MANANA IN LATIN AMERICA.

Author:MATATHIA, IRA
 
FREE EXCERPT

Two futurists tell you what's next.

WHY DOES LATIN AMERICA CONTINUE TO lag so far behind its neighbor to the north in economic development? Discovery of both parts of the New World dates to the same year, 1492, and Latin America was a lot quicker off the starting blocks. Within 50 years of Columbus's arrival, all of the current capitals had been founded. European settlement of North America didn't even begin for another century.

Latin American countries carry considerable legacies from the earliest days of colonization. This has blessed the region with cultural riches, enormous pride, and a strong sense of identity. But it has also burdened it with traditions that have made it difficult to adapt to the modern world.

Rapid globalization in recent years has started to break down these historical traits. The reward, apart from the greater good of the region's 410 million inhabitants, will be to find a "Latin way" to prove to the world (and themselves) that they can be as modern and as successful as other peoples--without losing their Latinity, the soul that defines their identity.

Change can be daunting, even for countries that have successfully embraced and managed it smoothly in the past. The region's citizens must not only embrace change, they must take advantage of emerging trends if they wish to become major players in the global marketplace in the 21st century. We have coined the term "Nexts" to describe the key trends that will shape life in the future. Understanding the region's "Nexts" can help Latin Americans as their region comes of age.

Consider the following Nexts:

DESPERATELY SEEKING SECURITY

For all its advances in economic stability and democracy, Latin America is facing an uphill struggle with two related and corrosive issues--drugs and violence. The level of violence is so extreme it shaves 2.1% off the region's Gross Domestic Product annually. A 1999 report from non-government organization Mexico United Against Crime proclaims Mexico City as one the 10 most violent cities worldwide, with 800 crimes and three murders a day. Nations with similar rates are usually engaged in civil war.

WHAT'S NEXT The "Pit Bull" Generation

Reared in an atmosphere of violence and unemployment, today's youth are perpetuating the violence, on the streets and, increasingly, in schools. And this trend is being played out in cities across the continent. For example, in Rio de Janeiro a teen is twice as likely to be murdered as in Bogota (long considered the most violent city in Latin America).

EDUCATION, POR FAVOR

One of Latin America's greatest natural resources is its young people. Birth rates are as much as double those in Europe, and the proportion of youth under age 15 is 30% or more, far outnumbering the elders. In the more "European" countries of the south--Chile and Argentina--the ratios of under-15s to over-65s are around 4:1 and 3:1, respectively, while other countries run between 6:1 and 8:1, compared with less than 2:1 in the United States.

This is great news for pension planners: Latin America has plenty of youngsters to provide for the old folk.

Education, however, is a crucial issue. Today children in Latin America go to school an average of just five years. With unskilled and manual work being automated, the governments of Latin America face the immediate priority of educating their teeming masses of youngsters if they want to offer a real alternative to the fast-developing economies of the Asia-Pacific region.

WHAT'S NEXT "New School" Houses Rock

Don't expect massive spending boosts. Governments just don't have the cash.

In Colombia, New Schools, in which older students tutor younger children, are compensating for a shortage of qualified teachers. There are currently 17,000 New Schools in the country and these schools enjoy more support from parents and local businesses than do the nation's public schools. Look for other creative stop-gaps.

THE HOLY GRAIL OF REFORM

Until recently, rampant inflation and boom-and-bust economic cycles made chronic uncertainty a daily hazard for Latin American businesses. Much of the progress in Latin America today can be attributed to economic reform.

The fruit of ongoing privatizations will bring great changes. Consider this: In 1989, when the average Argentine requested a phone from the state-owned service, the average wait for installation was 10 years. Today, after privatization, the phone company responds in 48 hours. Free-market thinking will also change people's mindset: from the paternalistic overseer inherent in the Spanish colonial legacy to entrepreneurship and the benefits of competition.

Such shifts are subtle, and so far, privatization hasn't significantly improved the daily lives of the majority of Latin Americans. Wealth is still concentrated in the hands of the few. In Argentina--one of the most stable countries--unemployment hovers around 14.5%, almost twice as high as it was in 1990. But most experts believe that privatization is already having a far-reaching impact on the young, who for the first time have an almost unfettered thirst for consumer goods.

WHAT'S NEXT Privatization Payback--Small Is the New Big

While it is too soon to foretell the final outcome of reform, free-market thinking could become contagious, leading to a burgeoning entrepreneurial class...

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