in stability in the region and President Chavez is out selling instability. That is going to affect the region. Colombia has a stake, Spain has a stake. And so what we need to do 

is work with others in the region who have an interest in the region, to lessen the tension and reduce the opportunity for discord 

and instability. 

Brazil’s Government is also on the rocks. We should pay attention to events here, because the future course of Brazil will have 

a major impact on the region. Half the continent’s people, half the 

continent’s resources are in Brazil. One quarter of the continent’s 

population is in Sao Paulo alone. Corruption charges against President Lula could have brought down the government or thrown the 

economy into disarray. The fact that they have not, I think, illusVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6601 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
5

trates Brazil’s political maturity. We are fortunate, also, that the 

scandal has fallen near the end of his term and the calendar can 

remove him from the office. But I think it is fair to say in Brazil 

that economic stability has trumped political advantage. President 

Lula will stay in office and that is a good thing, that is a good 

thing. 

The United States clearly has an important leadership role to 

play in supporting democracy in Latin America. But we also need 

to understand that one skill of good leaders is their ability to listen. In my travels and relations with people in this hemisphere, I 

have always tried to go with an open mind and open ears, to learn 

more than to teach. With that in mind, permit me to reflect on 

three other hotspots I have not yet visited, but remain of concern 

to me. 

In my judgment, the Andes region is a special concern. Democracy has weakened Bolivia and Ecuador. And President Toledo in 

Peru does not have much support. He was here last week, he is a 

very impressive man. But he does not have much popular support. 

In many ways, it is a question of giving the positive results of democracy a chance to ripen in the face of indigenous movements 

that often work outside the democratic system. 

Moving north to Nicaragua, President Bolan ̃ os is in a political 

squeeze play between Daniel Ortega and the former President 

Alema ́n has created an odd dynamic of uniting outsiders who do 

not agree on anything but the desire to get back on the inside. 

President Bolan ̃ os’ courage to expose the corruption of the previous 

administration was important for official integrity and accountability, but he is paying a heavy price for sweeping it out from 

under the rug. 

And the instability in Haiti continues. Haiti remains polarized 

and violent. We can look to the elections later this year with some 

hope, but the reality is that progress in Haiti is going to require 

some considerable attention for years to come. What was uplifting 

about my most recent visits in Brazil and Uruguay and Chile was 

the commitment of other members of the region to continue to stick 

it out in Haiti, to be there with troops on the ground and understanding the election is not the end of the process, but simply a 

step along the road of the process to stability. 

A number of factors help explain democracy’s weakness in these 

hotspots. First is economic disparity and poverty. Latin America 

has the widest income disparity of any world region. A study by 

UNDP found that half of Latin American’s would trade in their democracy on an improvement in their pocketbooks. I worry about 

unfulfilled expectations, that we are building up democracy, the 

latest trade agreement, to equal the end of poverty. These things 

are important but should not be oversold. 

The second hurdle is illegal drugs and the criminal culture they 

create. Crime impedes economic development and causes people to 

lose faith in their governments. Corruption eats away at the whole 

government and makes the country inhospitable for business. 

Weapons add fuel to the fire. 

The third issue is learning the right lessons of history. The legacy of the strongman casts a long shadow. If people expect their 

Presidents to be all powerful caudillos, you deprive them of the real 

6

powers to get things done. They are setting themselves up for disappointment. The inability of leaders to seek re-election makes 

them instant lame ducks and contributes to the problems of 

unfulfilled expectations. All these unmet expectations are fertile 

ground for the empty promises of populism. 

How might the United States support democracy in Latin America? I would like, Mr. Chairman, to offer eight policy recommendations. 

One, we need comprehensive relationships. U.S. policy needs to 

be broadly focused in support of the institutions and economic 

growth, not just focused on counternarcotics. 

Two, we need to engage in exchanges where parties in the region 

gather as equals to listen and learn. We need to make student 

visas more accessible. We need to engage with young, rising political figures. We need to add flexibility to the American Service 

Members Protection Act so that foreign military training in Latin 

America is not cut off over differences over the International Criminal Court. Is it not better for Latin military leaders to get training 

by Americans, who will instruct them in democracy, civilian control, and human rights, rather than leaving them to learn the tools 

of oppression from China? 

Third, we need to support the Millennium Challenge Account. It 

will boost democracy and economic growth by supporting poverty 

reduction in countries that are making an investment in democratic institutions, the rule of law, and the education of their people. 

Four, we need to encourage fair elections. Election monitoring 

must begin months before the election. The U.S. should not take 

a side, but must insist on fairness. Elections also need to be a true 

reflection of the will of the people, not the result of a backroom 

deal by leaders of a political party. Political parties must become 

more democratic within themselves. 

Five, we need to reach out to responsible leftists like President 

Lula of Brazil, President Lagos of Chile, or President Vasquez in 

Uruguay. The United States needs to engage and cooperate with 

people who are democratically elected, regardless of their ideological stripes, as long as those leaders are committed to democracy 

and rule of law. Democracy is a process, not an outcome. 

Number six, we need to encourage private property ownership. 

We know that if you give a man a fish, you feed him for a day. 

If you teach him to fish, he feeds himself for a lifetime. But real 

change in society happens when you help him to buy the pond. 

Ownership is a powerful tool in fighting poverty and crime and 

gives people more of a stake in their societies. 

Number seven, we need to hold up positive developments in the 

region. Latin American states may not be able to relate to the 

United States’ experience. But if Chile can progress from Pinochet 

to a stable and prosperous country with elections coming up, why 

not everyone else? 

And finally, number eight, we need to forge listening relationships. We need to recognize even as the world’s superpower that 

Brazil has a lot more influence with Chavez than we do. One of the 

things we will no doubt hear is that the best way to combat populism is by showing that democratic leaders care for the poor and 

7

have a plan for them. And we have to do it not just because it 

works to build democracy, but because we actually have a heart for 

those who are crushed by poverty and injustice. 

Emerging leaders in the region are not looking for a lecture. 

They are hoping for an example of democratic values at work and 

that is what should guide us. And that, in the end, I believe, will 

build a stronger Latin America, and in the end for us, Mr. Chairman, a stronger region. And we have a stake in that region being 

very strong as we look to the future. 

Thank you for the opportunity to be with you, Mr. Chairman. 

[The prepared statement of Senator Coleman follows:]

PREPARED STATEMENT OF THE HONORABLE NORM COLEMAN, A UNITED STATES

SENATOR FROM THE STATE OF MINNESOTA

I’m pleased to report to the committee some of my first hand impressions about 

democracy in the region. I applaud the President’s focus on democracy around the 

world, particularly in the Middle East, which so desperately needs it. By comparison, Latin America is a great success story—democracy exists in every country but 

one. 

Yet I think we are wise to resist the temptation to view democracy in Latin America as ‘‘mission accomplished.’’ As we follow the president’s lead on extending democracy around the world, we need to be as concerned about keeping nations in the 

democratic fold as we are about adding new states to it. 

During my travels, I have had the opportunity to visit some of the ‘‘hot spots’’ for 

democracy in the region. 

I traveled to Cuba in 2003, as someone who had serious doubts about the effectiveness of our embargo in encouraging change on the island. I still believe the embargo has not hastened Cuba’s transition, but neither would lifting it. At a time 

when Castro has locked up dissidents for such offenses as having an independent 

library or belonging to Doctors Without Borders, I think it would be a mistake to 

open trade or travel with Cuba unless we can get a serious commitment and action 

on human rights in return. 

I returned hits spring from my visit to Venezuela and meeting with President 

Chavez concerned as to where the country is now, but even more so about where 

it is going. There is a growing militarization of the society. Non-governmental 

groups like Sumate are on trial for accepting small grants from the U.S. 

I fear that the state of democracy in Venezuela may be like boiling a frog. If you 

put a frog in a pot of boiling water, it will jump right out. But it you put a frog 

in cool water and slowly increase the temperature, the frog will eventually boil to 

death. Now President Chavez was elected democratically, and if elections were held 

today, I think he would probably be reelected. But my fear is that he is taking steps 

to slowly squeeze out democracy in Venezuela. 

But I am an optimist, and here is my hope—that the U.S. and Venezuela can 

overcome the rhetoric and the fears and build on the strong commercial ties we still 

have. When I met with President Chavez he commented that he could shut down 

Citgo tomorrow. I said, ‘‘Well, yes, but you could also cut off your right arm. Would 

that feel good?’’ The reality is that China is a long way away, and for the time 

being, it makes sense for Venezuela and the U.S. to continue being energy partners. 

I also think we would make a mistake to feed a negative situation by demonizing 

President Chavez. We need to be engaged, both so we have a clear sense of what 

is happening in Venezuela, and respond to changes at the margin—encouraging the 

positive and working with other countries in the region, like Brazil, Colombia, and 

Spain to shine a light on the negative. 

Brazil’s government is also on the rocks. We should pay attention to events here 

because the future course of the Brazil will have a major impact on the region—

half of the continent’s people, half of the continent’s resources are all in Brazil. One 

quarter of the continent’s population is in Sao Paolo alone. 

Corruption charges against President Lula could have brought down the government or thrown economy into disarray. That fact that they have not illustrates Brazil’s political maturity. Economic stability has trumped political advantage. We are 

also fortunate that this scandal has fallen near the end of his term and the calendar 

may remove him from office. 

The United States clearly has an important leadership role to play in supporting 

democracy in Latin America. But we also need to understand that one skill of good 

8

leaders is their ability to listen, and in my travels and in my relations with people 

in this hemisphere, I have always tried to go with an open mind and open ears, 

to learn more than to teach. With that in mind, permit me to reflect on three other 

hot spots I have not yet visited, but remain of concern to me. 

In my judgment the Andes region is a special concern. Democracy is weak in Bolivia and Ecuador, and even President Toledo in Peru does not have much support. 

In many ways it is a question of giving the positive results of democracy a chance 

to ripen in the face of indigenous and cocalero movements that often work outside 

the democratic system. 

Moving north to Nicaragua, President Bolan ̃ os is in a political squeeze play between Daniel Ortega and the former President Aleman. It’s created an odd dynamic 

of uniting outsiders who don’t agree on anything but their desire to get back on the 

inside. President Bolan ̃ os’ courage to expose the corruption of the previous administration was important for official integrity and accountability, but he is paying a 

heavy price for sweeping it out from under the rug. 

And the instability in Haiti continues. Haiti remains polarized and violent. We 

can look to the elections later this year with some hope, but the reality is that 

progress in Haiti is going to require considerable attention for years to come. 

A number of factors help to explain democracy’s weakness in these hot spots: 

First, there is economic disparity and poverty. Latin America has the widest income disparity of any world region. A study by UNDP found that half of Latin 

Americans would trade in their democracy on an improvement in their pocketbooks. 

I worry about unfulfilled expectations—that we are building up democracy or the 

latest trade agreement to equal the end of poverty. These things are important, but 

should not be oversold. 

The second hurdle is illegal drugs and the criminal culture they create. Crime impedes economic development, and causes people to lose faith in their governments. 

Corruption eats away at the whole government and makes country inhospitable for 

business. Weapons add fuel to the fire. 

A third issue is learning the right lessons of history. The legacy of the strongman 

casts a long shadow. If people expect their presidents to be all-powerful caudillos, 

yet deprive them of the real powers to get things done, they are setting themselves 

up for disappointment. The inability of leaders to seek reelection makes them instant lame ducks, and contributes to the problem of unfulfilled expectations. 

All of these unmet expectations are fertile ground for the empty promises of populism. 

How might the U.S. support democracy in Latin America? I would like to humbly 

offer eight policy recommendations:

1. We need comprehensive relationships. U.S. policy needs to be broadly focused, supportive of institutions and economic growth, not just focused on 

counternarcotics.

2. We need to engage in exchanges where parties in the region gather as equals 

to listen and learn. We need to make student visas more accessible. We need 

to engage with young rising political figures. We need add flexibility to the 

American Service Members Protection Act, so that foreign military training 

in Latin America is not cut off due to differences over the International 

Criminal Court. Isn’t it better for Latin military leaders to get training by 

Americans, who will instruct them in democracy, civilian control, human 

rights, rather than leaving them to learn tools of repression from the China?

3. We need to support the Millennium Challenge Account. It will boost democracy and economic growth by supporting poverty reduction in countries that 

are making an investment in democratic institutions, the rule of law, and the 

education of their people.

4. We need to encourage fair elections. Election monitoring must begin months 

before the election. The U.S. should not take a side, but must insist on fairness. Political parties must also become more democratic within themselves. 

Elections need to be a true reflection of the will of the people, not the result 

of a back room deal by party leaders.

5. We need to reach out to responsible Leftists, like Presidents Lula, Lagos, or 

even Vasquez in Uruguay. The U.S. needs to engage and cooperate with people who are democratically elected, regardless of their ideological stripes. Democracy is a process, not an outcome.

6. We need to encourage private property ownership. We know that if you give 

a man a fish you feed him for a day. If you teach him to fish, he can feed 

himself for a lifetime. But real change in society happens when you help him 

9

to buy the pond. Ownership is a powerful tool in fighting poverty and crime, 

and gives people more of a stake in their societies.

7. We need to hold up positive developments in the region. Latin American 

states may not be able to relate to the United States’ experience. But if Chile 

can progress from Pinochet to a stable and prosperous country with elections 

coming up, why not everyone else?

8. And finally, we need to forge listening relationships. We need to recognize, 

even as the world’s superpower, that Brazil has a lot more influence with 

Chavez than we do.

One of the things we will no doubt hear is that the best way to combat populism 

is by showing that democratic leaders care for the poor and have a plan to help 

them. And we have to do it not just because it works to build democracy, but because we actually have a heart for those crushed by poverty and injustice. 

Emerging leaders in the region aren’t looking for a lecture: they’re hoping for an 

example of democratic values at work.

Mr. BURTON. That was one of the best statements I have heard 

on Central and South America and the Caribbean in a long, long 

time. It was very insightful and we in the House normally have a 

little concern about the views of our fellows in the Senate. But in 

this case, I think we will use that as maybe a guide to solving some 

of the problems that we feel are very important. So thank you very 

much for that. We will take everything you said to heart and will 

now release you to go back to the lower—oh, did you want to make 

a comment? Yes, Mr. Menendez? 

Mr. MENENDEZ. Yes, I would like to make a comment. I appreciate the Senator coming and sharing his views as the Chair in the 

Senate Foreign Relations Committee of the Western Hemisphere 

Subcommittee. I just want to take an opportunity, as someone who 

has sat on this Committee for 13 years, to say that there are several things in your presentation that I fully agree with and I hope 

that you will use your leadership to try to make them a reality. 

When we talk about income disparity, when we talk about those 

within Latin America willing to change democracy for an improvement in their pocketbook, and when you say that our policy cannot 

simply be counternarcotics, you know, it is music, it is like a symphony to my ear, because this is exactly what I have been espousing here for quite some time. 

I hope that in addition to the Millennium Challenge Accounts, 

you will look at legislation that we have been pursuing for several 

years which is a Social Investment and Economic Development 

Fund that the Chairman and some of the Members of this Committee have signed onto and passed out of Subcommittee. Hopefully 

we will get an opportunity within the Full Committee. While the 

Millennium Challenge Account is good for some countries within 

the hemisphere, there are very few who actually benefit from it. 

And we are not going to change any of the dynamics, I believe, in 

the hemisphere, because we have some serious challenges as we 

move to a hearing on democracy here, our second hearing in this 

regard in 6 months. Things have gotten, in many respects, worse 

in many of these countries, not better. 

So I really would hope that you would consider that and look at 

that in the future. And we would love to work with you on that and 

we appreciate your views. The last point I just want to make is 

that sometimes, in being a beacon of light to the rest of the world, 

it is important to start shining at home. And poverty and injustice 

in this country, as the result of Hurricane Katrina that came vivVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6601 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
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idly to the Nation’s attention, is something we need to work on, as 

well, as we move toward alleviating poverty and injustice in this 

hemisphere. Thank you very much for your presentation. 

Mr. BURTON. I want to make sure I am polite with all my colleagues. Mr. Weller, Vice Chairman, do you have a comment you 

would like to make? Mr. Mack, Mr. Delahunt? 

Thank you, Senator. We really appreciate your comments and 

will take them to heart. We will go ahead and have our next panel 

come forward, but before we start with the next panel, I want to 

go ahead and move a bill, have a mark up on a bill that we think 

is very important, very timely. So let me go ahead and do that and 

then we will get started with our panel real quickly here. 

[Recess.] 

Mr. BURTON. Be seated. Over the last several months, the Western Hemisphere Subcommittee has convened hearings on topics 

ranging from democratization, diplomacy, transparency and the 

rule of law, gangs in crime, the rise and influence of China in Latin 

America, and oppression and human rights violations in Cuba. 

From these hearings and this hearing today, we hope to achieve a 

better understanding of the opportunities to strengthen United 

States foreign policy throughout the region. 

Today we are now convening a follow up to our first hearing on 

democracy in Latin America back in March 2005, to take stock of 

the state of democracy and dynamics in some of the hotspots and 

we just talked about one. Your testimony today, gentlemen, will 

help the Subcommittee in making an assessment of United States 

policies to advance and reinforce democratic reforms and institutional capacity within Latin America and Central America and potential threats to stability. Over the last 10 months, Members of 

this Subcommittee have closely monitored the developments in Bolivia, Ecuador, Venezuela, and Nicaragua and other countries 

which are witnessing transitions marred by violence, erosion of 

freedom and extra constitutional mechanisms for succession. 

Our friends in Latin America face problems ranging from high 

unemployment, high crime, narcotics trafficking and related violence and other social problems that threaten stability. Reducing 

these problems while at the same time boosting economic output 

and attracting new trade and investment is essential to creating 

conditions that foster stable development of democratic institutions 

and societies. In some Andean countries, political institutions are 

extremely fragile. Right now we see real problems. The courts are 

in shambles, there is a lack of political leadership. No contract’s 

sanctity, and my colleague has been working on that. No enforcement, no legal certainty and no predictability. These conditions 

allow for the erosion of political freedoms and further weakening 

of democratic institutions. Conducting democratic elections in this 

environment is fraught with difficulty. 

President Chavez of Venezuela, although democratically elected, 

is seemingly and deliberately moving away from the democratic 

principles he once claimed to espouse. Colombia continues to be 

threatened by drug trafficking organizations and by guerilla 

groups. Argentina, Bolivia and Ecuador have had turbulent, extraconstitutional successions of their presidency since 2000 and Nicaragua is not trailing far behind. 

11

This week, I am introducing this resolution condemning the recent actions of the Nicaraguan Congress or the majority of the Nicaraguan Congress. And 1 week ago, as I said, they stripped three 

cabinet members, including Interior Minister Julio Vega and Agricultural Minister Salvo, of their legal immunity from criminal prosecution due to alleged campaign fund irregularities, dating back to 

2001 and 2002 elections. These latest developments continue to 

demonstrate the deteriorating political landscape in Nicaragua between Bolan ̃ os and his supporters and the opposition PAC members, Mr. Ortega and Mr. Alema ́n. 

Elsewhere in Central America, in El Salvador, Honduras and 

Guatemala, political corruption and a growing outbreak of violent 

crimes especially by gangs have posed serious challenges to these 

young democracies. Drug trafficking, HIV/AIDS, poverty, lawlessness and crime are straining resources in the Caribbean already 

stretched thin by hurricane reconstruction. Security, democratic reform and long term prosperity are becoming elusive goals, yet we 

must continue to look for ways to rally behind and support our 

neighbors in Latin America, to address these challenges of poverty, 

political and economic stability, and to many other ills which 

threaten to undermine the future course of democracy in our hemisphere. 

Some observers say the United States is pushing too hard in 

countries like Venezuela, Haiti, Bolivia and Ecuador. Others who 

have testified before the Subcommittee have argued that it is a 

lack of leadership in Latin America, not United States intervention 

or benign neglect, that is to blame. I believe there is some fine-tuning to be made in our approach and I believe this Administration 

is making progress to better engage in the region’s democratic and 

economic growth. 

Within the last 2 weeks, I met with President Uribe of Colombia, 

President Toledo of Peru, President Chavez of Venezuela, President 

Maduro of Honduras, and President Bolan ̃ os of Nicaragua. Many of 

my colleagues joined in these and other meetings with the heads 

of states, including my colleague from Massachusetts, in Latin 

America who were visiting the United States on the occasion of the 

UN General Assembly. 

From these meetings, I believe we have many common social and 

economic and security interests. And from these meetings, I fully 

appreciate that we must communicate, open a dialogue with all of 

these countries and cooperate more effectively to realize opportunities to mobilize support of Latin American nations to further democracy and economic progress in the region. 

When we return from the recess this coming October, we plan to 

conduct an oversight hearing of United States policy in the Caribbean region and Mr. Meeks has been working on that for some 

time. We also intend to conduct oversight travel to Haiti in advance of critical elections scheduled there. Mr. Meeks, I hope you 

will join us in that endeavor. 

I understand Secretary of State Condoleezza Rice and Deputy 

Assistant Secretary Shapiro visited Haiti yesterday and so I look 

forward to hearing your comments on that. In meeting with numerous heads of state over the last 2 weeks, I received assurances that 

they are all committed, everyone we talked to, to political and ecoVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6601 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
12

nomic stability. There were also warnings about political and ideological opponents to democracy and free markets and we are very 

concerned about that, and on both sides we are working to try to 

figure out a way to make sure that we do not see some deterioration in these democracies. 

At our hearing today, we should remember the troubled past in 

the region and address potential slippage where it is occurring. 

One important track that I advocate in this regard is congressional 

passage of the Andean Free Trade Agreement to boost economic activity and opportunity, fuel exports and foreign investment to help 

alleviate poverty throughout that region. 

I want to thank you both for being with us today and I look forward to your testimony. And I want to thank my good friend, 

Ranking Member Bob Menendez, and his staff for their support in 

preparing for this assessment of the state of democracy. Mr. 

Menendez, if you have a comment, we would be happy. 

Mr. MENENDEZ. Thank you, Mr. Chairman, and thank you for 

your continuing effort in moving in this direction. I hope at some 

point we will go beyond these reviews and move to certain actions 

that could actually enhance democracy in the hemisphere and some 

of the root causes that address it. As we look back over the last 

6 months since our last hearing on democracy, I have in my mind 

two questions. First, has the overall democratic stability improved 

over the last 6 months since we first had this discussion? And second, has U.S. policy improved? 

