Latin America: Perspective from Peru on Politics and Economics | Battlegrounds w/ H.R. McMaster

America and other free and open societies face crucial challenges and opportunities abroad that affect security and prosperity at home this is a series of conversations with guests who bring deep understanding of today's Battlegrounds and creative ideas about how to compete overcome challenges capitalize on opportunities and secure a better future I am HR McMaster this is battlegrounds [Music] on today's episode of Battlegrounds our focus is on Peru a prominent South American country and strategic partner of the United States Our Guest is Dr Julio Guzman the founder of Peru's Centrist partido Morado or the purple party Dr Guzman began his career as an economist at the intra-american Development Bank in Washington D.C and taught at Georgetown University and the University of Maryland in 2011 he served as Peru's Deputy minister of Labor the following year Dr Guzman became the Secretary General of the office of the Prime Minister Dr Guzman was a Peruvian presidential candidate in 2016 and 2021 he holds a PhD in economics from the University of Maryland ancient Americans migrated to Norte Chico roughly 5 000 years ago and formed the oldest known civilization in the Americas the ancient Peruvian Inca civilization was the largest Empire in the Western Hemisphere from the 13th to the 16th century CE Inca rulers subjugated and relocated populations to Agricultural and Military hot spots in order to fuel the Empire's economy and solidify their rule Spanish conquistadors arrived in Peru in 1526 when a protracted Civil War had weakened the Inca Empire's defenses led by Francisco Pizarro the Spaniards took the Victorious Inca King atawalpa hostage the Spaniards executed Ottawa on trumped-up charges despite accepting a ransom for his release and chose a new king Pizarro allied with enemies of the Incas marched South and occupied the Inca capital of Cusco the Spaniards plundered Peru's economy and said hordes of Peru's Gold Silver and valuable Goods back to Spain Conquest was protracted and Peruvian Viceroy Francisco de Toledo finally established an uneasy piece in the 1570s Toledo adopted indigenous institutions to impose forced labor to fund the Spanish Empire's exploits through the 18th century the vicer royalty of Peru included much of South America reforms in the 18th century divided the territories into the viceroyalties of Peru new Granada and Rio de La Plata peruvians declared independence in 1821 and achieved complete Independence in 1824 under Simon Bolivar the president of grand Colombia who became dictator of Peru until 1826. the struggle for territorial Integrity lasted decades in 1866 Peru defeated Spain in a war over the chincha islands the victory bolstered Peruvian national pride and unity pru improved its infrastructure and modernized its economy across the subsequent Century Peru experienced territorial losses and gains including a loss in the 1879 to 1883 Pacific War with Chile and again following its 1941 border war with Ecuador the United States established diplomatic relations with Peru in 1827. today the U.S and Peru partner over shared interests including democracy security mutually beneficial trade and human rights despite positive political reforms in the 20th century close to 15 successful and 10 unsuccessful coups resulted in an often unstable political military and economic atmosphere the century ended with conflict under President fujimori who initiated a self-coo that dissolved the Peruvian Congress Peru continues to face significant challenges to its democratic values in December of 2022 former president Pedro Castillo attempted a self-coo to dissolve Peru's legislature and announce an emergency government ahead of a vote to impeach him Peruvian authorities ousted and arrested Castillo and violent protests erupted governments across the Americas remain divided over their support for Castillo or the current president dinabeluarte we welcome Dr Guzman to discuss Peruvian politics increasing Chinese influence in Latin America and political security and economic Trends in the region Dr Julio Guzman bienvenido welcome to Battlegrounds it's great to have you on to talk about a really important subject thank you so much thank you so much for having me here thank you for it's time for University Hoover Institute Institution and you General thank you so much well we couldn't have anybody better with us to talk about Peru and and uh and the Western Hemisphere broadly all of Latin America and as you know I I love Peru my experience there was tremendous I was a an exchange Cadet at the Academia militaryos in in Lima and had the opportunity to travel to Aliquippa to Cusco to aquitos and I saw that this beautiful country of desert mountains Coastline and the Amazon region and uh and of course you know I was there a long time ago in the uh in the early 1980s and and it was a really pivotal moment for Peru it was uh it was in the midst of an Insurgency a calorie Insurgency against cedaro luminoso uh the Soviet presence was leaving wherever we visited we saw Soviet uh soldiers and advisors trying to hide from us uh and and there was a big shift going on in terms of much better relations with the United States and and and uh and so I wondered if you might just share some history with us you know the history of from that period through what's been a pretty