ANNUAL REPORT ON LATIN AMERICA AND THE CARIBBEAN (2013-2014)Fecha：2016/08/15 Autor：
On March 5, 2014, Chinese Premier Li Keqiang, delivered the new cabinet work report at the Second Session of the Twelfth National People’s Congress. Based on the wisdom and consensus of all consulted parties, it draws a basic blueprint of the country’s economic development and social governance for the next few years, in which six major reform priorities including an in-depth and new-type urbanization were highlighted. Such new policy messages triggered intensive concerns both in China and around the globe.
Henry M. Paulson, Chairman of the Paulson Institute at the University of Chicago and former U.S. Secretary of the Treasury, observed shortly before Li’s report that“Urbanization is both at the heart of China’s future growth and prosperity and posing a vexing challenge”, “Therefore, moving more labor from farms into cities can increase productivity and domestic consumption, helping China to rebalance its econom If done well, urbanization has the potential to expand prosperity in China and create significant consumer markets for other economies around the world, while limiting its environmental impact”.
Urbanization is an accompanying phenomenon of modern industrial development process. It is not just an important symbol of demographic movement of the modern ages that large numbers of people move into cities to live, produce, and live together, but also the inevitable trend of social evolution in the meantime. However, throughout the history of human development, various countries and regions in the process of urbanization experienced ignorance, disorder, far longer than rational and orderl Until the 18th century, the revived urbanization process in Europe as a result of the first industrial revolution brought prosperity, at the same time, infesting with a large number of social problems such as cramped and filthy living quarters, disordered management and crime. French historian Fernand Braudel noted that before the 19th century, the mortality rate was much higher than its birth rate. In Latin America, the development was in a chaotic and painful manner. Not until the early 1900s did Mexico’s population reached the level before the Spanish conquest. New immigrants had to give up “their homesickness” and traditional moral constraints, “sharpen your knives, do not trust anyone, do not hesitate, do not bargain, do not even look to see”became their Right Way for the Survival in a metropolis.
Today, the urbanization of emerging economies and developing countries is no longer constrained by sluggish population growth. In contrast, the pace of urban construction cannot catch up with the urbanization of population. So cities cannot provide enough employment and necessary living conditions for residents. Rural immigrants failed to achieve appropriate career and identity conversion after their migration. It caused serious “urban disease” that deeply affected governments. Take Beijing, the Chinese capital, as an example. Its annual increase of population was about 600,000. Currently, the urban residents are nearing 20 million, which is well beyond the target line of limiting the population to 18 million by 2020.The oversized population made Beijing susceptible to“urban diseases”featured mainly by traffic jams, housing shortage, high difficulty of meeting the energy resource demand, heavy pollution of the air and water. The above-mentioned problems have made the city increasingly uninhabitable. At the end of the year, the 2012 China New Urbanization Report released by Chinese Academy of Social Sciences shows that in 2011the urbanization rate of the Mainland China exceeds 50%for the first time to reach 51.3 percent. It means that China’s urban population has exceeded the number of rural dwellers for the first time. The urbanization of China has entered a critical stage. It is within this context that the newly established Chinese administration proposed to develop“new type of urbanization”in the above-mentioned report in order to avoid “excessive urbanization”.
Obviously, there is notable difference between the “new” urbanization and the “old” one. The new urbanization need not only conform to the natural tendency of production and subsistence in the region or between regions according to market trends and developing law, but also require management authorities of all types and levels to make systematic responses and arrangements in economic, social and institutional aspects, in order to ensure diversified development interests and needs of different populations. The“new”and“old”represent two different views of development and civilization orientation as well. A major difference is whether“the urbanization of person”is regarded as the core, so as to realize smooth transformation of rural population’s modes of production and life, homogeneity of urban and rural population’s social rights, including equal exchange of urban-rural elements.
“To break with the old” is an important prerequisite to “establish the new”. Only if we fully understand the “old”, learn from experience and lessons from the old model of urbanization, can we stand on the shoulders of our predecessors to take a broad view at the whole world and open a new path. Therefore, the 2014 edition presents a special report entitled “After Achieving an Urbanization Rate of 50%: Economic, Social and Political Transformations in Latin America” written by a scholar from the Institute of Latin American Studies, CASS.