In response to the first question, I am reminded of the old saying 

that the more things change, the more they stay the same. When 

you look at the hemisphere since last March, our crisis areas remain in crisis, from Haiti to the Andean region. While the details 

have certainly changed, the overall problems have not. Many countries in the region still lack strong political institutions and stable 

political parties. They suffer from weak judiciary systems and the 

negative impact of corruption, poverty and inequality. 

In the Andean region, for example, we find ourselves constantly 

wondering which is the next government that will fall? Since our 

last hearing on this topic, two Presidents were forced to leave; one 

from Bolivia, one from Ecuador. To put things in perspective, we 

must remember that Bolivia has lost two Presidents in the last 2 

years and Ecuador has lost seven Presidents over the last 9 years. 

In Venezuela, President Chavez, who was elected, is not acting 

in ways that I would generally think are democratic. In fact, he is 

in the process of eliminating structural checks and balances on his 

power while trying to suppress the power of the opposition. As we 

have already talked about in Nicaragua, the Legislative Branch is 

trying to usurp the power of the Executive Branch. In Brazil, a 

massive corruption scandal has eroded confidence in the government. In Haiti, a country with virtually no elected leaders, it is dubious whether conditions will allow for truly safe, free and transparent elections to take place as planned. 

Many of us believe that we must address democratic instability 

by attacking the root problems. Unfortunately, strong regional economic growth has not translated into a reduction in poverty and inequality. Last year on average, the region’s economies grew by almost 6 percent. We expect 4 percent growth this year. But the 

13

money from economic growth is not making it into the hands of 

those very individuals in Latin American society who need to be 

lifted. According to a recent report by the Inter-American Dialogue, 

‘‘The gap between rich and poor remains worse here than in any 

other region of the world.’’ Than any other region of the world. Because of that gap, Latin America has to grow twice as fast as Asia 

to achieve similar reductions in poverty. 

So in response to my first question, while some countries have 

strong and vibrant democracies and we celebrate those who do, 

overall, democratic stability in the hemisphere has not improved. 

In fact, in many countries, the democratic crises are worse and we 

still have not addressed the root causes of democratic instability. 

As a result, I see an even greater need to improve U.S. policy on 

democracy. Six months ago, when we started out on this endeavor, 

I laid out a clear vision for what I thought we should do. Looking 

back at those recommendations, I feel positive about some steps we 

have taken but we still have a long way to go. First, we have to 

stop cutting core development funding. I am tired of fighting for a 

spending floor when we should be fighting for a spending ceiling. 

I am glad that a bipartisan group was able to restore core development funding for the region for the Fiscal Year 2006 budget in the 

House Appropriations Bill, but I really cannot believe that we have 

to go through each appropriation year battle again and again. 

I do hope that when we are facing all of the statistical reality before us, that we can begin to build upon what we do in the hemisphere, not fight over simply sustaining what is, in essence, life 

support. And I hope that we can work with the Administration on 

this issue. And even though he is leaving us, I got Secretary 

Noriega to give me some positive statements, but I guess maybe he 

knew he was going when he finally said them to me. And I hope 

I do not have to wait for other people to leave before they give me 

the same positive statements. 

But I want to thank him, belatedly as it was, for saying, you 

know, we have to do more in that regard. And I hope I can get our 

good friend the administrator to help work with us and move in 

that direction as well. 

Secondly, I strongly believe we need to actively re-engage the 

hemisphere by either the appointment of a high profile special 

envoy or the new Assistant Secretary who will be appointed, and 

our new Under Secretary, Karen Hughes. I hope they will take immediate action to renew public diplomacy with our neighbors and 

look at this hemisphere as part of their focus. I know that Karen 

Hughes has talked a lot about the Middle East and that, of course, 

is very important. But we ignore this part of the world, our front 

yard, our closest neighbors, our physical closest contact, at our own 

peril. 

Thirdly, at our last democracy hearing, I stated that we have to 

give the Inter-American Democratic Charter some teeth to deal 

with democratic crisis. And from what I can see, we have not 

achieved that goal. I hope the new OAS Secretary-General will engage Members of Congress as we work with other countries on this 

issue. 

Fourth, let me emphasize what I said 6 months ago, that we 

must enhance the role of the National Endowment for Democracy 

14

and its core Institutes in the Americas, so that new funding is fairly distributed among the regions around the world and not exclusively focused on the Middle East. 

And finally, 6 months ago I called for us to pass the Social Investment and Economic Development Fund. We have. It was an 

important first step and I want to thank the Chairman and my colleagues in a bipartisan way for their support. I hope we can work 

with the leadership of the Full Committee to move in this direction. 

Getting it through the Subcommittee is certainly an achievement, 

but ultimately getting it through the Full Committee after years of 

this advocacy is something I hope we can give our collective effort. 

In closing, let me say that I think we can do much more to stabilize democracy in the hemisphere. I believe we have a window of 

opportunity to actually take advantage of this. The OAS has a new 

Secretary-General who can take the lead on the Democratic Charter. The United States will have a new Assistant Secretary who 

can start by listening and working with our neighbors, and we are 

about to hold the next Summit of the Americas with a focus on 

fighting poverty and improving democratic governance. The confluence of all of that gives us a very unique opportunity to move 

in a much better direction. 

Let us be sure that we take advantage of this window of opportunity so that 6 months from now, at next year’s hearing on democracy, we will not once again have to rail against cuts to core development accounts, we will not once again have to hear that the U.S. 

failed to engage with our neighbors, we will not once again have 

to lament the weakness of the Democratic Charter, we will not 

once again have to list numerous elected leaders attempting to 

eliminate democratic structures in their own interests, and we will 

not once again have to read the list of names of democraticallyelected leaders who have been removed from office. By next year 

I hope we can throw away the cliche that says the more things 

change, the more they stay the same. Thank you, Mr. Chairman. 

Mr. BURTON. Thank you. I would just like to say to my colleagues 

and to the panel, we have another event in this room at 5 p.m. and 

the room has to be cleared by security, because we have the Secretary of Defense coming in to give a top secret briefing. So with 

that, I would just tell my colleagues, be as brief as you can. I know 

it is difficult. Mr. Mack? 

Mr. MACK. Thank you, Mr. Chairman. I want to thank you for 

holding this meeting today and I also want to thank our guests for 

being here. And I would also like to take this opportunity to thank 

the other Members of the Committee because we do not always 

agree on a lot of these issues, but this is why we have the hearings 

and we talk about the ideas. And I appreciate the passion and commitment that all of us have on this Committee for trying to find 

solutions for very difficult problems. 

Twenty years ago, President Ronald Reagan and the United 

States and, I might add, you, Mr. Chairman, were very active in 

encouraging the adoption of democracy and free markets as political and economic models to promote freedom, security and prosperity throughout Latin America. These ideas helped to feed the insurgents and the submissive Communist influence advanced by the 

former Soviet Union and Cuba. However, in the decades that have 

15

passed, the United States has witnessed a growing storm that is 

brewing in Latin America. Freedom is slipping away as anti-American leftist leaders continue to amass power and erode democratic 

institutions. Several nations and millions of people in Latin America are vulnerable to this alarming loss of freedom, including Venezuela, Bolivia, Ecuador and Nicaragua. In each of these countries, 

the rule of law is giving way as the freedoms of many are systematically challenged and eliminated by the few. 

There is perhaps no greater example of this than in Venezuela, 

where President Hugo Chavez continues to snuff out dissent and 

rattle his saber while lining his pockets from the proceeds of higher 

oil prices. Chavez has openly called for his countrymen to join his 

march toward socialism and he continues to forge an alliance with 

Castro, and his growing ties with Iran and China should give us 

all great pause and concern. Chavez, together with the likes of Castro and Nicaragua’s Ortega, is spewing a populous, leftist and 

strongly anti-American brand of politics that is spreading throughout the region. 

On that note, I would like to take a moment to thank my colleagues for their unanimous support of my amendment to the Formulations Authorizations Act, which would initiate broadcasts to 

Venezuela, to counter Chavez. Hugo Chavez knows that if he controls the media in Venezuela and in Latin America, then he dictates what is broadcast and written. We must not let this antiAmerican, anti-freedom sentiment win the day. We cannot turn our 

backs on those in Latin America, and Mr. Chairman, I appreciate 

you holding this meeting and I look forward to hearing from our 

distinguished panel today and what we may do to be able to move 

Venezuela back toward the ideals of democracy and freedom. 

Thank you. 

Mr. BURTON. Thank you, Mr. Mack. Mr. Delahunt? Well, I was 

going to go by who got here first—no, who was the oldest, I am 

sorry. 

Mr. DELAHUNT. That would be Mr. Meeks. 

Mr. BURTON. Okay, Mr. Meeks, we will let you go next. 

[Laughter.] 

Mr. DELAHUNT. You know, we are here talking about democracy 

hotspots. I think it was Mr. Menendez that provoked my thinking 

when he used the phrase ‘‘beacon of hope,’’ meaning America. And 

he went on to discuss the role of Secretary Hughes. I, for one, 

genuinely welcome Secretary Hughes. Clearly she has the ear of 

the President. I think that her learning curve will be short, and I 

think she will bring considerable skills to this. 

She has a tough job ahead of her. There was a report in the 

Washington Post this past Saturday where excerpts taken from an 

advisory panel to the Department of State was quoted. I am sure 

both you, Adolfo, and Ambassador Shapiro are familiar with that, 

regarding cultural and public diplomacy. Their conclusions and, by 

the way, this was an advisory panel that was comprised mostly of 

Republicans, professionals, so I dare say it would have some validity to the Members of this Committee. One excerpt was the U.S. 

is viewed as less a ‘‘beacon of hope’’ than a ‘‘dangerous force to be 

countered.’’

16

Another quote: ‘‘America’s image and reputation abroad could 

hardly be worse.’’ And that considerable majorities in Egypt, Morocco and Saudi Arabia view President Bush as a greater threat to 

world order than Osama bin Laden. Some say that the Administration’s promotion of democracy, while simultaneously supporting 

autocratic governments and I can think of a few, I will not enumerate them, but let us throw one out, Uzbekistan is seen as hypocritical in the world. 

The problem, I would suggest, is that this is not just limited to 

the Middle East. It impacts Latin America, because this week, a 

piece by Andres Oppenheimer in the Miami Herald was entitled 

‘‘Latin American Elite is No Big Friend to the U.S.’’ Now, this is 

not about Fidel Castro and Hugo Chavez and all those leftists out 

there and populists, too, I guess, because that seems to be the new 

term, populists. I would like one of you explain to me what that 

term means. But these are the economic elites in Latin America. 

Presumably, they would be supportive of the United States. They 

would be clearly supportive of free enterprise, free trade and other 

priorities of this Administration. Yet, this poll that was done by a 

polling service and was commissioned by the Miami Herald and 

the School of Business at the University of Miami, revealed that 

when posed the question as to whether Washington managed world 

conflicts well, including the Bush Administration handling of Iraq, 

the Middle East, and the war on terrorism, 86 percent of the Latin 

American elites said they disagree. 

I guess there has not been much of a change because a similar 

poll was commissioned back in the year 2003 where 87 percent of 

the Latin American elites—and let us remember now, this is not 

the Chavistas or the leftists or the populists, this is the Latin 

American elites—rated that 87 percent viewed the Bush Administration negatively. 

Mr. BURTON. Mr. Delahunt? 

Mr. DELAHUNT. Can I have an additional minute? 

Mr. BURTON. I will give you an additional minute. 

Mr. DELAHUNT. Thank you. The head of the polling firm concluded that the disdain of the elites was because many United 

States-initiated economic policies in Latin America have not 

worked and because the declassification of documents about the 

United States involvement with Latin American dictatorships in 

the 1970s impacted their viewpoint. I do not know whether that is 

true or not. That is their particular view. 

But if we are sincere and genuine about promoting democracy, 

and I think that everybody on this panel and everybody in this 

room shares that view, but we have to recognize that something is 

not working. It is an ugly truth. There is anti-American sentiment 

that is out there in Latin America and all over the world. You have 

seen other polls and that is a concern that has to be addressed. We 

have to start here and be introspective. And with that, Mr. Chairman, I yield back. 

Mr. BURTON. Thank you, Mr. Delahunt. Mr. Meeks? 

Mr. MEEKS. Thank you, Mr. Chairman. You know, when I first 

came to Congress, one of the desires that I had was to get on the 

International Relations Committee. And I had some thoughts and 

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sphere. And the hearings that we have been conducting and traveling with you, Mr. Chairman, and other Members of this Committee, has really been enlightening. 

I have heard Ranking Member Menendez say for years since I 

have been here that we do not pay enough attention to Central and 

South America. He says that it has been one of the things that he 

stands on a bannister, yelling and screaming, We do not do enough. 

And if we do not, we are going to be sorry one day because democracies will not thrive in those countries. 

As I am moving around I see that the question is we must engage and we must preserve democracies in Central and South 

America. The question is, how do we engage? I think Mr. Delahunt 

is right in that the world is looking at us to see what we are doing 

and whether or not we are doing it fairly and equitably. Or are we 

picking favorites? We like this leader, but we do not like that leader, so we will do our policies, we will favor this place, but not that 

one. 

The issue that I think we talked about, especially talking about 

it earlier with Nicaragua, is poverty. For many of those individuals 

who are impoverished, for the poor, democracy is just theory. In 

fact, for many of them, when you are trying to feed your family and 

trying to stay healthy, as indicated, they do not care whether it is 

a democracy or a dictatorship, if it is going to make their everyday 

reality a better reality. 

Now surely on my side of the aisle, I recently kind of put my 

neck in a noose because I am thinking and hoping that the Administration’s move toward trade with Central America, I voted for 

CAFTA, because I am hoping that it will begin to help the poor and 

create opportunities for some. But how we implement it and how 

we continue to go about it is really going to make, as far as I am 

concerned, is going to determine whether or not democracy thrives 

or not. 

I have concerns. I mean, I am with the bill that we marked up 

earlier today on Nicaragua, because I do not believe that a democratically-elected President should be removed. But yet I still 

scratched my head on the other side, because when there was a 

coup of a democratically-elected President in Venezuela, we were 

silent. Now there has been a lot of time that has come and gone 

by, but we were silent. We did not say anything about democracy 

at that particular time. When there was a question with reference 

to Haiti, another democratically-elected President, we said, let us 

remove him, unlike what we are doing in this case with Nicaragua, 

where we are saying we have to keep a democratically-elected 

President. 

So the world is watching us, see, are we really meaning what we 

say? Or are we picking and choosing leaders that we like and that 

makes it easier for us to then even support autocratic governments 

as Mr. Delahunt has talked about, because it happens to be somebody we like? We have got to make sure we engage fairly and equitably, that we are talking about promoting democracy and that democracy stands and that we help the poor. Because in doing that 

and only in doing that will we be able to have the moral ground 

to go other places to help. Other than that, we lose the moral 

ground and once we lose the moral ground, we have lost the fight, 

18

we have lost the war of promoting democracy. I yield back because 

I heard you clicking there. 

Mr. BURTON. Thank you, Mr. Meeks. Very interesting statement. 

Would my other colleague, Don, would you like to make a statement? 

Mr. PAYNE. I will just be brief. I like the mix of representatives 

from the State Department, but also we certainly have a very outstanding group of Ph.D.’s on panel three. Hopefully some of us will 

still be here when that comes, because I am sure you have a great 

deal to say. 

Let me just kind of amplify one or two points that I think Mr. 

Meeks made. We have a problem of poverty. As long as abject poverty is still with us, we are going to have continued problems. I 

have heard Mr. Menendez talk repeatedly over the last decade 

about the lack of a real comprehensive plan for Latin America, 

Central and South America, and the Caribbean. It still continues. 

Hopefully the new Assistant Secretary for Western Hemisphere 

will come up with a bold plan where we are really looking for that. 

I would certainly like to say that I was disappointed at the UN, 

when we talk about poverty that 5 years ago, the UN approved the 

millennium goals that said by 2015 we will try to cut abject poverty 

in half. Of course, our new Ambassador to the UN, when he went 

there, there was a denial that we should be involved in that goal 

and many of the other goals, 715 amendments were changed by 

Mr. Bolton, on something that had been worked on for the last 6 

months. It was very disheartening. The President did mention the 

goals, though, in his speech, so perhaps we are back on board. But 

a number of issues bother us. We saw us move away from the right 

to protect those who are being confronted with genocide and crimes 

against humanity. Finally, we did squeeze them back in and so I 

would just hope that we can look at abject poverty as a cause for 

disrest. 

If we could look at some of the problems that are underlying, I 

kind of agree with the other speakers in regard to Mr. Chavez. He 

was duly elected twice. He had brought in thousands of doctors to 

deal with poor health. He has opened up literacy centers, but we 

still say he is a bad guy because he talks to Fidel Castro. If we 

weigh on what is happening with his people, people who have 

never had the opportunity to have any kind of education, that literacy centers are being held. People who lived in the barrios who 

have never had any healthcare now have some opportunity to see 

a position. So, you know, I think we need to look at how people 

govern their people rather than maybe what kind of idealogy they 

talk about. I think people are usually last and hopefully we can 

hear some positive plans from the honorable panels that you have. 

Thank you again, Mr. Chairman, for calling this important hearing. 

Mr. BURTON. Thank you, Mr. Payne. In July 2005, Charles Shapiro assumed responsibilities as Principal Deputy Assistant Secretary of the Department of State’s Bureau of Western Hemisphere 

Affairs. He was formerly the U.S. Ambassador to Venezuela and 

Deputy Assistant Secretary for Andean and Caribbean Affairs earlier. He joined the Department of State in 1977. 

19

Adolfo Franco has served as Assistant Administrator for Latin 

America and the Caribbean of the U.S. Agency for International 

Development (USAID) since January 31, 2002. He has testified on 

numerous occasions before our Subcommittee and we are glad to 

have you both back. Let me just say before I yield to you for your 

statements, we really have to be out of here by a quarter to four, 

otherwise we are going to have the Defense Department moving us 

out. I am teasing, of course, but we want to make sure we get out 

of here so the people can sweep the room for intelligence purposes. 

So with that, I would like for you to make your statements as 

brief as possible and then we will get to questions. Ambassador 

Shapiro? 

TESTIMONY OF THE HONORABLE CHARLES A. SHAPIRO, PRINCIPAL DEPUTY ASSISTANT SECRETARY, BUREAU OF WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF STATE 

Mr. SHAPIRO. Thank you very much, Mr. Chairman, Members of 

the Committee. It has been fashionable of late to cite polls that 

suggest the people of the Western Hemisphere have lost faith in 

democracy as an ideal. I believe that while such concerns are real, 

they need to be tempered by historical context. The struggle for democracy in Latin America and the Caribbean that characterized 

the 1980s is thankfully now a mutual effort to deliver the benefits 

of freedom to every individual in every country. The vast majority 

of Latin Americans and their Caribbean neighbors live under leaders of their own choosing. Free elections and peaceful transfers of 

power are the norm. Former adversaries compete not on the battlefield, but in the democratic arena of electoral politics. 

There will be 10 Presidential and 15 legislative elections in this 

hemisphere during the next 12 months. Political progress has gone 

hand in hand with economic reform. Many of the old demons are 

gone. Inflation is largely tamed. Countries are increasingly open to 

foreign trade and investment. While economic setbacks still occur, 

no longer do they lead inevitably to crises affecting the entire hemisphere. 

Most of the region’s leaders recognize that democracy and the 

free market must be part of any sustainable plan for development. 

The paradigm that has been so successful in guiding the expansion 

of the hemisphere and economic growth to Latin America over the 

past 20 years remains firmly in place. Indeed, most recently elected 

leaders, whether they are from the right or the left, are, in fact, 

governing their nations responsibly within that framework. 

Underscoring this transformation last June was the OAS General Assembly in Fort Lauderdale. That gathering advanced our 

agenda of delivering the benefits of democracy to ordinary citizens, 

urging governments to be more effective, transparent and accountable. The ‘‘Declaration of Florida’’ strengthens the Secretary-General’s ability to raise with the OAS Permanent Council situations 

that might lead to action under the provisions of the Inter-American Democratic Charter. It also provides the Secretary-General 

with a mandate to develop timely and effective proposals for promoting and defending democracy. The declaration also affirms that 

adherence to the Democratic Charter is the standard for member 

states’ full participation in the Inter-American process. 

20

There is little doubt, however, that many individuals in this 

hemisphere are frustrated by the perceived inability of democracy 

to deliver benefits to all of its citizens in equal measure. Some are 

turning in increasing numbers to politicians who promise populist 

solutions to the region’s persistent problems or else entertain 

thoughts of a return to authoritarianism. That is to say, we continue to confront challenges in the workings of democracy in this 

region. 

What the polls show is that Latin Americans by and large do not 

trust their governments or their institutions. The survey numbers 

suggest that overwhelming majorities in virtually all countries 

have ‘‘little’’ or ‘‘no’’ confidence in their executive, judiciary, legislature, political parties, armed forces or police. This can be attributed 

to the fact that, in many cases, political elites in the region are perceived to exhibit an aloofness from the people they are supposed to 

represent and serve. That gulf is often reinforced by legal immunity granted legislators and the de facto impunity afforded many 

other governmental and political actors. 

The mistrust between voters and government encourages corruption, as citizens resort to one of the few ways to persuade government officials to actually work on their behalf, by paying them directly. 

Many formal democratic institutions in Latin America are weak 

and overly politicized. In some countries there is not a single body, 

not a Supreme Court, not an electoral commission, not a regulatory 

board, that can be relied upon to routinely make impartial, apolitical decisions in accordance with the law. 

Many political parties in the region are not doing their job well. 

They are often bereft of new ideas, too focused on patronage and 

too dependent on the skills of one charismatic leader. This spoiled 

mentality is too often reinforced by electoral systems which favor 

legislative candidacy via party slate and which over-represent rural 

areas. Politicians therefore owe too much allegiance to the party 

and too little allegiance to their constituents. Entrenched anti-reform opponents are granted too large a voice in policymaking. 

Poverty and the inequality of income and wealth which characterize much of the region make it difficult for democracy to thrive. 

Underfunded states lack the resources to apply the rules of the 

game fairly, even if leaders have the political will to do so. That 

unfairness is sharpened by some governments’ tendency to overlook 

minority rights, the rights of indigenous peoples, ethnic minorities, 

women, children and the disabled. High crime levels, present in 

many nations of the hemisphere, dampen voters’ enthusiasm for 

democratic rule. These challenges to democracy are daunting. I am 

convinced they can be overcome by strong leadership, a willingness 

to make tough decisions, the forging of national consensus and the 

active implementation of a reform agenda. 

