The political transition to multi-party government will continue to bear watching as Mexico approaches presidential elections in 2000. The task force agreed that any opening of Mexico's energy sector will be by the back door and that it will be politically impossible to privatize Pemex or openly encourage foreign competition. The task force agreed that during the next several years political and economic challenges to Latin American governments could lead in the direction of the worst case scenario. Most agreed that muddling through was the more likely outcome. In the worse case scenario continued turmoil in the world's financial markets could undermine the region's still fragile democracy.
Polls already show that opinion about democracy is mixed at best.
The public is unsure whether it makes any difference in their lives and it is questionable whether the majority feels it has a vested interest in the governing system. In this scenario, Colonel Chavez wins this year's presidential election in Venezuela and carries through on his suggestions that the country should stop making payments on its foreign debt. Venezuela's default quickly spreads throughout the hemisphere. The resulting disaster dwarfs the regional debt crisis that plagued dozens of Latin American countries into recession in 1981 and took more than a decade to unsnarl. The prospects that Latin America could not pay its external debts would also impede any further U.S. action to help the area.