At the end of 19th century, the major countries in Latin America became involved in the tide of modernization. In the 1930s, the urbanization process started. In the next the region witnessed an accelerated urbanization process. According to State of Latin American and the Caribbean Cities 2012: Towards a New Urban Transition released by UN-HABITAT on August 2012, 80 percent of the population in Latin America lives in cities. The urbanization level is even higher than many developed countries. But unfortunately, many cities in Latin America, especially metropolis witnessed excessive population growth without significant margin improvement of employment opportunities and living conditions, resulting in a kind of morbidity that ultimately jeopardized the healthy development of economy and societ
——Public infrastructure failed to meet popular demand. A considerable part of rural immigrants was forced to solve housing through informal channels due to overemphasis on the homeownership rate. Regional governments didn’t take actions to provide people with public houses. It resulted in excessive “informal housing”. Nowadays slums are still widespread in regional cities.
——There were excessive informal employment. Cities failed to provide sufficient employment for increased urban population. The labor force transferred from rural to urban areas has to flow to the informal sector. Compared with the formal employment sector, employment needs, jobs, income level of informal employment sector is not clear, making it difficult for employees to produce good expectation.
——Informal employment directly led to lower coverage of social security system, whichmeans “secondary distribution” system, a symbol of social justice, was seriously lagging behind and a lot of labor force were kept from the social security system due to failure to obtain the development bonus from the urbanization.
——The poverty rate continued to be high. In the 1980s and 1990s, the impoverishment rate in Latin America was above 40%. Since 2003, thanks to strong economic growth in Latin America, the poverty rate continued to decline and fell to 32% in 2010. Even so, Latin America remains one of the regions in the world with the highest poverty rate. Up till now, one third of the population in the region still lives below the poverty line.
——Insecurity, directly related to the above mentioned phenomenon, became a deeply rooted social problem. Informal housing in some regional countries became the major reason causing violence, drug abuse and trafficking.
“The city is a bridgehead between the country’s land and the world economy, an irreplaceable engine of economic growth…Different cities are connected together by many tangible (telecommunications and transport networks) and intangible (the relation of politics, economy, culture to science) networks. It is these chances to become rich that constantly attract people to pour into the cit” However, why did such a high urbanization rate fail to bring such a beautiful picture in Latin America, but caused widespread dislocation? The special report answers the question by providing readers with a new analytical framework, in which the absence of a systematic policy or mismatch was supposed to cause the transformation of economy, society and politics in Latin America lagging behind. This analytical framework can further help people have a more comprehensive and deeper understanding about the main reasons why most of regional countries continued to hover in the middle-income level.
This analysis framework also has the advantages of being concise and easy to remember. It, centers on urbanization issues, guiding readers to grasp the fundamental starting point of observation and understanding of “Latin American phenomenon” in general.
First, there are often tense contradictions between the state and the societ A large number of labor force were in a state of informal employment after moving into cities and lived in private-built houses. Their profession and private lives kept out by government planning. They were excluded from the social security system and failed to enjoy equal rights to have public service like other groups in the cit With ever-increasing sense of exclusion, their degree of national identity is far lower than the pursuit of their independence and autonom Thus, it is more likely for them to have friction and confrontation with national governance due to helpless psychological environment.
Second, poor living and working conditions pose a challenge to rural immigrants to be integrated into city life. A large number of new immigrants living in shantytowns and slums failed to integrate them into diverse urban community relations, but continued to rely on bloody ties, gang and other traditional asylum system to survive. At the same time, people with informal and formal employment lived in different communities. So multifarious organizations, such as labor unions, trade associations, non-governmental organizations, and political parties, extended to different members through professional relationships to form their own organizational basis, and to some extent, to provide benefits for them, leading to the blockage of social flow and existence of the original identit
Third, three social stratum constitutes a “pyramid” of contemporary Latin America societ People with informal employment are at the bottom of the tower who has unstable income and fewer opportunities to flow upward for a variety of conditions. The middle sector is with higher and more stable income, enjoying the public services. The elites, at the top of the pyramid, are the high-income class and control most of economic and political resources.
Fourth, the phenomenon of four-dimension economy constituted by rural economy, foreign economic, urban formal and informal economy came into being during the process of urbanization in Latin America. Under multiple pressures of land allocation and possessive system, industry competition dominated by technology, market and foreign capital, it is difficult for a large part of agricultural population to gain an access to rural and urban formal employment sector. They are only engaged in economic activities beyond the scope of the jurisdiction of the laws, regulations, thus forming and supporting the unique position of informal employment sector in the national econom
Fifth, five trends continue to develop in parallel with urbanization. As the author concludes, “A pair of contradictions” is related to the development process in the region; “two social relations”, “three social classes”, and “four economic sectors” are referred to social, economic structure. The economic internationalization, group benefit, social stratification, political elitism, and socialization of the government are their form of expression.