The hemisphere’s democratic agenda must be advanced by the 

daily toil of governments. It is hard work, as you know. Sustainable economic growth and political stability are only possible if governments consciously extend political power and economic opportunity to all of their citizens, especially the poor. Democracy and 

free enterprise economics are about inclusion, not exclusion. It is 

only through the inclusion of all sectors in both political and ecoVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6601 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
21

nomic decision-making that the countries of the region will make 

permanent the gains of the past decade. Trust, transparency, effectiveness, inclusiveness, public safety, political consensus on the 

need to have decision-making framed by national welfare and cooperative civil military relations are what enable vibrant democracies 

to withstand political and economic shocks to this system. They are 

the cornerstones of viable states. 

The hemisphere’s most successful democratic leaders understand 

what is needed to make democracy work. They reach out to the opposition, to civil society and to minority groups. Dialogue builds 

trust. Trust is the key element in encouraging real political participation and keeping the political pot from boiling over. 

Good leaders recognize the importance of working with and cultivating responsible media. Good governments are vigorously prosecuting corruption cases and institutionalizing procedures that promote transparency. 

Mr. BURTON. Ambassador Shapiro, if I might interrupt, we want 

to make sure we get to questions, so if you could sum up, we would 

really appreciate it. I am sorry that we did not know about this 

other hearing that is coming up, so I apologize. 

Mr. SHAPIRO. I will cut it short. I will skip a lot of this and get 

right to the end. 

Mr. BURTON. Thank you, sir. 

Mr. SHAPIRO. What people have to understand is that the world 

has changed dramatically in the past two decades. U.S. policy has 

changed dramatically with it. History has proven to be a most reliable guide as to how nations can best expand prosperity and better 

the lives of their citizens. Open economies and political systems, 

outward-looking trade regimes and respect for human rights are 

the indisputable requirements for a 21st century nation state. We 

do not want to impose this model on anyone. We are committed to 

helping out, but for those countries that will not open their economies and political systems, there is little we can do to help. No 

amount of assistance or moral support can keep them from failing. 

We have the Millennium Challenge Account and it is important 

and we are working hard on it. And let me conclude quickly by saying this Administration believes strongly that hemispheric progress 

requires continued U.S. engagement. In trade, in security and support for democracy and across the board, we are deeply involved in 

expanding peace, prosperity and freedom in this hemisphere. Democracy is, indeed, an essential element of our foreign policy. 

Thank you very much, Mr. Chairman. 

[The prepared statement of Mr. Shapiro follows:]

PREPARED STATEMENT OF THE HONORABLE CHARLES A. SHAPIRO, PRINCIPAL DEPUTY

ASSISTANT SECRETARY, BUREAU OF WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF STATE

Mr. Chairman and Members of the Committee: 

It has been fashionable of late to cite recent polls that suggest that the people 

of the Western Hemisphere have lost faith in democracy as an ideal. I believe that 

while such concerns are real, they need to be tempered by historical context. 

The struggle for democracy in Latin America and the Caribbean that characterized the 1980s is thankfully now a mutual effort to deliver the benefits of freedom 

to every individual in every country. The vast majority of Latin Americans and their 

Caribbean neighbors live under leaders of their own choosing. Today, free elections 

22

and peaceful transfers of power are the norm and former adversaries compete not 

on the battlefield, but in the democratic arena of electoral politics. 

Political progress in the region has gone hand in hand with economic reform. 

Many of the old demons are gone: inflation is largely tamed; countries are increasingly open to foreign trade and investment; economic setbacks still occur, but no 

longer do they lead inevitably to crises affecting the entire Hemisphere. 

Most of the region’s leaders recognize that democracy and the free market must 

be part of any sustainable plan for development. The paradigm that has been so 

successful in guiding the expansion of freedom and economic growth in Latin America over the past twenty years remains firmly in place. Indeed, most recently elected 

leaders, even those characterized by some as ‘‘populist,’’ are in fact governing their 

nations responsibly within that framework. 

Underscoring this transformation, last June a key multilateral event took place 

in Fort Lauderdale, Florida, when the United States hosted the OAS General Assembly. That gathering advanced our agenda of delivering the benefits of democracy 

to ordinary citizens, urging governments to be more effective, transparent, and accountable. The ‘‘Declaration of Florida,’’ approved at the General Assembly, 

strengthens the Secretary General’s ability to raise with the OAS Permanent Council situations that might lead to action under the provisions of the Inter-American 

Democratic Charter. It also provides him with a mandate to develop timely and effective proposals for promoting and defending democracy. The Declaration also affirms that adherence to the Democratic Charter is the standard for member states’ 

full participation in the Inter-American process. 

There is little doubt, however, that many individuals in the hemisphere are frustrated by the perceived inability of democracies to deliver benefits to all citizens in 

equal measure. Some, in their frustration, are turning in increasing numbers to 

politicians who promise populist solutions to the region’s persistent problems or else 

entertain thoughts of a return to authoritarianism. 

That is to say, we continue to confront challenges in the workings of democracy 

in the region. 

What the polls show is that Latin Americans by and large don’t trust their governments and their institutions. The survey numbers suggest that overwhelming 

majorities in virtually all countries of the region have ‘‘little’’ or ‘‘no’’ confidence in 

their executive, judiciary, legislature, political parties, armed forces or police. 

I believe this can be attributed to the fact that, in many cases, political elites in 

the region often are perceived to exhibit an aloofness from the people they are supposed to represent and serve. That gulf is often reinforced by legal immunity granted legislators and the de facto impunity afforded many other governmental and political actors. 

The resultant mutual mistrust between voters and the government encourages 

corruption, as citizens resort to one of the few ways available to persuade government officials to actually work on their behalf—pay them directly. 

Many formal democratic institutions in Latin America are weak and overly politicized. In some countries there is not one single body—not a Supreme Court, not an 

Electoral Commission, not a Regulatory Board—that can be relied upon routinely 

to make impartial, apolitical decisions in accordance with the law. 

Many political parties in the region are not doing their job well—they are often 

bereft of new ideas, too focused on patronage, and too dependent on the skills of 

one charismatic leader. 

This spoils mentality is too often reinforced by electoral systems that favor legislative candidacy via party slate and over-represent rural areas—politicians owe too 

much allegiance to the party structure and not enough to constituents; entrenched 

anti-reform opponents are granted too large a voice in policymaking. 

Poverty and the inequality of income and wealth which characterize much of the 

region make it difficult for democracy to thrive. Under-funded states lack the resources to apply the rules of the game fairly—even if leaders have the political will 

to try. 

That unfairness is sharpened by some governments’ tendency to overlook minority 

rights—the rights of indigenous peoples, ethnic minorities, women, children, and the 

disabled. 

High crime levels, present in many nations of the hemisphere, dampen voters’ enthusiasm for democratic rule. 

These challenges to democracy are daunting—but I am convinced they can be 

overcome by strong leadership, a willingness to make tough decisions, the forging 

of a national consensus, and the active implementation of a reform agenda. 

The Hemisphere’s democratic agenda cannot be advanced solely by the poetry of 

verbal commitment to its principles, it must be advanced by the daily toil of governments. 

23

Sustainable economic growth and political stability are only possible if governments consciously extend political power and economic opportunity to everyone, especially the poor. 

Taken together—trust, transparency, effectiveness, inclusiveness, public safety, 

political consensus on the need to have decision-making framed by the national welfare, and cooperative civil-military relations—are what enable vibrant democracies 

to withstand political and economic shocks to the system. 

They are the cornerstones of viable states. 

The Hemisphere’s most successful democratic leaders understand what is needed 

to make democracy work. 

They reach out to the opposition, civil society, and minority groups. Dialogue 

builds trust, and trust is the key element in encouraging real political participation 

and keeping the political pot from boiling over. 

They understand that public relations matter. Citizens need to know when their 

government is effective—when new schools are inaugurated or inoculation programs 

are undertaken. 

Good leaders recognize the importance of working with and cultivating responsible 

media. 

Good governments in the region are vigorously prosecuting corruption cases and 

institutionalizing procedures that promote public transparency—including electronic 

procurement, freedom of information legislation, and the establishment of ombudsman offices to monitor allegations of corruption. 

Successful leaders are promoting legal or constitutional reforms that link elected 

officials to their constituents better. Politicians will never behave if they cannot be 

held accountable easily by the voters from a defined district or are officially shielded 

from prosecution. 

Successful democracies are closing the gap between politicians and voters by decentralizing political power and revenue collection—granting municipal governments 

both real responsibility and revenue can tamp down corruption and give people a 

greater sense of direct participation in the political system. 

Responsible leaders are spearheading legal or constitutional reforms that foster 

impartial, professional, and apolitical judiciaries. Some countries in the region have 

enjoyed great success in judicial reform by streamlining civil code procedures; introducing computerized case tracking systems; staggering the appointment of Supreme 

Court justices; and naming judicial councils that oversee hiring, firing, and disciplining judicial employees. 

Successful leaders understand the link between democracy and individual economic opportunity. The path to prosperity is built upon affording individuals the 

chance to pull their own weight and create personal wealth—by reducing the red 

tape of business registration, encouraging the broader provision of bank credit, harnessing remittances for productive purposes, providing wider access to education, 

and accelerating property titling. 

Good governments must have good police forces. Not only is public safety a crucial 

function of government, but police officers are often the most visible personification 

for most citizens of the power of any administration—so they must act with efficiency and respect. 

Successful leaders in the region also value multilateral engagement as a tool to 

shore up the Hemisphere’s democratic institutions. The work of the Bolivia Donor 

Support Group, OAS election observation in Venezuela, and regional contributions 

to MINUSTAH in Haiti are but three recent examples of how multilateral engagement can help speed the progress of democracy. 

Our assistance programs are also lending a hand. We are providing democracy 

building support in the Hemisphere ranging from legal code reform and judicial 

training, to anti-corruption projects and conflict resolution. 

But our assistance, in and of itself, cannot guarantee the deepening of the Hemisphere’s democratic roots. 

There is simply no substitute for strong local leadership willing to make tough 

decisions and embrace civil society as a key contributor to policy debates. 

We support the Rodriguez administration in Bolivia and its efforts to advance 

that nation’s interests at the same time that it prepares for presidential and legislative elections later this year, and a constituent assembly election for constitutional 

reform scheduled for next year. But on a day-to-day basis it is the Bolivian people 

and Bolivian democratic institutions who must reach a consensus on key domestic 

issues such as how to exploit the country’s vast natural gas resources in a way that 

best supports the common good; on how to include the aspirations of indigenous people within the country’s democratic framework; or on how to address regional calls 

for autonomy. 

24

We support the presidency of Enrique Bolan ̃ os in Nicaragua and are pleased that 

his government has made the effort to combat corruption—to the point that Nicaragua and the Millennium Challenge Corporation concluded a compact on July 14, 

opening the way for that country to receive $175 million in much needed assistance. 

Challenges remain, especially the dramatic politicization of that country’s judiciary 

and the damage done to both the presidency and the National Assembly by the tug 

of war between two political caudillos (strongmen)—one of whom remains enamored 

with the obsolete politics of the 1940s and another with a bankrupt leftist ideology 

from the 1970s. The USG remains committed to strengthening democratic institutions in Nicaragua and to supporting free, fair, transparent and inclusive elections, 

scheduled for November 2006. At the same time, we want to ensure that undemocratic forces do not prevent President Bolan ̃ os from completing his legitimate term. 

The USG has supported OAS efforts to resolve the political crisis. These include resolutions supporting democratic order and sending a special envoy to facilitate a national dialogue to reach agreement among the political parties that will maintain 

the governability of the country. 

In Cuba, the President’s message to democratic reformers facing repression, prison, or exile is clear: ‘‘When you stand for your liberty, we will stand with you.’’ We 

are implementing the recommendations of the President’s Commission for Assistance to a Free Cuba designed to hasten a democratic transition, and the regime is 

being pressured as never before. We will continue to prepare to support a rapid, 

peaceful transition to democracy. And, we will assist Cuba’s democratic opposition 

and civil society as it seeks to organize itself for the coming transition. 

Supporting Haiti’s slow ascent from a decade as a predatory state is an enormous 

challenge, but we are determined to stay the course as long as the Haitians themselves remain engaged in fashioning the truly democratic government they so deserve. 

In Ecuador, we have been vocal in our support for constitutional democracy and 

its institutions. We have good relations with the Palacio administration on issues 

ranging from protecting the environment, to fighting global terror, to making 

progress towards an FTA. But it is the Ecuadorians who must work to strengthen 

and safeguard their fragile democracy against political self-interest that threatens 

to weaken and fracture it and paralyze any attempt at much needed reforms. 

Peru looks ahead to a future that is brighter than it has been in recent memory. 

After the turmoil of the 1980s and 90s, Peru’s market economy reforms have turned 

things around. Under President Toledo’s watch, the country has developed at unprecedented levels, finally beginning to reduce poverty and improve the life of ordinary Peruvians. 

Venezuela, frankly, does not present a promising picture. We have no quarrel 

with the Venezuelan people, but despite the United States’ efforts to establish a normal working relationship with his government, Hugo Chavez continues to define 

himself in opposition to us. 

The United States works with leaders from across the political spectrum in a respectful and mutually beneficial way to strengthen our democratic institutions, 

build stronger economies, and promote more equitable and just societies. Our neighbors know that we are good partners in fighting poverty and defending democracy. 

We do more than respect each others sovereignty: we work together to defend it by 

promoting democratic ideals and by fighting terrorism, drugs and corruption. 

But President Chavez has chosen a different course, and he has a six-year track 

record that tells us a thing or two about him. His efforts to concentrate power at 

home, his suspect relationship with destabilizing forces in the region, and his plans 

for arms purchases are causes of major concern. 

Our policy is very clear: We want to strengthen our ties to the Venezuelan people. 

We will support democratic elements in Venezuela so they can fill the political space 

to which they are entitled. We want to maintain economic relations on a positive 

footing. And we want Venezuela to pull its weight to protect regional security 

against drug and terrorist groups. 

We also want Venezuela’s neighbors and others in the region to understand the 

stakes involved and the implications of President Chavez’s professed desire to 

spread his ‘‘Bolivarian’’ revolution. 

Many of them are fragile states without the oil wealth of Venezuela to paper over 

their problems. They are striving hard to strengthen their democratic institutions 

and promote economic prosperity for all. 

Should the United States and Venezuela’s neighbors ignore President Chavez’s 

questionable affinity for democratic principles we could soon wind up with a poorer, 

less free, and hopeless Venezuela that seeks to export its failed model to other countries in the region. 

25

Mr. Chairman, before concluding, I want to address one other point that has 

somehow become part of the conventional wisdom: that the United States is ‘‘ignoring’’ the Western Hemisphere. 

I think that what people have to understand is that the world has changed dramatically in the past two decades, and U.S. policy has changed with it. 

During the Cold War, strategic considerations dominated our policy and U.S.-Soviet tensions turned the region into a giant chessboard whereby forestalling the 

creep of totalitarianism necessarily trumped all other considerations. That approach 

was not always appreciated. In those days, we were not accused of ignoring the 

hemisphere, but were accused of being too heavy-handed, further enforcing the historic perception of a ‘‘paternalistic’’ United States approach to the region. 

Today, that has changed. 

History has proven to be a most reliable guide as to how nations can best expand 

prosperity and better lives for their citizens. Open economies and political systems, 

outward looking trade regimes, and respect for human rights are the indisputable 

requirements for a 21st century nation-state. 

So those who would inveigh against U.S. ‘‘paternalism’’ in the Western Hemisphere have lost their essential talking point, because we seek to impose this model 

on no one. For those countries seeking to follow the same path, we are committed 

to helping, but for those countries that will not open their economies and political 

systems there is little we can do to help them, and no amount of assistance or moral 

support can stop them from failing. 

This is the basis of President Bush’s Millennium Challenge Account, his historic 

new assistance program that rewards countries making the tough decisions to help 

themselves. 

To be eligible for MCA funds—amounting to $1.5 billion for fiscal year 2005—nations must govern justly, uphold the rule of law, fight corruption, open their markets, remove barriers to entrepreneurship, and invest in their people. 

Three countries from our own hemisphere were among the first 16 to be declared 

eligible for MCA assistance: Bolivia, Honduras, and Nicaragua—and Honduras and 

Nicaragua have already signed compacts with the Millennium Challenge Corporation. Two additional countries were recently selected as ‘‘MCA threshold countries’’ 

for FY05—Guyana and Paraguay. These countries will receive assistance aimed at 

helping them achieve full eligibility. 

By placing a premium on good governance and effective social investment, the 

MCA approach should help countries attract investment, compete for trade opportunities, and maximize the benefits of economic assistance funds. 

But let us recognize, again, that no amount of external aid will substitute for governments making the tough decisions for themselves to open up their economies, to 

make their governments more effective and accountable, to make themselves more 

competitive in a global economy, and to extend the most basic services and opportunities equitably. 

To their immense credit, most of the leaders of this region recognize these obligations and are working hard to fulfill them. And as they do so, they have found in 

the Bush Administration a creative partner, reinforcing the forces of reform. 

The good news is that this Hemisphere has many leaders with ambitious social 

agendas who are adopting sound economic policies and seeking mutually beneficial 

relations with their neighbors, including the United States. There is a solid consensus in favor of representative democracy and respect for human rights in this 

Hemisphere. 

To conclude, this administration believes strongly that hemispheric progress requires continues American engagement in trade, in security, in support for democracy, and across the board we are deeply involved in expanding peace, prosperity, 

and freedom in this hemisphere. Democracy is indeed an essential element of our 

foreign policy agenda. 

Thank you very much and I look forward to answering any questions you may 

have.

Mr. BURTON. Thank you, Mr. Ambassador. I am sorry. We will 

take your entire statement for the record. Thank you, sir. 

Mr. Franco. 

26

THE HONORABLE ADOLFO A. FRANCO, ASSISTANT ADMINISTRATOR, BUREAU FOR LATIN AMERICA AND THE CARIBBEAN, UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT 

Mr. FRANCO. Thank you very much, Mr. Chairman. I will be 

brief, I know your time constraints. I appreciate the opportunity, 

Mr. Chairman and Members of the Committee, to appear again before the Committee on a timely theme of democracy and the 

progress that many leaders in the United States are making to solidify the gains of the last 20 years that have been so eloquently 

expressed by Members of the Committee. I last appeared before the 

Committee in March on the state of democracy in the region. I 

think Ranking Member Menendez is right that it is fair that we 

take stock of where we are and where the challenges remain. So 

I appreciate the opportunity today to talk about a few of the 

hotspots. I do not have time for all of them, but I will try to be 

as responsive as I can to some of the particular issues and the particular countries that Members of the Committee have expressed 

concern about. 

Beforehand, I must agree very much with what Ambassador Shapiro has said, that we have made real progress in many of the 

countries of the region in the past 20 years, certainly on the economic front, inflation, and on many other things. As Ranking Member Menendez mentioned, the more things change, the more they 

look the same. Some things have changed dramatically. 

Prior to 25 years ago, we had almost daily governments in Bolivia, as you might remember, Mr. Menendez. And we had 5,000 

percent inflation and runaway inflation in Argentina. So I think it 

is important to take stock. I am not trying to score points, but 

many of the good policies that enlightened leadership of the region 

has been taken to heart and implemented. 

I certainly agree with my good friend, Congressman Meeks, who 

I am glad voted for CAFTA based on our discussions about a year 

ago. I hope I had something to do with this. Free trade is not a 

panacea, but it is the engine for economic growth. I think if anything demonstrates the studies that have been quoted over the last 

20 or 30 years, it is that poor countries that had steady growth 

over a sustained period of time in their GDP that have actually 

graduated. We hope to have Latin American countries graduate as 

we had in the case of Chile and Costa Rica and countries in Europe 

and Asia. 

So by creating that environment for investment, by creating the 

environment for the right transparency and policies in budgeting 

and the government’s responsibilities, I think we will see the type 

of private sector and national and international investment in 

these societies that will make it possible to solidify and help democracy. 

Now we have done the same polls, and we have looked at the 

same polls. We have commissioned them, actually, at USAID on 

where we are in this progress on democracy on the economic front. 

I have to agree with Members of the Committee that they are disturbing. Only 43 percent of Latin Americans are fully supportive 

of democracy, while well over a half would trade it in for an improvement in their pocketbooks. That is why I prefaced my reVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6601 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
27

marks earlier about the need to create those economic opportunities, because they are going to be the underpinnings. I have said 

it before this Committee, people cannot eat democracy. So we need 

to have the right economic and the right, I think, political policies 

in place in the region to solidify the democratic institutions that we 

all want to support. 

Unfortunately in the region, as you all know, you travel extensively, these institutions are weak. Simply 25, 30 years ago, we 

keep saying one country has a non-elected leader today—25 years 

ago, we were talking only one or two had elected leaders. So these 

institutions are fragile, they are young. They need to be developed. 

Resources and training need to be provided by the countries themselves and by external donors. 

I think it is important for the Committee to know what we are 

doing at USAID to support during the coming months, because of 

the difficult situations they confront. One is Bolivia. As you know, 

we have elections in Bolivia in December. It was rightfully noted 

by Mr. Menendez and other Members of the Committee that Bolivia has gone through two Presidents in the last few years, so we 

are working hard to build coalitions, monitor the election process, 

support indigenous education campaigns and facilitate debate 

among political parties, having accessibility as we have in our own 

country, creating that level of confidence within Bolivian society 

that is desperately needed. 

Ecuador, as well, we had a change of government in Ecuador 

that was not constitutionally planned. We have a very similar process ongoing in Ecuador. We have in Ecuador a political vacuum 

with no clear leader for the future, for the next election, so we are 

doing everything possible to reach out to civil society organizations 

and provide everything we can for that election support. 

Just very briefly on the Nicaragua situation, I first of all want 

to commend Chairman Burton and the Committee for the markup 

today, the adoption of House Resolution 252. I think it is extremely 

important. I did speak with Ambassador Stadthagen this morning. 

There are six ministers here today. They arrived here in Washington because of this very serious situation. Not only the National 

Assembly, Mr. Chairman, but the judicial system in Nicaragua is 

being manipulated, which is undermining democracy in that country. So we are very, very concerned about that. 

In response to what Congress has called for, what you have 

called for, Mr. Chairman, USAID is working with non-governmental organizations. I want to dispel any notion here that we are 

supporting any candidate or any particular party. I want to make 

that very clear, Mr. Delahunt. However, we do have an elected government that we do work with in Nicaragua and it is democratically elected. I will be happy to answer questions about that and 

the CSE as well. 

Lastly, on Venezuela, since many Members are very engaged and 

interested in this, we continue to do everything we can with Members of the Committee that are here today to promote dialogue 

within that country, with civil society organizations with both parties, with mayors, everything we can to create a climate to lower 

the tension and address the serious polarization in that country. 

28

The last country I want to mention, Mr. Chairman, is Haiti. The 

Secretary of State was there yesterday with Ambassador Shapiro. 

We are doing everything we can to work with MINUSTAH, the security forces, and the electoral administration there to insure that 

registration is at a proper level. We can discuss it more fully during the questions, but we want a level playing field and we have 

an election that can own up to the expectations of the Haitian people, and that we will be working very diligently in the next 2 or 

3 months to make that election a success. 

And with that, Mr. Chairman, I would be happy to answer any 

questions you or Members of the Committee might have for me. 

[The prepared statement of Mr. Franco follows:]

PREPARED STATEMENT OF THE HONORABLE ADOLFO A. FRANCO, ASSISTANT ADMINISTRATOR, BUREAU FOR LATIN AMERICA AND THE CARIBBEAN, UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

Mr. Chairman, Members of the Subcommittee, I am pleased to have this opportunity to voice USAID’s concerns for Latin America and Caribbean (LAC) democratic progress and draw your attention to the ‘‘hot spots’’ in our region. In March, 

I was able to speak before this very same Subcommittee on the ‘‘State of Democracy 

in the Western Hemisphere,’’ the region’s challenges and the United States Agency 

for International Development’s (USAID) democracy assistance programs. I greatly 

appreciate the opportunity to appear before you again today to update you on these 

critical issues. 

President Bush remarked in November 2004 that ‘‘in this century, countries benefit from healthy, prosperous, confident partners. Weak and troubled nations export 

their ills—problems such as economic instability and crime and terrorism. Healthy 

and prosperous nations export the goods and services that help stabilize regions.’’ 

The strong economic, cultural, and geographic ties between the United States and 

the countries of the Western Hemisphere make their political and economic stability 

of vital interest to the United States and underscore why USAID remains committed to promoting strong and prosperous democracies in Latin America. Democracy serves as the foundation necessary to facilitate hemispheric security, trade, and 

development. 

Over the last two and a half decades, Latin America has made real progress toward democratic consolidation. Twenty-five years ago, only three countries in the region had democratically elected leaders. Today only one country, Cuba, continues 

under a dictatorship. The rest of Latin America has mainstreamed the practices of 

elected civilian governments, peaceful presidential transitions, relatively free and 

independent media, and basic civil liberties. Nevertheless, USAID believes that corruption, weak public institutions, and inequality and poverty undermine this 

progress as demonstrated in public opinion polls that show that citizens in Latin 

America are losing their confidence in the democratic system. 

As a region, LAC is second only to Africa in poverty. LAC countries also have 

some of the highest crime rates in the world. Despite recent prosecutions, corruption 

among political and economic elites, political parties, and public and private sector 

institutions remains a cause for grave concern. These problems, coupled with the 

inability of governments to provide basic services to its people, have led to an erosion in democratic gains and are beginning to foster radical populism. 

This is well documented in the 2004 USAID funded national-level surveys on attitudes toward democracy that show citizens frustration with rising levels of crime, 

corruption, and poor service delivery and a concomitant decline in their support for 

democracy and democratic institutions. Similarly, a 2004 United Nations study of 

the entire LAC region revealed that only 43 percent of Latin Americans are ‘‘fully 

supportive’’ of democracy while frighteningly more than half, 54.7 percent, say they 

would support an authoritarian regime if it could resolve their economic problems. 

Moreover the least trusted democratic institutions in Latin America are also among 

the most important institutions in a democracy—political parties, the justice system, 

legislatures, and the police. 

This challenge to democracy comes as no surprise given the vast levels of inequality and poverty in Latin America. Unfortunately, the region’s classification of mostly 

middle income status disguises the harsh realities of its economic disparity. According to the United Nations, 43 percent of the population or about 222 million people 

in Latin America are poor, and 96 million, 18.6 percent, live in extreme poverty. 

29

Furthermore, inequality in Latin American is higher than any other region of the 

world, despite increases in per capita income over the last decade. 

Many LAC countries are held back by the powerful elite, weak government institutions, and self-protecting political parties wielding unchecked authority fortified 

through amended constitutions, legal immunity, porous regulations, and corruption. 

This contributes to the inability of Latin American countries to create opportunities 

for its citizenry and to provide the services needed to enable them to take advantage 

of these opportunities, and it makes the rhetoric of undemocratic, populist campaigns very enticing. 

I believe that USAID’s work is critical to meeting the challenges ahead and consolidating democratic gains in the hemisphere. Some of the complex challenges 

ahead will surface in the upcoming elections of Bolivia, Ecuador, Nicaragua, Haiti, 

and Venezuela. 

Bolivia 

In Bolivia the registration of candidates for the December 2005 general elections 

closed on September 5. Eight parties confirmed their participation in the presidential elections with three candidates serving as early frontrunners, including a 

candidate from the Movement to Socialism party who has a six percentage point 

lead according to a Latin American polling agency. The race remains close, and national divisions into east-west camps suggests little likelihood of a united Bolivian 

electorate. Constitutional challenges to the electoral process could postpone the vote, 

but the President and all leading candidates are pressing to remain on schedule. 

USAID will support the December Presidential and Congressional elections and 

the July 2006 Constituent Assembly elections (to chose representatives that will rewrite the Bolivian constitution), and the July 2006 referendum on autonomy. This 

will include providing technical assistance and training to a network of civil society 

organizations in coalition building, monitoring, and voter education campaigns, with 

a focus on indigenous populations. Intensive civic education activities will be supported, including technical assistance to the media to improve professional reporting 

of electoral processes, and national public opinion polls and surveys will be conducted to gauge political perceptions and candidate support. Debates will be facilitated among political parties, citizen groups, and indigenous communities to discuss 

key issues related to electoral processes. Additionally, USAID will assist civil society 

organizations to strengthen their ability to advocate and inform the debate about 

controversial issues related to revisions to the Constitution and regional autonomy. 

Our previous electoral support for the November 2004 municipal elections had a 

highly significant impact. USAID trained over 1,000 future women leaders, contributing to the increase of women municipal candidates from 46 percent in 1999 to 56 

percent in 2004. The political party development activity also made progress in civic 

education, including developing a manual on democratic values for high school students that has been approved by the Ministry of Education for nationwide use. 

About 25 percent of high school social science teachers were trained in the use of 

this manual. USAID also initiated a coordination effort among governmental and 

private institutions that play roles in civic education. 

USAID is also supporting economic growth in Bolivia through programs that aim 

to increase the income of the poor. Economic programs will provide technology services to increase production and marketing of agricultural commodities, increase access to financial services in urban and rural areas, access to technology and market 

services, and micro-irrigation. 

Ecuador 

Elections in Ecuador are not until October 2006, but there is already debate about 

the current electoral environment. Ousted President Lucio Gutierrez is barred from 

returning to the country and current President Alfredo Palacio is not eligible for reelection leaving no clear front-runners. In addition, the Congress is considering 

making drastic legislative changes that could alter the entire political environment 

and process. 

USAID is intensifying efforts to work with civil society to promote democracy, advance political reforms, and provide election support for the 2006 Presidential and 

Congressional elections to ensure vulnerable groups such as youth, women, indigenous and Afro-Ecuadorians can participate fully in the electoral process. The programs with civil society will promote poverty reduction activities for micro and 

small enterprises, support a public consultation in connection with a free trade 

agreement, improve competitiveness, strengthen financial sector services, and improve fiscal and tax management. 

Despite political and economic uncertainties in Ecuador, USAID’s programs have 

been successful to date. USAID support has been key to free and fair elections for 

30

the 2002 National and 2004 sub-national elections. In addition to providing international observation and technical assistance to the Electoral Tribunal, USAID provided assistance to a local nongovernmental organization that served to mobilize 

thousands of young volunteers nationwide to observe the elections, and conduct statistically accurate and independent ‘‘quick counts’’ on election days. USAID also provided assistance to nongovernmental organizations to monitor campaign spending, 

develop civic education campaigns, and demand accountability of elected officials. It 

was the first time in Ecuador’s history that a process of such a grand scale of domestic observations and general democratic accountability had been undertaken. 

Additionally USAID support is having a positive impact on citizen trust in local 

government. Nationwide, citizen confidence in municipal governments increased 

from 46.7 percent to 51.4 percent from 2001 to 2004. In contrast, confidence in central government institutions, over the same period, increased less than 1 percent, 

from 30.5 percent to 31.4 percent. In 15 of the 47 cities where USAID has been 

working with the municipal governments, citizen satisfaction with local government 

exceeded the national average, reaching 53 percent in 2004. The assistance USAID 

has provided to municipalities through its democracy and Northern and Southern 

border programs has been instrumental in strengthening Ecuadorians belief that democracy can indeed deliver concrete benefits. 

Nicaragua 

In Nicaragua, Sandinista Leader and ex-President Daniel Ortega, who retains an 

anti-U.S. worldview and recently made a deal with Venezuela for supplies of oil to 

Sandinista-controlled municipalities at preferential financing rates, has announced 

that he will run for president in November 2006. Considering that Sandinista and 

Liberal parties control the Supreme Electoral Council (CSE), there is a lack of public confidence in the CSE and the fairness of the upcoming presidential elections. 

Moreover, based on a review of previous electoral assistance and international observation missions from the 1990 elections onwards, it is clear that Nicaraguan elections face several recurring problems such as a lack of public confidence in the electoral framework, mistrust in the party primary elections, inaccurate voter registration lists, and weak election monitoring and organizational capacity. Opinion polls 

show a dramatic lack of confidence in the government and public institutions. About 

80% of Nicaraguans said they would prefer to live outside of the country and a high 

percentage also believes the electoral authorities will commit fraud in the coming 

election. 

USAID is working to address these challenges. The Agency is focusing on election 

monitoring as a key function for effectively promoting democratic elections. These 

efforts are designed to reduce the opportunities and incentives for electoral fraud; 

identify and address problems with the electoral process; and legitimize a peaceful 

transfer of power. USAID is working on electoral law reform, voter registration and 

voter list updates, massive civic education campaigns, technical assistance to the 

CSE, and donor coordination. In Nicaragua, the two strongest political parties are 

working together to block the entrance of smaller parties to participate in the 2006 

elections. Some parties may lack the organizational capacity to campaign nationwide, present viable candidates, and recruit and train poll watchers. USAID will 

provide assistance to strengthen the role of underrepresented parties and will support improvements throughout the electoral process. 

USAID also continues to support economic growth to reduce the impacts of poverty and income inequality. Currently USAID is working with the Government of 

Nicaragua and private sector agencies to implement trade-based economic growth 

by reducing structural, policy and regulatory constraints to national competitiveness. In addition, USAID support has provided 116,000 farmers with technical assistance and training aimed at encouraging crop diversification, promoting highervalue crops, and introducing environmentally sustainable farming methods and improved marketing techniques. 

Haiti 

Thanks to an improving security situation, a timetable has been set for elections 

in Haiti with a first round of presidential and legislative elections set for November 

20, local elections scheduled for December 11, and run-off elections planned for January 3. On September 17, the United Nations General Assembly reaffirmed that the 

elections in Haiti are one of the nation’s highest priorities. USAID will play an active role in the process although some USAID personnel are still under evacuation 

status. Next month in Brussels, key donors, including USAID, will meet to discuss 

their concerns in Haiti. It will be critical that the electoral process is transparent, 

free and fair; that the United Nations Stabilization Mission (MINUSTAH) remains 

vigilant and further improves the security situation; that Haiti’s development and 

31

consolidation of the rule of law and reform of the Haitian National Police continues; 

and that post-election, long-term commitment to Haiti’s political and economic development remains. 

USAID is implementing over $30 million for electoral administration, registration, 

observation and monitoring, as well as assistance to legitimate political parties and 

civil society organizations in preparation for the elections. Additional details on 

USAID’s work in Haiti will be presented in the October 19 hearing before this committee where we will present an overview of U.S. Policy in the Caribbean. 

Venezuela 

This administration is greatly concerned by the rise of radical populism in South 

America and with President Hugo Chavez’s strident anti-American posture which 

has left Venezuela bitterly divided. His opponents point to his authoritarian tactics 

reflecting Communist Cuba, while this supporters praise his expansion of social programs bolstered by oil revenue surplus. There were enough citizens in opposition to 

petition for a mid-term Presidential referendum in August 2004. However, there 

were not enough votes to remove President Chavez from office and thus he will remain in office until the next Presidential elections in 2006. Meanwhile, the projection of Chavez’s interests and his brand of populism only serve to further undermine 

democracy in the region. 

USAID’s work in Venezuela is handled through our Office of Transition Initiatives. Our objectives are to enhance civil society dialogue; support constitutional 

processes; and strengthen democratic institutions while promoting a constitutional, 

peaceful, and democratic solution to the current political crisis in accordance with 

Organization of American States Permanent Council Resolution 933. USAID’s social 

impact programs reinforce the favorable impression that most Venezuelans have of 

the American people and demonstrate the USG’s solidarity with the global fight 

against poverty. Specifically, these projects support inner-city day-care centers, centers for street children, and cancer hospices for children of low-income families. 

USAID also works to expose Venezuelan human rights organizations and practitioners to successful strategies employed by human rights defenders in other countries, and to increase their institutional capacity though training in Latin American 

countries with a history of strong human rights activism and respected human 

rights organizations. 

USAID’s election-related activities in Venezuela include training candidates, campaign managers, and other political party workers on the mechanics of electoral 

campaigns. Training topics include candidate profiles, message development, getout-the-vote, day-of-the-vote activities, and understanding relevant electoral laws. 

USAID also works to strengthen political parties in message development, citizen 

responsiveness, and outreach. For example, prior to the referendum and local elections of 2004, USAID worked with political parties to train party-affiliated election 

observers from both sides in the rules and regulations associated with electoral 

events. During the elections of 2004, USAID also supported the institutionalization 

of a non-partisan, domestic electoral observation organization. 

Other Hotspots of Interest 

In addition to the aforementioned, other areas of concern in the Hemisphere are 

the follow on to Plan Colombia and gang violence in Central America. 

Colombia 

The elections in Colombia next year may be in the hands of the nine members 

of the Colombian Constitutional Court. The court has been asked to uphold recent 

legislation that would allow a sitting President to run again. President Uribe has 

expressed a desire to run again and has an approval rating near 70%. No matter 

what the outcome is, he continues to work with the United States to address the 

major security and political issues of the country. 

On August 4th, President Uribe of Colombia and President Bush met in Crawford, 

Texas to discuss the future of U.S. support for counterdrug programs in Colombia. 

USAID is already engaged in its fifth and final year of assistance under Plan Colombia and continued USG support will be provided through the annual appropriations process, primarily through the Andean Counterdrug Initiative account. Starting in FY 2006 and over the next several years, USAID will begin implementation 

of its revised country strategy which seeks to achieve increased sustainability of development results by focusing programs in key economic growth corridors of the 

country; emphasizing greater program integration and inclusion of Colombian institutions; and incorporating trade capacity building to support a new free trade agreement under negotiation with the United States. All of these development activities 

are in place with the intent of eliminating the drug trade in the country. 

32

Crime and Gang Violence 

Finally I would also like to note my on-going concern with gangs and crime in 

Latin America, and especially Central America. Polls show that gang violence is one 

of the greatest concerns of citizens in Honduras, Guatemala and El Salvador—countries which now have some of the highest murder rates in the world. It is very clear 

that gang violence poses a direct threat to security, economic growth, and democratic institutions, and it spills across our borders to affect our own communities 

in the United States as well. Gang violence is now a transnational phenomenon and 

most observers believe that contact between gang members in different countries is 

increasing. 

USAID efforts to reduce crime are intricately linked for a need to strengthen and 

reform justice systems. Moreover, USAID has also worked on the preventive side—

collaborating with the Department of Justice (ICITAP) to create a community policing program in some 200 municipalities in El Salvador and implementing an innovative community crime prevention program in Guatemala. 

We are looking to do more—especially in prevention. USAID is now conducting 

a gangs assessment in Central America and Mexico and meeting with key stakeholders here in the United States. This study will inform future USAID programmatic decisions and enhance USG inter-agency collaboration. 

Conclusion 

Despite progress, much remains to be done and USAID will continue to promote 

democratic reforms that reflect the complex realities each country confronts. Given 

the trends and challenges in our Hemisphere, USAID will sharpen its focus to address the rising crime and violence, attack the impunity and immunity of political 

and economic elites, and better address the inequality between people. USAID will 

work to reduce poverty and inequality through the promotion of economic prosperity 

through job creation, employment expansion, and economic growth. Additionally, 

USAID will also strengthen government institutions via decentralization and local 

governance, legislative strengthening, electoral assistance, policy reform, and 

anticorruption programs. And we will work with civil society and improved civic response for better governance, inclusion, transparency, and accountability for all people regardless of status. 

We cannot realistically expect to solve the problems of Latin America’s democracy 

in the short term. In fact, it will require a long-term, sustained, and collaborative 

effort. By working together with host country governments and other U.S. government agencies to implement effective multisectoral measures that reduce corruption, 

strengthen institutions and build local capacity, we can—and will—have an impact. 

Mr. Chairman and Members of the Subcommittee, thank you for the opportunity 

to appear before you today. I welcome any questions that you may have.

Mr. BURTON. Well, thank you, Mr. Franco and Ambassador Shapiro. I do not have any questions. I mean, I do have some questions, but I will submit those to you and you can answer them for 

the record because of the time constraints. I just want to say that 

that polling data that you just cited, that less than half of the people down there support democratic institutions because of their economic plight, that is something that is very disturbing. Because as 

we have all said here, if people cannot put food on the table for 

their kids, they do not care what kind of a government they have. 

Anybody that will promise them anything, they will support. So we 

will just have to work together to make sure that we solve those 

problems. 

As you said, I believe CAFTA was a step in the right direction, 

as will be the Andean Free Trade Agreement. Mr. Menendez? 

Mr. MENENDEZ. Well, thank you, Mr. Chairman. I will try to be 

succinct in the interest of the time, but I do not always have these 

opportunities to have the distinguished Administrator and the Deputy Assistant Secretary, so let me just start off with, you know I 

have personal admiration for you, Mr. Administrator. 

Mr. FRANCO. Thank you, sir. Likewise. 

Mr. MENENDEZ. Having said that, when you make statements 

referencing the last 25 years, when Bolivia was constantly changVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6601 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
33

ing its President, I would point out that the world was much different 25 years ago, not just Bolivia. The United States was different 25 years ago. And certainly the region and the world was 

dramatically different. So when you make statements like that, I 

get disappointed, because our benchmark cannot be 25 years ago. 

I reject, as a Member of this Committee, our benchmark being, you 

know, what was happening a quarter of a century ago as the standard for moving forward for success. So that is a major problem. 

The second thing, I just simply make a request, if someone could 

send me the report that establishes trade as having helped reduce 

income and equality in any Latin American or Central American 

government, as the vehicle by which we have reduced income and 

equality, I would like to see it, because I certainly would want to 

read it. 

And lastly, I guess until I either leave this Body, retire or do 

something else, I am going to continue to pursue this next issue. 

We are all aware, you know, we have had a disagreement on this, 

but because you are so good with the numbers, I decided to bring 

in some firepower and get CRS to look at the numbers, an independent entity. And when I finally went through this step by step 

with CRS as it relates to the impact of United States foreign aid 

to Latin America and our cuts, I came to some very clear understandings. That you know the 12 percent cut to core development 

funding for Latin America is even worse when we look beyond the 

surface and beyond the macro numbers, that those cuts are even 

more severe. 

For example, over the past 2 years, funding has been cut dramatically in every category except economic growth. The Administration cut agriculture and basic education programs by 28 percent, 

environment programs by 20 percent. So the only category that has 

actually grown is economic growth with an increase in trade funding. And this type of under-the-table funding-cutting exists across 

the board. For example, the overall numbers for global health programs in Latin America indicate a 12 percent increase in funding. 

But when we look below the surface to that 12 percent increase, 

we find this is only because of an increase for HIV/AIDS programs, 

which are very commendable and we support. However, you increase HIV/AIDS programs but you do it by cutting the funding for 

other infectious diseases by 30 percent, when most HIV/AIDS patients die of infections from other diseases. So the increase for 

HIV/AIDS also masks a 37 percent cut to funding for vulnerable 

children. In my view, these are the wrong set of priorities. 

So we can take the macro numbers and try to spin them all we 

want, but this is the wrong set of priorities. 

Finally, Senator Coleman, the Chairman and most Members of 

this Committee seem to have the same view on this, even though 

we do not agree on everything, but we agree on a lot. And it always 

seems to be a different view, with all due respect, Mr. Secretary, 

than what we get from the State Department. I listened to Senator 

Coleman’s presentation, I listened to his recommendations. I listened to what Members of this Committee have said, including its 

Chair, and we get a different vision than that which the State Department has. So obviously somewhere here there is a disconnect 

between the Legislative Branch and the Executive Branch about 

34

our vision of what we need to do and what is really happening in 

this hemisphere. And I know none of those are questions, but nonetheless, I just felt compelled to make them as statements for part 

of the record along the way. If you have something to say, I am 

happy to relinquish what is left of my time. 

Mr. FRANCO. May I respond very quickly, Mr. Chairman? 

Mr. BURTON. Sure. 

Mr. FRANCO. While you are still in the House, Senator Menendez, I would request that we have an opportunity to meet to discuss budget allocations. Let me start off with the numbers, if we 

can, to go over them quite seriously. Because there really is not the 

time here for me, from my perspective, from the Administration’s 

position, to do justice to some things. I do not know what CRS provided you with. We do have overall agency earmarks that make 

problems for us in terms of how we allocate money. For example, 

in the environment, the biodiversity earmarks, some countries cannot use that money in our region and they are channeled to other 

regions. So with all due respect, it requires a little longer explanation as to how the overall allocations are made for the agencies. 

I would really request that opportunity, if I could do that. 

Mr. MENENDEZ. Absolutely, absolutely. 

Mr. FRANCO. And on trade capacity-building, and I told Mr. 