This analysis framework can also be applied to the assessment of the annual political, economic and social situations in Latin America. The“Political Developments in the LAC Region”reviews general or mid-term elections in some Latin American countries in 2013, aimed at showing regional political trends. Although the radical left-wing forces were faced with obvious challenges and setbacks, the existing change is still not enough to break the balance of regional political ecolog The Latin American left still has the potential to develop because many regional countries are still facing the task of conducting profound social changes, high degree of inequitable distribution, and a large percentage of people who are poor and strongly dissatisfied with serious social exclusion and marginalization, which is in a urgent need to be changed. They are more likely to accept policy in favor of left-wing parties so that the latter has a wide range of social foundation and strong appeal. However, no matter who are in office, left-wing or right-wing, whether it is to control the more developed economies such as Chile, or guide the large developing countries in Latin America, such as Brazil, Mexico, the ruling environment throughout Latin America became more complex, more difficult to govern with the pressure to change overwhelming, which is embodied in the slowdown of economic growth, the rebound of extreme poverty with lower public tolerance. Therefore, Latin American countries have to start with promoting economic growth, employment and boosting competing capabilities to allow for wider range of equitable distribution and social security, and accelerate the publicity and transparency of governmental affairs, accountability and anti-corruption process to achieve democratic governance.
In 2013 the economic situation of Latin America continued to present dual characteristics of slow growth and unhealthy structure. It is closely associated with depressed global economy, the coexistence of deflation and inflation between developed economies and emerging ones, and the deterioration of exterior economical condition. However, the main reason undoubtedly lies in that there are long-existed structural imbalances in Latin America, which has not been improved much. First, the external economic dependence is still strong, which causes the region to be affected by external economic fluctuations. Second, the economic and industrial system is still under-developed. Since the 1990s, the reverse trend of industrialization has swept across in countries like Brazil and Mexico to varying degrees. The sector of primary products, boosted by rising international market prices, gained a rapid growth, while labor-intensive manufacturing which absorbed more labor and quickly and effectively improved people’s livelihood got a limited development. The intrinsic motivation of economic development and competitive strength were negatively affected by inadequate guide of national strategy, industrial system not yet formed, too much missing link, incomplete supporting of domestic industry with management operations and technology not enough. Third, protectionism continued to prevail impairing the increase of competitive strength. Facing the current complicated and changeable pattern of the global economy, all countries were developing approaches to take measures accordingl Due to the lack of labor market flexibility, limited industrial competitiveness, deeply rooted populist ideological trend, and the function of electoral politics, trade and investment protectionism were common, with which competitive power formed the correlation of each other’s essential prerequisites. Fourth, the production relationships like politics and society still restricted the release of its economic potential and domestic demand. Social inequality problem shackles inclusive growth model for a long time, thus domestic demand cannot be fully expanded. Fifth, foreign openness was still insufficient and the regional cooperation moved slowly that made the countries in the region hard to achieve sustainable growth with the help of the convenient and free surrounding market environment that offered scale econom
In 2013,Latin American countries witnessed the contraction of social investment due to sluggish economic growth and weaker revenues, the various social indicators declined significantl The entire region’s poverty rate continued to fall, but at a smaller rate, and the decline of extreme poverty rate was reversed with a slight rise. In the field of labor market, slowing economic growth has weakened job-creating ability, resulting in a limited fall of unemployment rate in 2013. The income distribution of the region got an improvement, but it is worth noting that the income concentration of the individual country has increased. Under the above-mentioned background, there was a rise of social unrest in the region. Public protests occurred in some countries like Brazil, Argentina, Chile, and Venezuela as a result of discontent over public services such as education and medical care, corruption, public safety, higher pay, and better laboring condition. This round of economic growth cycle in Latin America is near the end, so the social risks of Latin American countries in 2014 are widely predicted to rise significantl
The change of the domestic economic situation forced regional countries to speed up the adjustment of foreign relations, boosting the role of economic diplomacy and multilateralism. The regional powers such as Brazil and Mexico accelerated dialogue with important economies like China, the United States, the EU, Japan, India, and Russia. At the same time, they danced trippingly within the framework of the BRIC countries, Mercosur, Trans-Pacific Partnership Agreement, and Transatlantic Trade and Investment Partnership, North American Free Trade Agreement, showing the active international cooperation orientation. Five Central American countries reached a free trade agreement with Mexico, while the member states of the Caribbean Community showed a clear attitude towards the common development goals and policy priorities, exploring possible paths for improving the efficiency and focus of international assistance to the organization. After more than a year of development, the Pacific Alliance, comprised of Chile, Peru, Colombia, and Mexico, achieve a progress in promoting free flow of goods, capital, personnel and services. At present, zero tariffs has been achieved for 92 percent trade in goods and services between the member states, and the remaining 8 percent tariffs on goods is expected to be exempted in the short or intermediate term. Meanwhile, the spillover effect of alliance began to emerge. Costa Rica and Panama were approved to be candidate member states. There are 25 observer countries including the United States and China.