Meeks this a year ago, I am proud of that, funding for that area 

was upped with an emphasis on the poor and the small- and microenterprise sectors that we need to support to make that a reality. 

If the President’s vision for the region is a free trade zone and 

those expectations are quite high that incomes will rise, the people 

who need it are the poorest. So our trade capacity focus is to address those sectors that are unable, unlike the big industries, to address the challenges in access markets and comply with the new 

rules of the game. 

I would be happy to supply trade data that we have on Chile and 

Mexico. Could I elect to do that? 

Mr. BURTON. Maybe you could submit those to us so that the 

Members would have a chance to look at those? 

Mr. FRANCO. Certainly. 

Mr. BURTON. Mr. Meeks? 

Mr. MEEKS. Thank you, Mr. Chairman, and I will be brief. I just 

want to ask my good friend, Ambassador Shapiro, just a few questions about his trip yesterday. I know that interim President 

Alexandre has stated that there are bouts of violence. In my district, I have a lot of Haitians and they say there is violence every 

day. They say it is violence and people being abducted, etc. 

But I just want to know from your trip, they say that the elections are still going to go forward. Does it look like a situation 

where elections can go forward, where you can truly have a true 

democratic and honest election based upon some of the things that 

are going on? And where are the Haitians preparing for the elections? 

Mr. SHAPIRO. Thank you, Mr. Meeks. Let me correct what my 

colleague here said. The Secretary did not go with me, I went with 

the Secretary to Haiti. I welcome your question. It was a 1-day 

meeting. The Secretary of State and five Members of Congress met 

with the President, the prime minister and his cabinet and with 

35

the Provisional Electoral Council of Haiti, as well as with 

MINUSTAH, the United Nations, including both the military, the 

police leader and the senior representatives of the Secretary-General of the United Nations. 

The Secretary’s message at each stop was very clear. It is a key 

for Haiti to move from an interim government to an electer government. They need to move ahead to make decisions so that those 

elections can take place as scheduled and power be transferred on 

the 7th of February. Every Haitian interlocutor we spoke with insisted that that was the date. So if you take February 7 and work 

back, the things that they need to do to make those elections take 

place, from setting up polling stations, identifying them, hiring 

staff, working out what appeals processes there might be, there is 

a great deal to be done. And they can do it and they must do it. 

The next government will be the one that the international community interacts with Haiti. It is an historic opportunity. We think 

they are going to seize it and make it happen, sir. 

Mr. MEEKS. What direct assistance do you see us providing Haiti, 

you know, to preserve or restore its democracy? Any direct assistance? I agree with you. I know we need organizations like the OAS 

or CARICOM, but what about us? I mean, I am concerned about 

us. They are our neighbors 90 miles offshore, basically. What are 

we doing? 

Mr. SHAPIRO. We have already contributed $31 million for voter 

registration, political party development, voter education, administration, monitoring of elections, those sorts of things. We are, in 

fact, the largest donor of assistance to Haiti. 

We want an elected constitutional government that we can deal 

with, as does the rest of the international community. We have economic assistance funds and Mr. Franco can detail how they will be 

spent to reactivate the economy. We want to make this country 

move forward. But the first step will be the elections. 

The second point, if I can, underlining, it has been 6 months 

since I have been to Haiti and there has been a difference in the 

security atmosphere there. The MINUSTAH forces, United Nations 

forces that are there, are doing a tremendous job. There is a new 

head of MINUSTAH, a Brazilian general. There is a new head of 

civilian police component, a Canadian. 

Mr. MEEKS. I see my time is about to run out. I want to just get 

this question, since you mentioned the UN. I also heard that some 

of the UN troops were part of the degradation of that site. Some 

of them were raping or part of raping women and looting and 

things of that nature. What can you report back in that regard? 

Mr. SHAPIRO. We do not have any evidence to support that. We 

want all of these allegations to be investigated completely, to find 

out if there is any substance to them. What we saw yesterday—and 

to go back to the issue of Latin America—were Brazilian, Argentine, Chilean, Uruguayan troops from this hemisphere, working together, just in the area of Port au Prince where we were, as well 

as Jordanian troops. It was tremendous to see troops repressing 

nations from this hemisphere assuming responsibility for a problem 

that is a problem of this hemisphere. 

Mr. BURTON. Thank you, Mr. Meeks. Mr. Delahunt? 

36

Mr. DELAHUNT. Yes, thank you, Mr. Chairman. A panelist on the 

next panel, Professor Coppedge, on page three of his testimony, let 

me address this to my friend, Ambassador Shapiro, makes this 

statement:

‘‘The Bush Administration, like the Venezuelan opposition, has 

publicly pursued the short term goal of removing Hugo Chavez 

from power, whether by initially recognizing the junta that 

temporarily seized power unconstitutionally, taking sides in 

the recall effort or lobbying the OAS to invoke the Democratic 

Charter.’’

Is it the policy of the Bush Administration to remove Hugo Chavez? 

Mr. SHAPIRO. No, sir. 

Mr. DELAHUNT. Thank you. I asked a member of my staff to go 

back several days and to examine the Venezuelan press, to make 

an assessment as to its viability. I have handed out a copy to my 

colleagues here of various columns, news reports, regarding the 

Chavez Administration. To say that they are critical is an understatement. I am going to provide those excerpts to you and to, well, 

I will provide them to you, Ambassador. We knew each other well 

during your tenure down as Ambassador to Venezuela. 

From where I sit, and I am going to ask my staff to provide a 

copy of those statements and those newspaper reports to my friend 

and colleague from Florida, Mr. Mack, it looks really pretty vigorous and healthy in terms of criticism of President Chavez. Let me 

just say, I welcome that. I think that is absolutely essential and 

critical. I would like you both to review them and call me up when 

you have a chance and give me your own assessment. 

Also, let me just say this. I have great respect for both of you, 

but I was disappointed that in your assessment of Haiti there was 

no reference whatsoever to allegations regarding intimidation of 

members of the Lavalas party by the so-called interim government. 

It is my understanding that the interim government has proceeded 

against the former Prime Minister Neptune and has arrested an individual who is a member of the Lavalas party called Jean Juste. 

And that as a result of that, they will not have the opportunity, 

obviously, to participate in elections. 

Now, I remember going to Haiti maybe 4 or 5 months ago. There 

was no one in the interim government that felt that the former 

prime minister, who was a positive force in the transition from the 

former President Aristide, was guilty of anything. And yet, the only 

conclusion that many, or the inference that many are drawing is 

that this is an attempt to exclude Lavalas from the process. Let us 

understand that Lavalas does not equal, you know, President 

Aristide, like Sandinistas. There are moderate Sandinistas and 

radical Sandinistas and the same thing in terms of Lavalas. Has 

the Administration taken any policy in an effort to include the 

Lavalas element in that society in the electoral process? 

Mr. SHAPIRO. Absolutely, and that was a key element of the Secretary of State’s message yesterday, that these elections should be 

free, fair, transparent and open to all. She urged the President and 

the prime minister to do whatever they can to accelerate the trials 

37

against these two individuals, former Prime Minister Neptune 

and——

Mr. DELAHUNT. Congratulations, Ambassador, I am glad that you 

sent that message, because if that does not happen, we are going 

to be faced with the reality that there will be universally, throughout the international community, a conclusion that these elections 

were a sham and a shame if that occurs. 

Mr. SHAPIRO. If I may make one more point, Mr. Delahunt, and 

that is that there are 56 Presidential candidates who have registered in Haiti. Four of those are either directly from Lavalas or 

are former Lavalas and two of the leading candidates appear to 

have direct ties with Lavalas. So this election is going to be open. 

The people of Haiti are going to decide, sir. 

Mr. BURTON. The gentleman’s time has expired. Let me just say 

that we are probably not going to have time for the second panel. 

I know that some of you came as far as from Miami, Florida, to 

be here and I want to apologize to you. The schedule has been jumbled all up today and that is the reason why we have had these 

time constraints, so I want to apologize in advance. But what we 

want to get from you is your statements for the record, which we 

will use and we will contact you again at some point in the future. 

And I apologize for the problem. 

Mr. MENENDEZ. Mr. Chairman, is there no other room that we 

could adjourn to? 

Mr. BURTON. If there is, we can go ahead. If you could just be 

patient for a minute, we could maybe adjourn to 2200. We are 

going to check on that and see if that cannot be done, Mr. Menendez. 

Mr. MENENDEZ. Thank you, Mr. Chairman. 

Mr. BURTON. Mr. Payne? 

Mr. PAYNE. Thank you very much. I hope it is available, since 

I talked about all those Ph.D.’s we have here, and then not to be 

able to hear them would be really sad. 

Let me just say, too, I hope that elections in Haiti come off fair 

and transparent. As you know, I have been disappointed that monies that went into the American Development Bank was withheld 

to get Aristide out, but I have been disappointed with what has 

been going on there. I hope that this election will be fair and free. 

I also think that we need to take a look at our agricultural policies. You know, arguably the most effective policies, I am talking 

about in Latin America in general, is to spur economic development 

and would be a combination of elimination of our agricultural cotton and sugar subsidies and the passage of a bilateral fair trade 

agreement as opposed to free trade agreements, which do not address poverty. And that is what I think we have at this point. It 

would prevent the practice of export-dumping in poor countries, 

which drives down prices, leaves workers vulnerable to artificially 

low-priced foreign commodities. It seems to me that if we wanted 

less cocoa grown, one thing we have to do is to let these farmers 

get a livable wage and good prices for their oranges and cotton and 

coffee or whatever they grow, so that therefore it would not be just 

one area. 

As you know, this whole question of coffee becomes a real problem. Five to 23 percent of the total export revenues from Central 

38

America comes from coffee, but now with the policies in, oh, as far 

as Vietnam, it is really having an impact. Finally, though, I just 

have, I guess, a quick question. We are totally aware of United 

States policy toward Venezuela, but let me just read you something 

real quickly. I wonder, you know, where we stand on this issue. 

Just quickly, ‘‘In the past, Venezuela’s oil fields benefitted a few,’’ 

and that is where the problem comes in. When we had these great 

relations with Venezuela, I wonder why our country did not urge 

and push so that the government would use those dollars to assist 

its people. Because here is what happened. Very few benefitted. 

Today, millions benefit. Some remark on what is happening in Venezuela. The lives of millions of Venezuelans are improving as historic wrongs are being righted. The world’s fifth largest oil producer, Venezuela, has long been a country of contrasts. Despite its 

great wealth, 80 percent of Venezuelans live in poverty. Now for 

the first time, millions of Venezuelans have access to education, job 

training, housing, land, clean water, healthcare and something 

even more precious, dignity. August 15, 2004, referendum Presidential candidate was reaffirmed. 

The fact that the government, healthcare is putting tangible 

human rights, it is a part of their country now. There has been a 

plummeting of infant mortality rates. Education is putting millions 

more children into thousands of new schools. High school and college programs are helping children reach new horizons. They even 

looked at women’s programs, indigenous people’s programs and 

Afro-Venezuelan programs. They are gaining power, they are getting land. Say, once again, they have another election. I mean, it 

seems to me that if this government could do these things, why 

was our Government not urging previous governments to be able 

to do the same things? And if you are urging, what seemed to have 

been the stumbling block? And if any of these points that I raise 

are incorrect, perhaps you could point them out to me. 

Mr. FRANCO. I think both of us should, but can I just address the 

development part of it one moment, if I can? 

Mr. BURTON. If you could, very quickly, both of you. 

Mr. FRANCO. On the development programs, we do not have, nor 

have we had in the past, a development program in Venezuela. 

Venezuela was and is, in terms of its gross national products, one 

of the wealthiest, certainly the wealthiest in Latin America, with 

revenues. 

Mr. PAYNE. I was just saying, we were on good, friendly relations. I am not talking about aid. I am just saying it would appear 

to me that our Government would have urged them to, maybe 

what, I do not know, to perhaps look at some of those things that 

are happening now. 

Mr. FRANCO. I would be quick here, Mr. Payne, because I know 

Dr. Shapiro has something to add. I will say this, since there were 

references to different articles on the current situation of Venezuela, a very good OpEd piece to read from Monday’s Washington 

Post is something by Mr. Jackson Diehl that speaks about Venezuela. There is a reference there which is correct and I can certainly supply it to you directly, and that is that the poverty rate 

in Venezuela has actually increased under Mr. Chavez. 

39

So I would submit to you that the situation of the poor in Venezuela is worse off today under Mr. Chavez than it was in the past. 

The number of people, despite a dramatic increase in oil prices, has 

actually lowered the income for the poor. So I would not agree with 

the data that has been presented to you. 

Mr. PAYNE. I would appreciate you sending that to me. 

Mr. SHAPIRO. Mr. Payne, let me just assure you that I have been 

working on Venezuela off and on since the late 80s and at that 

time, we certainly were working with the government to try to 

make those things happen. In the end, decisions on how governments work, how they do things, depends on the people of that 

country itself. 

Mr. BURTON. I want to thank this panel and apologize for the 

abruptness of the conclusion of your testimony, but we do appreciate it. We will submit questions to you for the record, because I 

have some that I did not get a chance to ask. 

I will tell you what we are going to do with the next panel. 

Would you come forward and what we would like to do is have you 

submit your statements for the record. We have panelists here who 

would like to ask some questions of you. Since you are here, we certainly do want to use your knowledge and talent. So if you could 

come forward and we will accept your statements for the record. 

Then, Mr. Menendez, Mr. Payne, Mr. Delahunt and myself will ask 

questions that we think are relevant to the hearing. So, would you 

come forward? Dr. Valenzuela over here, Dr. Coppedge, Ambassador Daremblum and Dr. Purcell. Would you please stand? 

[The prepared statement of Mr. Valenzuela follows:]

PREPARED STATEMENT OF ARTURO A. VALENZUELA, PH.D., DIRECTOR, CENTER FOR

LATIN AMERICAN STUDIES, GEORGETOWN UNIVERSITY

Mr. Chairman and Members of the Subcommittee I am honored to appear before 

you today to discuss the challenges that the countries of the Western Hemisphere 

face in consolidating democratic institutions and practices. Although I am a member 

of the Board of NDI, the National Democratic Institute for International Affairs, I 

appear here today in my capacity as a scholar who has focused for the past thirtyfive years on the study of the origins, consolidation and reversals of democracy in 

the Americas. 

Mr. Chairman, I was privileged to appear before the Subcommittee on March, 

2005 for a hearing that dealt with this same general theme. (And with your permission Mr. Chairman, I would like to include that testimony in the record today, and 

I have attached it to this statement.) In March, I expressed the view that, despite 

difficulties and set-backs, the state of affairs in the Hemisphere is still far more auspicious than it was in the decades of the nineteen sixties through the eighties when 

only three countries in the region, Colombia, Costa Rica and Venezuela avoided authoritarian rule and civil conflicts raged in several countries of Central America. 

The last quarter century has seen the longest single period in history of continuous 

democratic rule without sharp authoritarian reversals. The only stark exception to 

this democratic trend continues to be Cuba. 

As I noted in my earlier testimony the single most important change in the region 

has been the return of the military to the barracks, a pattern that deviates sharply 

from the overt involvement of armed institutions in the changes of governments in 

the region. Authoritarian rule ended in part because of the dramatic failure of military led governments to address the economic and social crises that most countries 

faced, particularly in the aftermath of the sharp economic downturn of the early 

eighties. The end of the Cold War was also an important precipitating factor as the 

struggle between competing ‘‘utopias’’, socialist and free market, dissipated and the 

United States, rather than tolerating dictatorial rule as an antidote for the growth 

of Soviet influence, sought to promote democratic governance together with likeminded states in the region. Concerted action through the Organization of American 

40

States helped to mitigate crisis while putting down the marker that deviations from 

the constitutional order would not be tolerated by the international community. 

Many observers have pointed to public opinion research to suggest that the hardwon gains of this era have generally evaporated. Perhaps the most widely repeated 

statistic is the one cited in the United Nation’s Development Program’s report on 

Democracy in Latin America, where 45% of respondents in a survey taken in 2002 

say that they would opt for an authoritarian form of government as opposed to a 

democratic one, if the former solved the country’s economic problems. But, that hypothetical question is a highly misleading one—assuming indeed that authoritarian 

regimes could solve economic problems. What is remarkable about the question is 

the fact that over fifty percent of Latin Americans were willing to say that they 

would oppose an authoritarian regime, even if it solved the nation’s economic difficulties—an impressive figure in societies with deep social inequalities. Indeed professed ‘‘non-democrats’’ do not exceed 30% in the aggregated figures for the region—

suggesting that for all the frustrations most Latin Americans understand that 

democratic governance is a better option, despite disillusionment with particular aspects of democracy, such as parties and legislatures. 

And yet, it would be mistaken to assume that the Hemisphere across the board 

has turned the corner and has embarked on an unhindered path of democratic consolidation. Although military coups have dissipated, in several countries weak governments operating in a framework of weak institutions have had difficulty generating public policies capable of addressing deep-seated social problems. In my testimony in March, I noted that fourteen elected presidents had not been able to finish 

their terms in office, frequently stepping down in a climate of political instability 

and social unrest. Unfortunately, in the intervening months a fifteenth president, 

President Lucio Gutierrez in Ecuador, also had to leave office early in an atmosphere of confrontation and violence. 

As I said earlier the institutional deficits in several countries include weak state 

institutions, deficits in the rule of law and governmental accountability, serious 

shortcomings in mechanisms of representation, including electoral systems and political parties, and a crisis of governance. The latter phenomenon refers primarily 

to the difficulties leaders occupying the presidency and those controlling congress 

have in structuring viable governing coalitions due in part to the weakness of political parties and in part to the fact that governments are frequently divided governments where presidents face opposition majorities in the legislature with few incentives collaborate with beleaguered chief executives. 

Failures of government reflect institutional weaknesses but also the severe challenges that democratically elected authorities face in a continent where over forty 

percent of the people live in poverty and twenty percent in extreme poverty. The 

problems are circular. Deep seated social problems make it difficult for governments, even those with sound economic policies, to demonstrate concrete and significant results in the short term, particularly if economic policies don’t lead to clear 

employment growth. On the other hand institutional deficits conspire against the 

adoption and implementation of wise and successful policies. If we have learned one 

thing from this transitional phase in Latin American politics it is that first and second generation reforms, such as those aimed at achieving macro-economic stabilization, structural adjustment and privatization, market opening etc . . ., may be necessary, but are not sufficient. What are critical for the sustainability of these reforms are the so called third generation reforms including the widespread adoptions 

of transparent rules and procedures, the implementation of the rule of law and the 

effectiveness of state institutions and policy making bodies. 

In last March’s testimony I provided an overall view of the continent and discussed in analytical terms the challenges that democracy faces in the region. I also 

noted how failings in U.S. policy have contributed to the problem. With the focus 

of this hearing on ‘‘hotspots’’ in Latin America, my objective is to provide a more 

specific overview on a country and regional basis of the state of democracy in the 

Hemisphere. I will again conclude with some reflections regarding the direction of 

US policy. 

A Tour of the Region: Clearing-up Conceptual Confusion 

Mr. Chairman, in developing this argument, I would submit to you that there is 

considerable conceptual confusion in characterizing the challenges that countries in 

the region face. The dominant argument one hears, particularly in this town and 

in the press, is that the failures of democracy in the region have led to a rise of 

leftist populism that will further undermine democracy and U.S. interests. Both 

premises underlying this argument can be questioned—that democracies are failing 

across the board and that leftist populism is on the rise. I will address each in turn. 

41

Perhaps the most important generalization that we can make about Latin America is that one should not generalize about the region. There is no question that in 

several countries in the region democracy is under stress and that political and social unrest is likely to continue. These countries are all characterized by a very limited history as fully functioning democracies and include Haiti, Bolivia. Indeed, 

Haiti has never had a democracy. The only transition from one elected leader took 

place when Aristide turned over the presidential mantle to President Preval, but the 

underlying legitimacy of the electoral process left much to be desired. And while Bolivia went through a remarkable period of democratic governance beginning in the 

eighties, the institutional pillars of that transitional period, including political parties and governing agreements have crumbled as the politics of the street—a feature 

of the Bolivian political system going back for decades—has overwhelmed institutional politics. Even so, it is noteworthy that Bolivia has not fallen back into the 

throes of military juntas and is searching for an electoral solution for its current 

crisis. A smooth outcome is unlikely given the increased polarization in the country 

between regions and the radicalization of opposition groups. 

In the Southern Cone of Latin America three other countries present unusual 

challenges. Like Bolivia, Paraguay has a long history of authoritarianism and one 

party rule. Public opinion surveys suggest that the authoritarian option continues 

to be favored by a substantial, though not majority, portion of the population. Ecuador, with its sharp divisions between coast and highlands, its fragmented parties, 

its unyielding elites and increasingly radicalized indigenous movements will also 

find it difficult to consolidate democracy despite the absence of overt involvement 

of the armed forces in politics which characterized its political system throughout 

the Twentieth Century. The fact that the last three elected presidents did not finish 

their terms is reminiscent of the fate of President Velasco Ibarra who was elected 

president five times, only to serve out one full constitutional term. 

Venezuela is the only country in the Hemisphere where one can argue that there 

has been a significant reversal in the democratic process, one beginning before the 

advent of Hugo Chavez and, indeed, constitutes an explanation for his rise to power. 

Venezuela, which structured democratic institutions late by comparison with other 

large countries in the region, built its democratic state and its party system around 

the distribution to party constituencies of the country’s petroleum generated wealth, 

with both major parties engaging in an elaborate log-rolling strategy that permitted 

them to benefit while excluding other sectors. The collapse of oil prices meant the 

disappearance of the political lubricant that kept the system going—leading to the 

crumbling of political parties and the rise of leaders with populist appeals culminating in Chavez leftist populism. Ironically, rather than attempting to build a 

genuinely new institutional base, Chavez through demagogic appeals has set out to 

do exactly what is much vilified predecessors did—attempt to distribute oil wealth 

to his constituents to the detriment of others—without creating the basis for a political system not fueled by oil. Given the lack of investment in the country and the 

continued polarization, Chavez runs the risk of collapsing with a significant downturn in the oil economy. Chavez’ majoritarian support provides him with the tools 

to continue to undermine the fundamental architecture of a democracy political system, one in which the rule of law prevails in favor of the protection of minorities 

and future majorities. 

But if the countries just listed are facing serious challenges and democracy is imperiled, it is notable that the picture is far more positive in other countries of the 

region. Chile stands out as a country that went through a wrenching polarization 

that brought down one of the oldest democracies in the world, but has managed to 

rediscover its democratic roots while promoting strong pro-growth policies with policies designed to reduce poverty. Along with Costa Rica and Uruguay, Chile stands 

out as a country with consolidated institutions, where governments are accountable 

and the rule of law prevails. 

At the same time the largest countries in the region have achieved notable success. Brazil, despite the corruption scandals of the current administration, has remained on a decidedly democratic path while following generally sound economic 

policies. Argentina after the most devastating collapse of its economy since the great 

depression has been able to turn things around within democracy restoring the flagging faith of citizens in democratic leaders and institutions. Colombia, challenged 

by several armed groups, including powerful criminal organizations involved in the 

drug trade, has managed with U.S. support to strengthen the institutions of the 

state, reverse a downward economic trend and restore the faith of citizens in civilian 

leadership. Mexico, perhaps undergoing the most complex transition of all—from a 

highly institutionalized one party state to a competitive democracy—faces serious 

challenges in avoiding institutional deadlock and moving a public policy agenda forward, but faces no significant danger of authoritarian reversal. 

42

Finally, Central America and the Caribbean, with the notable exceptions of Haiti 

and totalitarian Cuba, in part due to the increased integration of the region into 

the American economy and the important role that remittances play (as they do 

elsewhere) have made strides in strengthening of democratic institutions, with Nicaragua and Guatemala facing the greatest challenges as corruption and personalism 

continue to hold sway. In sum, Mr. Chairman this is a survey where the glass is 

half full, not half empty. The greatest challenges lie primarily in the Andean region 

and in the Caribbean with Haiti and Cuba. 

What about the second underlying assumption—that the region is inevitably moving towards the embrace of leftist populism? Such an observation also does not 

stand up to analytical scrutiny. We have already seen that the Chavez phenomenon 

has not been replicated in Brazil, Ecuador, Argentina or Uruguay, despite the election of leaders with support from leftist constituencies claiming a left of center platform. With the exception of Ecuador, leaders have based their elections on strongly 

constituted political forces that have been around for some time and in office have 

sought to govern through compromise and conciliation while respecting institutional 

rules. Indeed most leaders of the left in the region prefer to identify themselves with 

the Socialist government of Ricardo Lagos in Chile than with the populism of Chavez, and that goes as well for the leading candidate for the Presidency of Mexico 

who hails from the left. 

This does not mean that Chavez has not succeeded in projecting himself as a popular figure in the region—his populist rhetoric and anti-Americanism resonates in 

a region where U.S. policy in the world is highly unpopular. But whether that popularity will translate into many other Chavez’ in the region is questionable. The Colombian’s next year are likely to reelected by overwhelming majorities their right 

of center, law and order president, while the Chileans will continue with the ruling 

Concertacion A Lula defeat in Brazil may very well return to power the coalition 

that governed with Fernando Henrique Cardoso—and even a Garotinho as a populist option would not reproduce the Chavez phenomenon. 

Directions for U.S. Policy 

Mr. Chairman, my comments are meant to properly contextualize Latin American 

reality as a prelude to thinking about the direction of U.S. policy. By arguing that 

we need to understand that many countries in the region are doing relatively well 

and that some have made notable improvements, I don’t mean to imply that we 

should be complacent. Indeed, even the Chileans understanding today that a failed 

Bolivia is not in their long term interests, nor is it in the fundamental interests of 

the United States. It is critical that the United States reengage in the region in a 

constructive manner. In my testimony in March I noted how missteps in U.S. policy 

in crisis management in the Hemisphere, including the Argentinean devaluation, 

the support for an unconstitutional alternative to Chavez in Venezuela, the collapse 

of the Sanchez de Lozada government in Bolivia and the ouster of Aristide in Haiti, 

undermined U.S. moral and political authority in the Hemisphere. 

This, along with the overwhelming rejection of the fundamental direction of U.S. 

foreign policy globally, especially the War in Iraq, has made if far more difficult for 

the U.S. to engage other Hemispheric leaders in dealing with such thorny issues as 

indigenous movements in Bolivia and Ecuador and Chavez’ claim to leadership in 

the region. U.S. officials proclaim frustration that other democratic leaders in the 

Hemisphere are not standing-up to the plate in pushing back on Chavez. It is not 

a matter of reticence to become engaged or to interfere in the affairs of other countries. A review of many of the challenges that democracy faced in Latin America 

from the early 1990s would show that key leaders and countries were willing to take 

stands—from the willingness to impose an embargo on the Haitian Cedras Junta, 

to invoking Resolution 1980 in several instances of interruption of the constitutional 

order, to the unprecedented steps taken with respect to the Fujimori government 

in Peru when it carried out an election that did not meet international standards. 

The problem is that leaders in the region have been far more reluctant than in 

the past to work with the United States in resolving the problems of the region because they are deeply dissatisfied with what they view as peremptory treatment of 

their interests and sensibilities. Whether it was the open and very personal dissatisfaction regarding the stand that Mexico and Chile took at the United Nations 

Security Council regarding the failed resolution that would have authorized international support for the War in Iraq; whether it is the continued attempt to force 

countries to sign Article 98 exemptions regarding the International Criminal Court; 

whether it is the discomfort stemming from more visits to the region from Secretary 

of Defense Rumsfeld than the Secretary of State; whether it is the way in which 

the U.S. led its campaign to have former President Flores of El Salvador designated 

as Secretary General of the Organization of American States, thereby artificially enVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6621 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
43

gendering a polarization in the Hemisphere, leaders in the region have pushed back 

on a heavy handed diplomacy that has made it more difficult for them to appear 

to be doing Washington’s bidding. 

With the appointment of Assistant Secretary of State Thomas Shannon, the 

United States has an excellent opportunity to begin the process of rebuilding better 

trust with the Hemisphere precisely to better address the challenges the country 

faces. Whether Chavez succeeds in moving his agenda forward depends more on 

what the U.S. can do for the countries that are more at risk and how it can collaborate with other democracies in the America’s in pursuing that end. U.S. assistance 

to the region far surpasses that of any country, including Venezuela, and yet the 

assistance has lost its clout and diminished significantly in objective terms as I 

noted as well in my previous testimony. For this reason support for Congressman 

Bob Menendez Social Investment and Economic Development Fund would be an essential first step. 

Ultimately, the United States must look at its policy towards the region in strategic terms in its own right. U.S. interests are clear: the security of the United 

States requires a prosperous and stable Hemisphere. Our policies should not be simply extensions of U.S. domestic politics, whether it is in the appointment of officials 

or in the support of candidacies for international organizations. Nor should assistance be simply predicated on whether countries are willing to comply with the 

United States, whether regarding Article 98, or particular votes in international for 

matters not directly relevant to the Hemisphere. It should be based on a policy a 

genuine engagement that seeks the commonalities of interests and builds on the 

successes of this era of democratization while ensuring that it will endure. For that 

tohappen the Western Hemisphere must move up on the priority list of U.S. foreign 

policy.

[The prepared statement of Mr. Daremblum follows:]

PREPARED STATEMENT OF JAIME DAREMBLUM, PH.D., DIRECTOR, CENTER FOR LATIN

AMERICAN STUDIES, HUDSON INSTITUTE

Chairman Burton, distinguished Members of the Committee: 

I am very honored to have been invited to testify on this important subject: ‘‘Keeping Democracy on Track: Hotspots in Latin America.’’

Like a student who fails a final exam after studying very hard, so too do the Latin 

American countries feel that two decades of economic transformation with market 

oriented reforms have not made a dent in the mass of poverty that afflicts the region. Sadly, today there is more poverty and inequality than at the time when reforms were embraced by forward-looking governments as a panacea for the entrenched social maladies inherited from the past. Poverty and inequality also have 

become fertile ground for populism. 

Such discouragement, however, should not hide from view the bright side of the 

picture, because the accomplishments achieved during this period are praiseworthy. 

Dramatic Changes 

Little more than two decades ago, in most of the region it was necessary to look 

hard in order to find, all together in a single package, democracy, respect for human 

rights, responsible monetary and fiscal policies as well as trade liberalization. 

Now, there are good reasons to be concerned about some hotspots in Latin America, but nobody can deny the positive political and economic changes undergone by 

most countries over the last two decades. 

Twenty years ago there were only three democratically elected governments. Presently, only two countries do not have freely elected leaders. Then, annual inflation 

was measured in high double- and sometime triple-digits. Today, the average inflation runs somewhat less than ten percent. Fiscal deficits by now have dropped almost fifty percent in relation to GDP from where they stood two decades ago. Likewise, on average, tariffs on trade have come down from forty to ten percent, while 

the reduction of non-tariff barriers is even deeper. 

We could quote from an abundance of data, but the lesson is clear: most Latin 

American countries have worked hard in the last two decades seeking to improve 

their chances for development and the well-being of their citizens. 

Inadequate Results 

In this regard, a passionate academic debate still goes on today concerning the 

reforms adopted pursuant to the so-called Washington Consensus. Such discussion 

has in many instances defined political and ideological battlefields in the hemisphere. Thus, in some quarters the Washington Consensus remains the culprit for 

every problem past, present and future in Latin America. Others, more sympathetic, 

44

hold that the reforms were not implemented properly and, for this reason, actually 

impeded the expected good results. 

Let us set aside that discussion for now and agree that positive changes have 

taken place in the last twenty years. We can also agree that with free elections, people expected a commensurate improvement in their standard of living with the implementation of sometimes-difficult economic programs and more open trade. They 

had done their homework and expected what they were promised. 

Yet, democracy, fiscal and monetary restraint, and increased foreign trade did not 

bring about the growth in economic levels, or the reduction of poverty, inequality 

and social exclusion that were expected. 

On the contrary, there is now in Latin America more poverty, both in absolute 

and relative terms, than in 1980 or 1990. According to the Economic Commission 

of Latin America and the Caribbean (ECLAC), in 2004 a total of 222 million people 

were living in poverty and 96 million of them suffered from extreme poverty. This 

means a total poverty rate of 42.9 percent and an extreme poverty rate of 18.6 percent. In comparison, total poverty rates were, respectively, 35 percent in 1980 and 

41 percent in 1990. 

Sluggish economic growth partially explains these results. Between 1990 and 

2004 the average annual rate of economic growth was only 2.7 percent, while the 

population was increasing at an average of 1.6 percent every year. The slow growth 

was compounded by an increase in the unemployment rate from 6.9 percent in 1990 

to 10 percent in 2004. 

Furthermore, the spread of democracy did not generate a corresponding increase 

in opportunities for most people as would have been expected. On the contrary, a 

study conducted by the Inter-American Development Bank (IDB) shows that 

throughout the 1990’s, inequality rates in Latin America remained the worst in the 

world: the lowest fifth of the population received 4.5 percent of national income, 

while the highest fifth accounted for 55 percent. 

Compounding the problem is that poverty today is more predominant in some 

groups than in others, especially the rural population, women and indigenous peoples. The IDB estimates that in Latin America as a whole 25 percent of poor people 

are indigenous, and in the Andean and Meso-American countries (Central America 

and the South of Mexico) it rises to 60 percent. It is not by chance, therefore, that 

among the regional hotspots, countries with high proportions of indigenous populations stand out. 

Frustration 

In spite of the expansion of democracy and market-oriented economic reforms, nations have not experienced significant improvements in their standard of living—

some have even suffered setbacks—and socioeconomic gaps have widened. Here lies 

the most important single source of the current wave of political and economic instability in Latin America. 

Expanding over the region, feelings of frustration and hopelessness have had a 

pervasive effect in the general attitudes towards democracy, free markets, political 

and legal institutions, and even with regard to the United States as the main point 

of reference for those values. Countries with strong democratic traditions and functional institutions, as well as nations with reasonable growth and adequate social 

policies, have coped better with the tide of pessimism. Others have found ways to 

channel frustrations through legitimate political change, but the most fragile democracies risk floundering. 

Bolivia and Ecuador 

Bolivia and Ecuador come to mind as examples of the latter. Vast majorities of 

their populations are indigenous people who feel left behind. They sense the large 

gap between expectations about democratic rule versus the lack of improvement in 

their standards of living. Their dire situation is deeply rooted in the past. Given the 

changes the political system has undergone, they rightly expected a better outcome 

from democracy. 

Added to this historic and social background is the intensity of present complications derived from the weaknesses of public institutions as well as from more visible 

social tensions in those countries. 

Deep divisions along regional, ethnic and economic lines—frequently evidenced in 

the political parties’ platforms, structure and the kind of popular support they gather—are well-known features of the Bolivian and Ecuadorian political environments. 

Regional antagonisms have encouraged political parties usually incapable of compromising with each other and political leaders with a very narrow space to maneuver. 

Such features have nurtured an increasing radicalization of positions rendering 

agreements among parties more difficult to achieve. 

45

A proliferation of small parties, many of them created exclusively to serve as bargaining tools, has made it more difficult to articulate stable majorities in Congress. 

Likewise, Heads of State often lack a congressional majority or even a modest block 

of votes. In such conditions, promoting changes that demand specific legislation becomes a Herculean task and an avenue for corruption, particularly when the 

changes affect special interests. 

In this regard, Ecuadorian President Lucio Gutie ́rrez lost his sizable majority in 

Congress as a result of promoting urgent restrictive fiscal measures. The struggle 

to pass legislation without adequate congressional backing led him to negotiate with 

opposition groups. He entered into an alliance with discredited former President 

Abdala ́ Bucaram, which eventually led to the end of Gutie ́rrez’ presidency in April 

2005. 

We should recall that Gutie ́rrez was elected on a platform to fight corruption. 

However, the arbitrary sacking of Supreme Court magistrates to allow the return 

of the exiled Bucaram triggered massive street protests which, coupled with the maneuvers of his adversaries in Parliament, sealed his fall. 

In Bolivia’s case there is no doubt that the identification with market-oriented reforms introduced by Gonzalo Sa ́nchez de Lozada during his previous presidency in 

1993–1997, turned out to be a crucial debilitating factor as he began his second 

term in 2002. For the indigenous groups, already mobilized by De Lozada’s efforts 

to eradicate coca, as well as his initiative to export natural gas to North America 

and other markets through Chilean territory, they became an additional call to 

arms that intensified street protests and deposed him in October 2003. 

This specific instance gives us an insight into how an inadequate response by the 

U.S. contributed to bring down a friendly leader in Latin America. Sa ́nchez de 

Lozada was under stress on several fronts. He was facing fierce opposition from coca 

growers and their leaders as a consequence of his effort, at the behest of Washington, to eradicate coca and substitute it with other products. On the other hand, 

because of his friendship with the American administration—he was raised and educated in the U.S.—Sa ́nchez de Lozada tried to enlist the support of the White House 

to obtain a sizable package of financial aid to fend off the backlash triggered by the 

coca eradication program. He was not shown the support he badly needed and soon 

he was out of office. The U.S. lost an important ally while the coca growers’ movement gained a decisive political battle. 

The most visible leader of the coca growers, Evo Morales, a member of Congress 

who boasts of his friendship with Fidel Castro and Hugo Cha ́vez, is one of the two 

top contenders for the Presidential elections in Bolivia. Currently he leads in the 

polls for the coming elections in December 2005. The importance of this contest can 

hardly be missed. Former President Jorge Quiroga, a young, talented and responsible leader, is the other main contender. He most probably keeps a fresh memory 

of the Sa ́nchez de Lozada fiasco. 

Coca eradication is understandably a priority for the U.S. Government, widely 

supported by its partners in the war against drugs in the region. However, it is a 

policy with social implications that need to be addressed in a creative and sustainable manner. Such an impact cannot be shouldered entirely by poor Andean countries like Bolivia. Neither is it in the best interest of the U.S. to contribute to the 

instability of friendly governments by not lending timely help to cope with the acute 

social problems afflicting those nations. This is perhaps the most important lesson 

to be learned in order to develop a comprehensive approach in dealing with hotspots 

in Latin America. 

The Cha ́vez Conundrum 

Venezuela’s case shares some traits with Bolivia and Ecuador, but has important 

differences too. The widespread dissatisfaction with the lack of improvement in the 

well-being of millions of poor people in a country rich in natural resources was a 

key factor in the rise to power of Hugo Cha ́vez. But in addition, and perhaps even 

more important, was the fact that a majority of citizens had lost faith in the corrupt 

political parties which governed Venezuela during four decades, which led them to 

elect as President the unrepentant leader of a failed military coup. 

While in office since 1999, Cha ́vez has increasingly and systematically drifted 

away from democratic procedures. The trend has become more notorious as he has 

gradually suppressed the opposition, imposed drastic limits to fundamental freedoms, seized private businesses, and embraced Fidel Castro. 

From the beginning it was not an easy task to deal with this complex situation. 

However, things worsened by mistakes in the overall handling of the coup that 

briefly ousted Cha ́vez from office in 2002. These errors gave currency to the impression that somehow the U.S. looked favorably upon the attempted break of constitutional order in Venezuela. 

46

Cha ́vez seized the occasion to spread the notion that the U.S. had a role in the 

plot to depose him. Since then, the rhetorical confrontations with Cha ́vez have not 

been helpful for the U.S. The truth of the matter is that Chavez craves and seeks 

to provoke such confrontations because it enhances his image among important sectors of the Venezuelans and other nations. At the same time, it diverts attention 

from his actions and is an easy way to avoid a serious assessment of his misdeeds 

by other countries in the region that could evolve into a peer-pressure difficult to 

withstand. 

In the meantime, Cha ́vez has been doing his best to gain friends and political 

weight in the region. High oil prices have helped him immensely in this endeavor. 

Taking advantage of the huge oil windfall, he has been busy negotiating agreements 

with Caribbean nations for the supply and refining of oil at very attractive prices. 

This month, the Central American Presidents agreed to petition Chavez for a better 

oil bill. He has also started his own multinational news outlet—TeleSur—to promote 

his views against U.S. policies, in particular CAFTA–DR, the FTAA and other free 

trade agreements presently under negotiation by the U.S. with Andean nations. He 

does so at a time when, except for the fight against drugs and the trade agreements, 

the U.S. seems to be disengaged from Latin America. 

Nicaragua Once More 

Nicaragua is different from the other trouble spots in the Americas. Above all, it 

is the result of a collusion between political elites which lacks significant popular 

support. In fact, a vast majority of Nicaraguans support President Enrique Bolan ̃ os’ 

efforts to improve economic growth, fighting corruption and strengthening social 

programs. The pact between the Frente Sandinista’s leader, Daniel Ortega, and convicted former President Arnoldo Alema ́n and his minions is a naked quid pro-quo: 

the Sandinistas get to fill key positions in order to control pivotal public institutions, 

and Alema ́n goes free, out of jail, thanks to dubious legal grounds. 

The real problem lies in the notorious weakness of Nicaraguan institutions, starting with the Supreme Court and Congress and descending into the public administration apparatus. This is derived from the absolute control that Ortega and Alema ́n have had over the two main political parties, enabling them to pack the Parliament 

and the courts with die-hard loyalists and, in the process, punish a few dissidents 

who dared say no. 

Luckily, this picture seems to suggest a not-too-far-distant solution. The reiterated 

attempts of Ortega and Alema ́n to pursue overtly corrupt deals have encouraged a 

growing dissidence both in numbers and in political standing. At the same time, an 

important number of high profile dissenters are gaining electoral strength as independents among the many Nicaraguans who are tired of the prevalent type of politics. This dynamic has the potential to bury the domination of power Ortega and 

Alema ́n have shared for so long. 

There is, nevertheless, a well known lesson in the current Nicaraguan turmoil: 

in democratic transitions it is essential to strengthen the nascent public institutions 

which will eventually allow the interplay of real checks and balances typical of more 

mature pluralistic systems. Democracy has never been a one shot gamble. Rather, 

it requires continuous nurturing in order to succeed over time. 

Policy Options and Further Actions 

Recently, a veteran Latin American diplomat, when learning of the devastation 

brought by hurricane Katrina, exclaimed: ‘‘Now our countries will be pushed further 

away from the Administration’s radar, behind Iraq and Katrina.’’ We should now 

add Rita to the list of problems overshadowing Latin America. 

The truth of the matter is that Latin America has felt neglected by the U.S. since 

9/11. With the exception of the old agenda on drugs and the free trade agreements, 

namely CAFTA–DR, the FTAA, and those under negotiation with Andean countries, 

the region has been taken into account only with respect to Cuba and Venezuela. 

We have not seen a wide-ranging policy towards the Southern neighbors. The deafening clamor coming out of Foreign Ministries and hemispheric gatherings is more 

engagement. 

Yes, the U.S. should be more engaged in Latin America. But engagement needs 

content, a forward-looking succession of actions capable of yielding sustainable results in terms of democracy and economic growth coupled with social improvement. 

It is the only approach that can bring a modicum of stability to simmering hotspots 

in this crucial region. 

How to achieve those overarching goals? Let me spell out some ideas from my perspective on U.S. foreign policy:

• Proactive stance. There has been an endemic proclivity to wait for a crisis to 

grow in lieu of a timely, preventive mode. The attention span conceded to the 

47

region has become infamously short and a significant improvement in the attention deficit is urgently needed.

• Improved diagnostics. It is crucial for policy and decision makers to understand clearly the nature of the issues at play as well as the particular nuances that tend to be overlooked in general yardsticks for the region. The onesize-fits-all approach should be replaced by a conscious fine-tuning for individual situations or actors.

• Develop a true dialogue and overcome the tendency to lecture. To improve the 

policy-making process and to create valid, lasting and productive partnerships, it is essential to have a frank and honest dialogue with the Latin 

American counterparts. A dialogue requires not only talking but also listening 

and paying attention to the interlocutors’ positions, worries and criticisms. As 

part of this effort, there is a need for a more frequent, periodic and steady 

review of standing issues at the higher levels of diplomacy. The Secretary of 

State should invite the counterparts of the major countries to analyze and 

discuss issues of mutual concern in low-profile meetings which could be followed up by other officials such as Undersecretaries or Assistant Secretaries. 

This process is bound to facilitate agreements in hemispheric or regional forums with less stress and heated publicity.