In 2013, the Chinese-Latin America relations entered into an important period of adjustment. There are three highlight reports presenting that the adjustment and transformation of the relations, their multiple backgrounds. With the expansion of mutually beneficial cooperation, the development of the overall cooperation between China and Latin America not only conforms to interests and wishes of the both sides, but also an inevitable choice for the two sides to strengthen their strategic cooperation. In September 2013, China and the CELAC (Community of Latin American and Caribbean States)“enlarged Troika”Foreign Ministers reached a consensus on making substantial progress as soon as possible in promoting China-Latin America overall cooperation. Subsequently, the two sides discussed the establishment of China-Latin America overall cooperation mechanism, in which China-Latin America Forum acted as the core. At the same time, the multidisciplinary cooperation mechanism between China and relevant countries made great progress. The dialogue concerning politics, diplomacy, science and technology, culture, and education was more frequent, which not only promoted the traditional economic and trade cooperation, but also largely improved the status and role of other areas in China-Latin American relations. In the future, China-Latin America relations are expected to achieve a more balanced and sustainable development. Even in the field of economy and trade, both sides faced common challenges in the economic cycle, the transformation of trade and investment structure, and the change of external environment. Therefore, the economic and trade cooperation in the future need reasonable planning and rebalancing. To this end, the authors put forward the three key tasks which can represent the future direction of economic and trade cooperation, namely, the deeply involved industrial upgrading in Latin America on the basis of financing services for large projects, the infrastructure cooperation guided by the large equipment export, technology and financial services, promoting technical cooperation between China and Latin America, and even the industrial docking through more economic assistance.
The 2014 edition presents a chapter analyzing four regional organizations including the CELAC, the Pacific Alliance, the Southern Common Market and the Bolivarian Alliance for the Peoples of Our America. The CELAC is a product of political development in the region. With the consolidation of democratic institutions and the stability of macroeconomic policy in most countries over the last ten years, especially the export-led economic growth and increase of social investment, Latin American countries have enhanced their capability and confidence. The center-left forces kept growing and took office in some countries that obviously altered the political landscape of Latin America. International financial institutions increasingly losing their influence and the hemispheric economic integration plan promoted by the United States fell into stagnation. Increasing independence of the region and U.S.“benign neglect”of the region made the both sides away from each other. Latin American countries, driven by the above-mentioned motivation, have long expected to integrate cooperation mechanism at the sub-regional level in order to establish an economic and political union covering the whole region. The author reviews the growth record of the organization in 2013, stressing its role in promoting the regional unity and political, economic, social and cultural integration, as well as taking specific steps in the establishment of permanent dialogue between 33 member states and coordination mechanism under the multilateral framework. It includes not only the collaboration in the area concerning many policy goals such as the elimination of hunger and food security, the fiscal and financial cooperation, the exploitation and efficient use of energy resources, as well as the drug-related crime and regional security, but also the efforts and progress they made in the joint response to the international crises, reflecting and achieve regional interests and concerns in the international organizations and global agenda, as well as beginning dialogue with the forces outside the area such as the United States, Europe, and the Asia-Pacific region. The author points out, from the ideal of the 19th century to the new alliance in the 21st century, the Latin American and Caribbean countries have devoted a long time exploring the way for self-development by uniting. But the overall progress is not yet satisfactory, the diversity of each member’s interests and aspirations, and how to effectively achieve mutual coordination remain enormous challenges facing the integration process in the area. As a result, it will be undoubtedly a long term and arduous significant mission whether the Community of Latin American and Caribbean States can eventually stand out and become the leader of this process.
Derecho reservado: Instituto de América Latina，Academia de China de Ciencias Sociales.
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