• Strengthen institutions. Democracy, rule of law, respect for human rights, economic growth and international trade are based on and highly dependant on 

the strength of the institutional framework of a given society. The weakness 

of key institutions such as political parties, the Judiciary, or the Parliament, 

is at the root of the most serious problems faced by several Latin American 

countries. To build institutions is always difficult, and more so after dictatorships have damaged important parts of the social fabric. It takes resources, 

time, patience, and expertise, which sometimes are lacking in a particular 

country. Nevertheless, there is no more important task than to help nations 

in transition towards democracy achieve: 

— An independent and capable judicial system, which is essential to promote growth, to ensure respect for human rights and to fight corruption 

— Modern Parliaments, including capabilities for an informed and effective 

decision-making process 

— Consistent and responsible pro democracy political parties. The National 

Endowment for Democracy, the National Democratic Institute and the 

International Republican Institute have made outstanding contributions 

to this end throughout the Hemisphere and their work becomes essential in the present juncture. 

— Property rights that provide the bedrock for investment, entrepreneurship, and encourage the leveraging of assets by the poorer strata of society 

— Education and health systems

• Foster positive trends. The bright spots, and not only the hotspots, should be 

highlighted. There are many good things Latin American countries have been 

doing which deserve support and encouragement. Three examples come to 

mind: 

— Countering poverty head-on, with innovative, ambitious and successful 

programs such as Bolsa Famı ́lia, in Brazil, and Oportunidades, in Mexico. Both are Conditional Cash Transfer schemes (CCTs), which provide 

modest monthly stipends to poor families that commit to send their children to school and have their health monitored on a regular basis. Such 

programs give families a lifeline and at the same time stimulate the creation of human capital through better educated and healthier young 

people. This way entire families become seeds for breaking the poverty 

cycle over time. The Brazilian program benefits some 7.5 million families and the Mexican initiative 5 million families. 

— Trade agreements which improve access of the Latin American countries 

to the U.S. market are commendable. However, we need to bear in mind 

that in Latin America many view statements made by developed economies about the virtues of free trade contradictory to their subsidies, 

quotas and tariffs that prevent poorer countries from exporting agricultural goods in which they have a comparative advantage. This open 

chapter demands greater attention by the U.S. and its European partners. 

— A helping hand for growth. Even with opportunities for trade, the poorest countries confront obstacles for which they require a helping hand. 

The Millennium Challenge Account (MCA) and the Millennium ChalVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6621 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
48

lenge Corporation (MCC), created with bipartisan support, are a forceful 

and commendable idea. There have been, as we all know, concerns about 

the speed of the process but some glitches are to be expected when 

launching such an important initiative. A key complement could become 

the projected fund for social assistance promoted by Congressman Bob 

Menendez which has been advancing through the legislative process.

• Better use of existing institutions. Strengthening national institutions and fostering positive initiatives demands involving the Inter-American and international institutions that operate in the region. Whether in the realm of public health (Pan American Health Organization), agriculture (Inter-American 

Institute of Cooperation for Agriculture), political and democratic issues (Organization of American States), or financing for economic stability or development (International Monetary Fund, World Bank and the Inter-American Development Bank), multiple resources can play an important role in the fulfillment of the most pressing needs of Latin America. As an example, experts 

of those institutions could assist countries that have qualified for the MCA 

to prepare adequate proposals for sound technical projects with considerable 

social benefits. Of course, some of those entities carry a heavy baggage of bureaucratic vices. But their involvement can be on an ad-hoc basis and under 

strict rules of accountability.

• Reinforce public diplomacy. The Administration should be commended for its 

renewed effort to strengthen public diplomacy since this is an important element of diplomatic engagement. However, this is being done with the Middle 

East in mind. Restricting this effort to the Middle East would be a glaring 

mistake at the present time when a cast of characters unfriendly to the U.S. 

is stepping up a campaign for the hearts and minds of the younger generations of Latin Americans. To continue to retrench in this region, which has 

been the tendency of the U.S. for a long time now, will only worsen the current U.S image in Latin America which is by no means positive. The task is 

a long term endeavor, and a good starting point would be to increase substantially the scholarships for Latin American students in the U.S. at different 

levels, namely, high school and university plus special visits for young leaders 

and new faces in Latin American politics. The number of young American 

visitors to Latin America also should expand under existing or new programs.

One last thought on how to cope with hotspots. With the goal of building a better 

region, more prosperous and with greater opportunities for all, the Latin American 

nations have laid down important foundations and they continue to work hard at 

it. Nevertheless, a helping hand from the democratic superpower is always appreciated. This does not mean necessarily financial backing. As outlined above, the todo list for the U.S. is far more ample and would greatly contribute to reaffirm its 

relations with the overwhelming majority of friendly countries it has in the region. 

More intense cooperation in the form of true Inter-American diplomacy is the best 

strategy to reduce the proliferation of hotspots and limit their damaging impact.

[The prepared statement of Ms. Purcell follows:]

PREPARED STATEMENT OF SUSAN KAUFMAN PURCELL, PH.D., DIRECTOR, CENTER FOR

HEMISPHERIC POLICY, UNIVERSITY OF MIAMI

Democracy has made great strides in Latin America during the past two decades. 

All the countries of the region have democratically-elected leaders, with the exception of Cuba. The electoral processes that brought them to power are more transparent and free from fraud than ever before. The press is also largely free. Military 

establishments retain varying degrees of political influence but have refrained from 

overturning elected governments whose policies or behavior they dislike. Political 

parties have become more pragmatic and less ideological and a greater percentage 

of the voting-age population is now participating in the democratic political process. 

Continued democratic progress in Latin America, however, is far from assured. 

Many of the region’s democracies remain fragile and weakly institutionalized. Corruption at all levels of government continues to erode democratic legitimacy. The 

political accountability of elected officials is weak and the rule of law is largely absent. Legislatures are politically fragmented, making the passage of needed reforms 

difficult, if not impossible. Most disturbing is the fact that too many of the region’s 

inhabitants question the ability of democracy to provide them with the services they 

need to improve their standard of living, such as jobs, education and personal security. 

49

Although the future of Latin America’s democracies remains unclear, one encouraging development has been the decline of military coups against elected governments. In the past, when democratic governments were stalemated or proved unable 

to maintain control over unhappy, mobilized portions of the population, the military 

would take and retain power until they were satisfied that civilians could once again 

be trusted to govern. Often, these military coups were supported or encouraged by 

middle- and upper-class groups who believed that the military was more qualified 

than civilians to govern. As Latin America became more developed and its people 

more educated, this justification for military rule began to disappear. Disillusionment with military rule also resulted from excesses committed by military governments, as well as from efforts by the United States and other industrialized democracies to strengthen democratic institutions and processes. 

Although military coups are no longer the norm, they unfortunately have been replaced by ‘‘civilian coups’’ that constitute a marginal improvement but remain both 

an indication of democratic fragility and a threat to the institutionalization of democracy in the region. In civilian coups the elected president is forced from office, 

not as a result of military force but as a result of the threat of mass violence. Fernando de la Rua in Argentina, Gonzalo Sanchez de Lozada and Carlos Mesa in Bolivia and Lucio Gutierrez in Ecuador were removed as a result of this process. In 

each of these cases, the departing president was succeeded by his constitutionallydesignated successor. 

It can be argued that civilian coups against authoritarian regimes, such as occurred in Ukraine, advance democracy. It is more problematic to claim that they 

have the same effect when they are directed against democratically-elected presidents. The reality is that civilian coups in Latin America are a serious indication 

that democracy is in trouble in those countries where they occur. 

The leaders of most of the civilian coups that have occurred in Latin America 

claim to represent groups that are marginalized politically and economically and 

have been encouraged by these leaders to take direct action against the government. 

In a sense, they represent a new form of populism. After civilian coups succeed, 

their leaders use their success as the basis for a run at the presidency. This is what 

is happening today in Bolivia. Evo Morales, who helped oust Sanchez de Lozada 

from office, could be the next elected president of Bolivia. This is worrisome since 

he has made clear his dislike and contempt for the United States and market economies and shows signs of authoritarian political leanings, despite his eagerness to 

use the electoral system to further his presidential ambitions. 

The Venezuelan case is somewhat different, in that Hugo Chavez, unlike Evo Morales, first attempted a traditional military coup. When his attempt failed, he was 

nevertheless able to portray his effort as aimed toward toppling a corrupt political 

class that kept Venezuela’s oil wealth for itself instead of sharing it with the poor. 

Chavez then decided to use the electoral system to win the presidency and subsequently used democratic rules of the game to concentrate ever more power in his 

own hands. 

Civilian coups, whether engineered by autocratic populist opposition leaders or incumbent presidents who use democratic processes to undermine democracy, constitute serious challenges for the future of democracy in Latin America and for U.S. 

policy toward the region. They are more complicated to deal with than outright military coups because they blur the line between democracy and authoritarianism and 

therefore have more democratic legitimacy than regimes based on traditional military coups. Their legitimacy is further enhanced by their promise to create a more 

just and equitable social order. 

It is in the interest of the United States to have a democratic Latin America. Stable democracies tend to have peaceful relations with other democracies, are more 

favorably disposed to economic policies that are conducive to economic growth and 

development, and are accountable to their populations. Although there were periods 

during the Cold War when Washington preferred friendly military regimes to unfriendly, weak democratic governments, U.S. policy since the presidency of Jimmy 

Carter has been strongly supportive of democracy in Latin America. 

Washington’s pro-democracy policies have generally focused on strengthening 

democratic institutions and processes, as well as market economies. Included in the 

first category are support for human rights and the promotion of free, fair and 

transparent electoral processes, as well as efforts to strengthen the rule of law, political parties and independent grass-roots organizations. The second category includes policies supportive of privatization and tax, exchange rate and labor reform, 

as well as bilateral, regional and hemispheric free trade agreements. 

These are all worthwhile policies and were embraced, often enthusiastically, by 

Latin Americans during the early 1990s. In recent years, however, the economic 

components of U.S. policy have been increasingly under attack in many parts of the 

50

region for failing to live up to the high expectations that were generated. Specifically, the so-called Washington Consensus is now criticized for failing to produce significant rates of economic growth as well as jobs. The policies are also being blamed 

for principally benefiting the wealthy, while making the already dire economic situation of the rural and urban poor considerably worse. Many supporters of U.S. policy 

argue that the problem was not Washington’s policies but rather, the failure of 

Latin American governments to implement a second stage of necessary reforms. 

This argument, however, has fallen on deaf ears. 

Latin America is now polarized over the economic policies supported by Washington, with opponents often linking their arguments to a general anti-globalization 

ideology. This situation is not good for Latin America or for the United States. In 

order to reduce the polarization, Washington needs to adjust its free trade message 

somewhat. Specifically, it must more directly acknowledge that market-friendly policies initially do not, and cannot, benefit everyone, although ultimately they allow 

a country to prosper. During the transition to more open economies, therefore, supplementary policies and perhaps some kinds of assistance are necessary to level the 

playing field between those with skills compatible with the new economy and those 

who need to acquire such skills. This is particularly true in Latin America, where 

the gap between these two groups is very wide. 

This is an area that lends itself to a cooperative effort with Latin America to work 

out what might be done. A good place to begin is the upcoming Summit of the Americas, which will take place November 4–5 in Mar del Plata, Argentina. Unfortunately, some of the Argentine officials in charge of the Summit are playing up the 

split between the United States and Latin America on the globalization/free trade 

issue. It would be useful for President Bush to join with other Latin American presidents at the Summit in supporting market-friendly policies that have a social component, thereby offering some hope to those who fear such policies. 

President Bush could also share some of his thoughts on how the U.S. plans to 

deal with the devastation caused by Hurricanes Katrina and Rita in areas of the 

United States that share some characteristics with developing countries. His desire 

to foster independence and initiative on the part of the poor by eschewing bureaucracy and giving aid, vouchers and the like directly to those who need help would 

generate considerable interest. Mexico and Brazil are already experimenting with 

anti-poverty programs that give money for food and clothing directly to the mothers 

of poor children. These programs are not explicitly part of a ‘‘compassionate conservative’’ agenda, but they share some elements of President Bush’s approach. They 

also reflect an effort to avoid the dead weight of bureaucracy, which has plagued 

Latin America since colonial times. 

Interestingly, the majority of Latin American governments may not, in fact, be as 

opposed to globalization and market economies as the conventional wisdom argues. 

The region’s much touted move to the left does not necessarily mean that most leftof-center leaders agree with Hugo Chavez or Fidel Castro. A recent Zogby poll of 

Latin American political and economic elites, sponsored by the Miami Herald and 

the University of Miami’s School of Business Administration, found that the Latin 

American leader most admired by other Latin American leaders is Ricardo Lagos, 

not Chavez or Castro. Lagos is the best example in the region of a president who 

has successfully combined market reforms with socially-conscious policies. Despite 

being a ‘‘man of the left,’’ he is considered a pragmatist rather than an ideologue, 

in contrast with Chavez and Castro. 

If on the economic side U.S. policy needs to better combine market-oriented policies with social ones, the challenge is somewhat different on the political side. 

Washington has implemented a wide variety of policies aimed at strengthening 

democratic processes and institutions in Latin America, although the greatest emphasis has been on helping to create free, fair and transparent electoral processes. 

U.S. policy has been largely successful in this regard, especially on the national 

level. The problem is that political accountability is still weak and the reforms needed to strengthen it are strongly opposed by vested interests. Electoral districts, for 

example, are often too large to facilitate communication between elected officials 

and voters. Elections in which victory or defeat depends on a candidate’s place on 

a party list also reduce accountability and encourage corruption. Minimal requirements for establishing and maintaining political parties encourage political fragmentation and give minority interests too much influence in a fragmented and stalemated political system. 

Given the improvement in Latin America’s electoral processes, it is time for U.S. 

policies that support democracy to give greater emphasis to strengthening political 

accountability and the rule of law. Weaknesses in both these areas continue to seriously undermine popular support for democratic systems in Latin America. They 

also discourage foreign and domestic investment, hinder the creation of small busiVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6621 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
51

nesses and in general threaten to undermine much of what Washington has tried 

to achieve over the past several decades. The United States can also make a useful 

contribution to democratic stability and institutionalization by helping Latin American governments establish mechanisms to upgrade the quality of their appointed 

officials. This involves helping these governments move toward a civil service based 

more on merit than on political ties. The same holds true for the selection of judges. 

Ultimately, however, it is the Latin Americans themselves who must decide to fight 

for the kinds of reforms that will make their democracies more accountable and responsive to the needs of their citizens. 

A final way in which Washington can help strengthen Latin American democracy 

involves the reduction of anti-Americanism in the region. Anti-Americanism tends 

to weaken U.S. efforts to promote democracy because it produces distrust or the rejection of policies that Latin Americans regard as ‘‘in Washington’s interest.’’ The 

fact that these policies are also in the interest of Latin Americans themselves may 

mitigate these feelings, but not necessarily eradicate them. For this reason, improving U.S.-Latin American relations should be a high priority of the Bush administration. 

It will not be easy, however, to make the U.S.-Latin American relationship better 

during a period when the United States is engaged in a war on terror. Whenever 

the United States is involved in a global struggle that affects U.S. security interests, 

Latin America feels ignored. This was true during the Cold War and it is true now. 

The best period of U.S.-Latin American relations in recent memory occurred during 

the 1990s, after the Soviet Union collapsed and the Cold War ended. The absence 

of a perceived global security threat allowed Washington to focus on economic issues 

and pay more attention to Latin America and its economic development. This 

pleased the Latin Americans who, like the Europeans, tend to believe that if U.S. 

policy promotes their economic development, current and future security problems 

can either be managed or avoided. 

Unfortunately, since September 11, 2001, the United States has been engaged in 

a global struggle to protect its security and not surprisingly, Latin America again 

feels neglected. The problem is compounded by the Iraq War, which is a preemptive 

war. Latin America is an area where the United States has already used military 

force preemptively. As a result, there is a strong fear in the region of preemptive 

unilateral U.S. military action. The Iraq War, therefore, has revived old fears and 

anti-American sentiments that had been on the decline or had become dormant. 

The United States cannot and should not renounce unilateral military action, preemptive or otherwise, in order to improve its relations with Latin America. But 

there are other things that Washington can do in the region to diminish hostility 

toward the United States. Some are matters of style rather than of substance. When 

Latin Americans are asked what they want from the United States, they frequently 

answer that they want to be treated with respect. It is not readily apparent what 

they mean by this, but it often comes down to wanting high-level U.S. officials to 

meet and consult more frequently with their Latin American counterparts. Since 

September 11, however, it also refers to the visa issue. Latin Americans trying to 

enter the United States are often enraged by the way that they are treated. Despite 

the war on terrorism, which admittedly is a very big complicating factor, the United 

States needs to improve its handling of visitors, not only from Latin America but 

from the rest of the world as well. 

Another frequent complaint from Latin America is that much of U.S. policy toward the region serves U.S. rather than Latin American interests. U.S. economic 

policies oriented toward strengthening market economies and increasing economic 

integration with the United States are often the target of such charges. The shift 

suggested earlier in this paper that would add a social component to existing efforts 

to promote free trade would help ameliorate this problem. President Bush’s efforts 

to achieve a reduction of U.S. and European agricultural tariffs, if successful, would 

also be useful in this regard. 

Also needed, however, is a big improvement in Washington’s public diplomacy efforts. Too many Latin Americans are forming their opinions of U.S. policies from 

sources such as Hugo Chavez, who is hostile to the United States, or from others 

who have an imperfect understanding of what Washington is trying to achieve. It 

is essential that Latin Americans be helped to understand why the policies that the 

United States is supporting strongly serve their interests as well as those of Washington. This does not mean that U.S. officials should rebut every wrong or misleading assertion made about U.S. policy toward the region. Washington’s efforts to 

do this with Hugo Chavez only played into his hands and facilitated his efforts to 

present himself as a nationalist hero who protects weak Latin America against the 

U.S. bully. Instead, the United States needs to explain patiently and clearly what 

it is trying to do in Latin America and why—as many times as necessary. 

52

In conclusion, the overall thrust of U.S. policy toward Latin America is good. Support for democracy and for market economies, including economic integration with 

the U.S. economy, are policies that are mutually beneficial to the United States and 

Latin America. Some fine-tuning of the policies, however, is in order. The economic 

policy in particular needs to be more responsive to the realities facing large numbers of Latin Americans who fear for their livelihoods. This can be done by a public 

acknowledgement of the problem by U.S. officials, accompanied by efforts to cooperate with Latin American leaders in designing a social component to the economic 

policy. In the area of support for democracy, Washington should shift its emphasis 

from elections to political accountability and the rule of law, both of which need 

strengthening. Finally, the weakening of anti-Americanism should be made an essential part of current and future U.S. policy, since an improved U.S.-Latin American relationship would increase the effectiveness of our overall effort to build a 

more democratic and prosperous hemisphere.

[The prepared statement of Mr. Coppedge follows:]

PREPARED STATEMENT OF MICHAEL COPPEDGE, PH.D., ASSOCIATE PROFESSOR, 

DEPARTMENT OF POLITICAL SCIENCE, UNIVERSITY OF NOTRE DAME

Mr. Chairman and Members of the Subcommittee: 

Thank you for the privilege of appearing here today to discuss potential threats 

to the stability of Latin American democratic institutions and to assess U.S. policies 

to reinforce democratic reforms and institutional capacity in the region. I interpret 

the (hotspots( as countries that suffer from any of the four types of problems that 

pose significant challenges to U.S. efforts to promote stable democracy in Latin 

America: 1) weak states, 2) unstable democratic regimes and regimes that are already undemocratic, 3) unstable governments, or 4) governments that are hostile to 

the United States or likely to become so. 

A strong state(one that can control its borders, execute its laws faithfully, adjudicate claims fairly, and maintain public order(is a prerequisite for minimal levels 

of both economic development and democracy. Aside from Chile, Costa Rica, and 

Uruguay, most Latin American states suffer from various chronic state weaknesses 

such as corruption, a politicized judiciary, lack of due process, and administrative 

inefficiency. However, there are more extreme forms of state weakness that permit 

the growth of more worrisome phenomena, such as violent insurgencies, organized 

crime (including narcotrafficking), and mass demonstrations that can disrupt oil 

production and other economic activity. One or more of these phenomena is now a 

serious problem in Colombia, Bolivia, Peru, Ecuador, and Mexico. These activities 

erode the quality of any democracy. If they intensify and persist, they can also 

threaten the survival of democracy. 

We are justified in celebrating the fact that almost all of the countries of Latin 

America are now democracies, but this accomplishment should not distract attention 

from the fact that Cuba still has a totalitarian regime, that Venezuela no longer 

meets the minimum requirements for representative democracy, and that the survival of democracy cannot be taken for granted in Bolivia. 

Attention has been focused recently on other ‘‘hotspots’’ that are undergoing a crisis of government rather than a crisis that endangers the democratic regime. These 

crises of government involve conflicts between the executive and legislative branches 

that are ineffectively mediated by a politicized judiciary. Forty years ago, such crises 

probably would have provoked coups, but in this third wave of democracy in Latin 

America, such crises have almost always been resolved in ways that preserve the 

democratic regime such as resignation, early elections, and impeachment or other 

congressional action to replace the president. Government crises of this type are 

now taking place in Brazil, Peru, Ecuador, Bolivia, and Nicaragua. 

For decades, the only Latin American government that was hostile to the United 

States was the Cuban government. Now it is safe to say that the Venezuelan government is also hostile, and openly aligned with Cuba, and the fact that Venezuela 

supplies 13 percent of the oil imported by the U.S. makes its official hostility a matter of prime concern. The other countries of the region no longer vote reliably with 

the United States in the U.N. or the O.A.S., but this is the result of growing independence in the region, which is healthy, in addition to the global unpopularity of 

certain U.S. foreign policies and actions in the past few years. However, it is possible that other governments will become less friendly to the United States in the 

next year or two. In this regard, developments in Ecuador, Bolivia, Nicaragua, and 

Mexico deserve a careful attention. 

A wise observer of the region once remarked that any statement that begins, 

‘‘Latin America is . . .’’ is necessarily false. With respect to stable democracy, these 

53

countries are all on independent trajectories, so it is most efficient to analyze them 

separately. Nevertheless, we can begin by noting that there are no hotspots, as I 

have defined them, in many Latin American countries, including Chile, Costa Rica, 

Uruguay, Argentina, and others. Argentina emerged from a period of extremely unstable government in 2001–2002 with democracy intact and the more stable government of Ne ́stor Kirchner. Although the President of Uruguay, Tabare ́ Va ́zquez, is 

on the left and made friendly gestures toward Cuba at his inauguration, he is committed to maintaining normal relations with the U.S. So while there are hotspots 

in Latin America, it would be a mistake to perceive crises in the entire region. 

Colombia’s multiple problems—the insurgencies of the FARC and ELN, the violent acts committed by the paramilitary AUC, and its central role in the international trafficking in cocaine, heroin, and marijuana—are mostly indirect results 

of its weak state. These activities took root in zones where the government had little 

presence, and the narcotrafficking now underwrites the violence of the left and the 

right and the corruption that pervades the state. President Alvaro Uribe has been 

correct to prioritize the strengthening of the state, especially the armed forces, and 

U.S. military assistance has been absolutely critical to the progress that has been 

made. Although Colombia continues to have the highest levels of violence and 

human rights abuse in the region, there were significant declines in 2004 in the 

numbers of political killings, terrorist massacres, kidnappings, and forced displacements. President Uribe faces two additional governance challenges: criticism of his 

amnesties for selected guerrillas and paramilitaries and legal challenges to a law 

permitting him to run for reelection in May 2006. Although Uribe is a valuable ally, 

the United States must resist the temptation to take sides in these disputes. With 

the highest approval rating in the Americas, President Uribe cannot be helped by 

a U.S. endorsement, and could be hurt. In the event that he loses, his successor 

would not be likely to diverge radically from the policies of such a popular president. 

Venezuela no longer deserves to be called a democracy for four reasons. First, the 

National Electoral Council has been stacked with supporters of President Hugo 

Cha ́vez Frı ́as, and its conduct during the August 2004 recall referendum raised serious questions about whether future national elections would be fair. Second, the 

government has intimidated independent and opposition groups such as Su ́mate and 

Primero Justicia by charging their leaders with treason, and there have been well 

documented incidents in which government supporters in the Bolivarian Circles 

have with impunity physically harrassed, and perhaps murdered, some opposition 

supporters. Third, the Law of Social Responsibility in Radio and Television signed 

in December 2004, which gives the government authority to penalize or close down 

media that act contrary to vaguely defined national security or incite the population 

to disrupt public order, has induced most newspapers and broadcasters to practice 

mild self-censorship. Finally, reports that thousands of signers of the recall petition 

were fired or persecuted in other ways have made many citizens more cautious 

about expressing their political opinions freely. Still, we must not exaggerate how 

undemocratic the Cha ́vez regime has become. It is far closer to democracy than totalitarian Cuba is. In the above respects, it is actually quite similar to the dominant-party regime that ruled Mexico for decades before about 1997. 

The Bush administration, like the Venezuelan opposition, has publicly pursued 

the short-term goal of removing Hugo Cha ́vez from power, whether by initially recognizing the junta that temporarily seized power unconstitutionally in April 2002, 

taking sides in the recall effort, or lobbying the O.A.S. to invoke the Democratic 

Charter. It is time to recognize that this policy failed: there is no question that 

Cha ́vez will remain in the presidency through the August 2006 election, and it is 

likely that he will have another term in office. At this point, continued efforts to 

end the Cha ́vez presidency in the short term are counterproductive, as they lend 

credence to Cha ́vez’s claims that the United States is seeking to overthrow him, assassinate him, or even invade the country. The more credible these claims become, 

the more effective they are in rallying nationalistic support for Cha ́vez in the military and in the civilian population. Cha ́vez has been very skillful in baiting the 

U.S., and the U.S. has too often taken the bait. We must hope that the incoming 

Assistant Secretary, Thomas Shannon, Jr., will be able to break this vicious cycle. 

Both the U.S. government and its friends in the Venezuelan opposition must now 

set their sights on the long-term goals of building a viable opposition that has coherent and appealing policy alternatives for the economic and social problems of Venezuela and strong but flexible organizations with deep roots in society. The United 

States has been pursuing this goal through the National Endowment for Democracy, 

the party institutes, and other programs. These efforts should continue and in fact 

become the centerpiece of our efforts to promote democracy in Venezuela. 

Bolivia is the country most likely to worsen politically in the near future. Its 

chronically weak state is beset by crippling road blockades and demonstrations by 

54

coca producers, students, teachers, and unions, in loose cooperation with radical indigenous groups and leftist intellectuals. Each group has its own demands—an end 

to coca eradication, the preservation of subsidies and benefits, the nationalization 

of utilities and hydrocarbon producers—but when one group initiates action, the others perceive an opportunity and join the fray. The principal instigator of these oftenviolent protests has been Evo Morales of the Movimiento al Socialismo. He is a populist champion of coca producers who is allied with, and probably materially aided 

by, Hugo Cha ́vez. These mass demonstrations—there have been hundreds in the 

last five years—forced the resignation of President Gonzalo Sa ́nchez de Lozada in 

2003 and his replacement, Carlos Mesa, in June 2005. Their demands also made 

it necessary to pass over the next two constitutional successors in favor of Interim 

President Eduardo Rodrı ́guez, whose main mission is to hold early national elections 

on December 4. This election is shaping up to be a close race that is sharply polarized between Evo Morales, who came in a close second in the 2002 election, and 

former Interim President Jorge Quiroga. Quiroga is the candidate most obviously 

friendly to the United States and to business interests. However, even if he wins 

the election, he will find it as hard to govern, and to stay in office, as his two predecessors did. If Morales wins, we can expect a government that will attempt to move 

sharply to the left, possibly nationalizing foreign gas companies and almost certainly ending coca eradication. However, it is possible that conservative business 

leaders in the eastern lowlands would attempt to secede, provoking a bloody internal war. There is little the U.S. can do at this point to prevent such a scenario, but 

the most constructive action would be to work with the Rio Group and the O.A.S. 

after the election in any attempt to mediate between the parties in conflict. 

Ecuador has a record of recent governmental instability that rivals Bolivia’s, but 

there is less reason to be concerned about either the breakdown of democracy or the 

rise of a hostile government. The Congress chose Alfredo Palacio to replace Lucio 

Gutie ́rrez as President during mass disturbances in April 2005 after declaring the 

presidency vacant—a questionable move, but one that will stick because it was endorsed by the military and Ecuador’s neighbors. President Palacio has laid out an 

ambitious agenda that includes as-yet unspecified constitutional reforms, the renegotiation of all oil contracts, and a reorientation of spending toward social programs. While these are dramatic moves, the president seems to be committed to 

pursuing them in ways that are consistent with the constitution and international 

laws and treaties. It is also reassuring that in August he replaced two ministers 

who had made overtures to the Cha ́vez government in Venezuela. Nevertheless, Ecuador remains a difficult country to govern. Governing coalitions shift constantly, 

and indigenous groups frequently mount road blockades. A well-coordinated mass 

protest against Occidental Petroleum in August shut down oil production and exports for a short time, but the Palacio government intervened and the matter was 

resolved in the protesters’ favor. National elections are scheduled for October 2006, 

but campaigns are not likely to take shape until after the constitutional referendum 

on December 11, 2005. 

Nicaragua is in the midst of a crisis of government that is being treated as a crisis of democracy itself. A bizarre pact between the Liberal Party and the FSLN has 

been working systematically to undermine President Enrique Bolan ̃ os through its 

control of the National Assembly. The two parties have already divided up control 

of the Supreme Court, the Comptroller General, and the electoral authority and 

passed constitutional reforms to weaken the executive branch. They also charged 

Bolan ̃ os with accepting illegal campaign contributions and were threatening to lift 

his immunity, which could have been equivalent to an impeachment. Nicaraguan 

authorities have not been able to resolve this dispute themselves, as the pact-controlled Supreme Court rules against Bolan ̃ os and he, citing a ruling of the Central 

American Court of Justice, refuses to obey. Regional actors—the United States and 

the O.A.S. ministers—have now backed Bolan ̃ os in this conflict, so the Liberals and 

Sandinistas have shifted their attack to the cabinet. It appears that President 

Bolan ̃ os will survive until the next election, in November 2006, but will hardly be 

able to govern. U.S. ambassadors have attempted to drive a wedge between the 

more moderate Sandinistas and Liberals, on the one hand, and their leaders, Daniel 

Ortega and Arnoldo Alema ́n Lacayo, respectively. This is a short-term solution. In 

the medium term, it is likely that the pact will fall apart naturally as the presidential election approaches. The remaining fear then (for the Bush administration) 

would be an Ortega victory next November; it seems more likely than not that the 

FSLN will win, as it emerged as the largest (but not majority) party in the November 2004 municipal elections. However, the pact has become so unpopular that Ortega cannot count on his party’s nomination. And realistically, it is inconceivable 

that an FSLN government could recreate the dominant-party regime that it led from 

1979 to 1990 or that it would be able to steer a hard course to the left. The strange 

55

bedfellows in Nicaraguan politics in recent years suggest that competition today is 

less concerned with ideology and policy than it is with dividing up the spoils of office 

among personal factions. 

Overall, the United States is today in an unusually weak bargaining position in 

Latin America. Many Latin American citizens are looking for alternatives to the 

free-market policies of the Washington consensus; they question the need for the invasion of Iraq; they see only limited value in the kind of free trade agreements the 

U.S. will agree to, when agreements are even possible; in many countries, although 

most citizens continue to value democracy in the abstract, large numbers are disillusioned with the actual parties, courts, legislatures, and presidents they have. U.S. 

support for democracy often rings hollow in the wake of our 2000 presidential election and the Bush administration’s initial endorsement of the April 2002 coup attempt in Venezuela. There are plenty of Latin American leaders and activists who 

continue to share U.S. ideals and welcome U.S. assistance, but in this environment, 

open association with the United States is a political liability for some of them. It 

would be wise to respect their sensibilities by taking a lower profile, working behind 

the scenes, multilaterally, using more aid and fewer threats and sanctions, offering 

more carrots and fewer sticks.

Mr. BURTON. Okay, Mr. Menendez, do you have questions for the 

panel? 

Mr. MENENDEZ. Thank you, Mr. Chairman. 

Mr. BURTON. Yes, would you please vacate the room as quickly 

as possible and if there is information that you want, could you 

take that out in the hall, please? And would you shut the door as 

you are leaving, so we do not have the noise from the hall? 

Mr. MENENDEZ. Thank you, Mr. Chairman. I want to thank you 

for at least considering the constraint of time here, bringing the 

panel up. There is a lot of expertise and a lot of talent here. I have 

been reading your testimony in the midst of the questions of others, so I have a little advantage of actually hearing or reading what 

you would say verbally. 

So I would like to basically pose this one question to all of you, 

and that would be, if you were the President of the United States 

and had a Congress that would basically support your will, what 

would you do? What are two or three major policy things that you 

would do as it relates to Latin America and the Caribbean that we 

are not doing right now? I am happy to start with whomever is 

willing to take on the question. Dr. Valenzuela? 

Mr. VALENZUELA. Thank you, Mr. Chairman, thank you for this 

opportunity. I think that Congressman Delahunt did put his finger 

on a serious, serious issue that we have and that is the sort of low 

credibility that the United States foreign policy has in the world 

generally and in the region as a whole. 

I have been stunned with the 30-some odd years that I have 

worked on the hemisphere at how much of a push back there is on 

U.S. policy in the region and it goes across the board. It goes from 

right to left and it goes, it is in the popular sector as well as in 

the upper sectors. It is a shame that this has happened, because 

after 9/11, in fact, there was a lot of solidarity with the United 

States. So, very concretely, three things that we need to really do. 

One is we need to re-engage with the region. And we need to reengage with the region, with the leaders of the region, and make 

them understand that we do care about the relationship with the 

region. Number two, we need to work the multilateral aspects of 

the relationship of the region much more effectively. And finally, 

number three, Mr. Chairman, this goes along, I subscribe completely with Senator Coleman’s points. We need to put some teeth 

56

into this effort in the region. In that regard, I think that the siphoning away of funds from the 150 Account, the siphoning away 

of funds from the ESF Account is just, you know, we complain that 

China is supporting some other sectors in the region. Where is the 

United States in terms of its support? 

Now obviously, our support is much greater, but we are not getting the kind of bang for the buck for it. I, for one, commend you 

for your efforts to try to get this social development fund going and 

I would hope that maybe this is something that the Administration 

and the Congress could work on. Thank you. 

Mr. MENENDEZ. Dr. Purcell? 

Ms. PURCELL. Thank you very much. In my paper, I talked about 

what I call the end to the era of military coups. I said we now are 

faced with something I call civilian coups. This is a process that results in the blockage and the no functioning of democratic governments in Latin America. It allows for getting rid of elected Presidents by encouraging masses in the streets, the threat of mass violence, etc. We have lost a lot of elected Presidents in the last couple 

of years in Latin America that way. 

I think these civilian coups are very dangerous. They may be a 

good thing in authoritarian regimes like what existed in Ukraine 

before the revolution, but they are not a good thing against democratically-elected regimes. So the thrust of what I recommend in 

terms of strengthening democratic political systems in Latin America is the following. 

I am a very strong supporter of free trade, but I think that there 

is a problem with the way that the Administration has been delivering its message, because it has been a pure free trade image. And 

it is almost like two ships passing in the night, because the debate 

in Latin America, between Latin America and the United States on 

free trade, is very polarized. 

I think the U.S. message on free trade has to start including the 

social component. In the recent poll that Mr. Delahunt was talking 

about regarding the most admired President, Ricardo Lagos placed 

first, which is interesting. He is a wonderful example of someone 

who has been able to combine a market economy with an impressive socially-conscious policy. I think that U.S. officials, elected and 

appointed, have to start pairing those two together and offering to 

work with and discuss with and consult with Latin American leaders on how to craft a more explicit social component into the free 

trade policy. The free trade policy is absolutely necessary for the 

economies to prosper, but without an explicit social component, the 

poor Latins are not going to sign on. 

The second thing I would do in the area of politics involved U.S. 

support for democracy. I think United States policy has been fairly 

successful in terms of cleaning up elections in Latin America, particularly at the national level, in most countries. I mean, Haiti is 

problematic. I agree there are other countries as well where it is 

problematic. But elections today have come a long way in terms of 

their credibility. I think now what we have to do is shift the focus 

of U.S. policy to strengthening political accountability. There are 

very few mechanisms that voters or people in Latin America have 

to hold their leaders accountable, whether we are talking about 

electoral districts that are too big and no one even knows who supVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6601 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
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posedly is representing them. Or people elected on party lists, 

where your place on the list is more important than what you yourself do or do not do. I would focus on accountability, including 

strengthening the rule of law. I know the U.S. Government has 

worked on both issues, but I think there is a shift of emphasis that 

needs to be done now, especially on the accountability side. 

Lastly, what several of you have mentioned, I think that we have 

to do something about the anti-Americanism in Latin America, because to the extent that there is raging anti-Americanism, whatever we seem to be pushing for is automatically regarded as not in 

Latin America’s interest or bad or people do not like it. We have 

a real problem here. United States relations with Latin America 

have been very difficult and even bad whenever the United States 

has been preoccupied with a global security threat. Whether we are 

talking about the Cold War or now, the War on Terror. Now it is 

even worse, because compounding the War on Terror is the fact 

that the Untied States is engaged in a war that was unilateral and 

pre-emptive. These two words in Latin America do not go over well 

for obvious historical reasons. The best period we have had with 

Latin American relations recently was under the Clinton Administration, partly because of Clinton, but really because the Cold War 

had ended and the Latins and we were talking economics, about 

mutual economic issues. 

I am not advocating giving up our right to act unilaterally or preemptively. I mean, I think we have to keep those rights. But I 

think we have to beef up the public diplomacy program. We have 

to explain better what we are doing and why and why it is in their 

interests as well as ours. And we have to engage more in explaining this. 

I do not think we should do what we have been doing with the 

Chavez Government, of which I am no great fan. I think he is an 

autocrat. But we get nowhere by trying to refute directly or take 

issue with what he is doing, because he then becomes this great 

nationalist hero who stands up against the United States bully. 

And he is protecting the poor Venezuelans. So that is a no-win policy for us. But we do need to explain patiently and well and 

articulately what we are doing and start taking the whole challenge of reducing anti-Americanism there seriously, within the 

boundaries that I have said are difficult ones while we are preoccupied with global security challenges. 

Mr. BURTON. Ambassador Daremblum, if you want to respond, 

and Dr. Coppedge? We are going to have to vacate the room in 

about 5 minutes, so I will let both of you respond and then we are 

going to have to call it a day. 

Mr. DAREMBLUM. Thank you, Mr. Chairman, and Members of the 

Committee, it is a pleasure to be here. I will be very brief. I think 

there is a consensus on the situation in the hemisphere, in Latin 

America, particularly on how poverty and inequality have generated a growing disappointment with democracy. 

The three main aspects in which I would concentrate would be, 

first, that there is a clamor for more engagement by the U.S. in the 

region. But engagement must have a content, must have a to-do 

list of what that engagement is going to generate. I think one, it 

is urgent and important to establish a true dialogue, to avoid lecVerDate Mar 21 2002 08:52 Apr 11, 2006 Jkt 000000 PO 00000 Frm 00061 Fmt 6633 Sfmt 6601 F:\WORK\109TH_~1\TEXT_F~1\23693.000 HINTREL1 PsN: SHIRL
58

turing and to have more engagement at the highest levels of democracy. The Secretary of State should meet more frequently on a 

periodic basis with her counterparts of the region. The same thing 

is true for the other members of the diplomatic apparatus. 

Second, deficit in public diplomacy concerning Latin America has 

to be remedied and very promptly. This is an area in which the 

United States should be very proactive and this is very important. 

Third, it needs to support and encourage and nurture bright spots 

of initiatives that have been pursued by some countries in Latin 

America, which could be expanded to the experience of other nations. I am referring to the success of programs in Poland, Armenia, in Brazil and Mexico, which provide monthly stipends to millions of poor families and they can send their children to school and 

have their health checked on a regular basis. This has the potential 

to break the poverty cycle over time. 

I also agree fully and I wish to reiterate that public diplomacy 

should not be restricted to the Middle East. There is now an unfriendly cast of characters in Latin America which is very opposed 

to the United States. And we need to create a campaign, really, for 

the hearts and minds of young Latin Americans. One item of this 

chapter is to increase dramatically the number of scholarships of 

Latin Americans studying here in the United States and increase 

substantially the visits of young people, high school students, 

young politicians here to the United States. I also would very much 

encourage more visits by young North Americans to Latin America. 

I think that the only way, really, to restrict the damaging effects 

of the hotspots in Latin America is to have a true Inter-American 

diplomacy and to lend a helping hand to key examples in education. Thank you, Mr. Chairman. 

Mr. BURTON. Thank you, Ambassador. Dr. Coppedge? 

Mr. COPPEDGE. I will be brief. 

Mr. BURTON. Can you push your mike——

Mr. COPPEDGE. Okay, on my checklist, I would put two and a 

half items. The first item would be increasing funding and I am not 

going to repeat what a lot of people have said. Increasing funding 

for the Millennium Challenge Account, for the IDB, which I notice 

has a substantial cut in the fiscal 2006 budget. Passing your idea 

for the Social Investment and Economic Development Fund, promoting trade, all those things are good. 

A second item on the list would be to look to the long term, to 

think about not so much what can be done right now to achieve 

some dramatic change in the short term and how democratic states 

are, but to invest in the long term. And, if necessary, waiting 25 

years, waiting a quarter of a century to see results, because often 

that is the time frame in which the United States can really have 

an impact without alienating people, without coming on like a 

strong man. 

And I think this is necessary because, you know, there are a lot 

of Latin American leaders and activists who continue to share the 

goals that we have for Latin America and they would welcome our 

assistance. But in the environment that a lot of people have described in this hearing today, open association with the United 

States has become a political liability. And it would be wise to respect the sensibilities of our partners in Latin America by taking 

59

a lower profile, working more behind the scenes, especially working 

multilaterally with the OAS and other regional actors. Using more 

aid and fewer threats and sanctions and offering more carrots and 

fewer sticks. 

My half recommendation at the end of the list would be a reorientation of policy on Venezuela. I do think it was a policy, whether 

official or not, of the United States Government to constitutionally 

or not, remove Chavez from power in Venezuela, at least before 

April 2002 and probably through August 2004. Since then, I am not 

so sure, although the United States has continued to pursue efforts 

to put some teeth into the Democratic Charter with special attention to Venezuela. But I think it is time to recognize that with respect to Venezuela, this policy failed. There is no question that 

Chavez will remain the President through August 2006 and it is 

likely that he will have another term in office. At this point, I think 

that continued efforts to end the Chavez Presidency in the short 

term would be counterproductive, because Chavez eats this up. It 

plays right into his hands, to be impatiently trying to find one way 

or another to remove him from office. Because he has been saying 

for years that the United States is trying to remove him, is trying 

to assassinate him, is planning to invade the country. And this is 

something that he uses to whip up nationalistic support. He likes 

to keep this on the agenda. He is baiting the United States and we 

tend to take the bait and give him this, and we should stop doing 

that. 

Instead, I think the United States government and its friends in 

the Venezuelan opposition should set their sights on long-term 

goals of building a viable opposition, one that has coherent policy 

prescriptions for dealing with the long-standing poverty and inequities in Venezuelan society and an opposition that has political parties that are strong institutions with deep roots in societies and 

that can do an effective job of representing the real concerns of the 

majority of Venezuelans today. And if the United States can get behind those efforts at party building and developing new programs 

that they can stand for, then I think we will be friends and the opposition will win support and that will be in the best interest of 

Venezuela in the long term and in the best interest of Venezuela 

and democracy. 

Mr. DELAHUNT. Mr. Chairman? Now that Mr. Gilman is here, he 

can take the Chair. 

Mr. BURTON. Mr. Gilman is no longer a Member, but he was one 

of our great Chairmen and it is always nice to see you, Ben. Thank 

you. Let me just thank the panel for your testimony. I really apologize once again for the shortness. If you will submit your statements for the record and be amenable to answer questions, we will 

send questions to you and we will have you back again when we 

have our next hearing on this subject. 

Mr. PAYNE. Mr. Chairman, if you will just take a second and ask, 

if you would also put in, as you know, there is Article 98 on the 

ICC. We have taken aid away from Central and South America and 

now it is even HIV and AIDS money because they will not sign Article 98 of the ICC. And I wonder if we are suffering from not having these people come through the way you should do it. I think 

that is another thing that is just unbelievable when you talk about 

60

the image, certainly has a lot to do with the negative image. It is 

just not twisting your arm, just breaking your arm. Thank you. 

Mr. BURTON. If you could answer that question for Don in writing, I would really appreciate it. And I am sorry about the time 

constraints. Thank you very much, we stand adjourned. 

[Whereupon, at 3:55 p.m., the Subcommittee was adjourned.]

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