turbulent time you know of of uh presidents accused and convicted of corruption and and now the social unrest and polarization uh could you could you kind of explain to our viewers your view of of of recent Peruvian history of course uh first of all I'm very glad that you like Peru it means like you have a very good taste of my country yes has an amazing history and of course uh a lot of uh diversity Geographic diversity cultural Indica it's a beautiful country but as you said it has many challenges and just to put it in one idea I believe that the difference between the 70s and the 80s and now in Peru it's not about the structural uh problems the structural problems are still there which is inequalities lack of opportunities discrimination racism and all those kinds of things that are really structural I believe that the difference now are because of two factors the first one is that the world has changed and has uh affected the economy the country and the region in general but the second one is that we as peruvians has lacked of political reform and electoral reform that is something that we can talk about later but uh but I believe there are these two factors the world that has changed and also a series of reforms that uh that we were not able to uh to what they do we you know our our viewers uh our viewers heard and saw in in the opening uh about uh Pedro Castillo's you know self-coo and so that that would bring us to the present and and seems to be maybe a manifestation of this lack of of political reform and yeah I think it was a poll in December where 44 of peruvians supported this kind of self-coole the effort to you know the the you know the the effort to dissolve the legislature despite it being unconstitutional so could you kind of explain the Dynamics in Peru today maybe as as the result of what you what you've already cited as a lack of political reform yes well first uh I think that analyzing Pedro Castillo former government uh is not going to give us a holistic look about what's going on in Peru um I believe that Castillo is just a manifestation it's a manifestation of uh many changes that has interacted over these last two decades and I will say that Castillo is the result in the outcome of the combination of external factors and internal factors in Peru the external factors are those uh structural changes like technological change globalization that has made people wonder what's going to be the future I mean I don't have even my job secure I don't have my my way of life have changed the communication the the way I'm living the day by day has changed because of technological change but also globalization that has even created more inequality so first we don't need to lose this external factors that has affected the whole world and also call it because Coit was deep down kovid was an emotional shock aside from being a pandemic was an emotional shock to people telling them you are very vulnerable and because of that conditions my impression is that most people in the world unparticularly in the developing World they have been thinking their lives in a different way they want different things and their priorities has changed and when the priorities of people change then political preferences change also and finally in the external side I believe that also that the United States has contributed with this uh a problem because the United States has abandoned multilateralism and the United States used to be the top defender of democracy in in the world so first the external factors and then the internal factors in Peru are first of all huge inequalities incredible I will I will uh point it out that Peru is one of the most unequal countries in the world is one of the 20 most unequal countries in the world uh aside from that we have that in Peru we don't have a strong political institutions uh in putting in a very simple way we don't have a strong political parties we don't have uh uh people who really take politics very seriously and in addition to that we don't have political reform and electoral reform what it means political reform means that it's very important to give a stability to the guy who who is administrating the power in this case the president in Peru the balance of power is not very well defined in the Constitution uh examples of that is that Congress can take out the president in a couple of days why because in the Constitution there is not single explanation of what are the reasons why you can take out a Precision in Peru so what I'm telling you is that it is if Congress oppose the president is very easy for the Congress to create this political instability another example that is really weird that happened in Peru is that once the president is elected when the president create the the year it's a cabinet he to go to Congress to get the approval of the whole cabinet to go over which is uh very contradictory because we are living in a presidential political system um and in terms of electoral risk forms we have incentives for uh people that coming from illegal activities and people who are looking for money and investing in politics uh get involved in the in the whole process um just to clarify one thing most people ask me but if the Constitution comes from the beginning of the of the 90s and it's exactly the same as now why didn't happen in the past and now it's happening with Castillo well my reaction to that is first of all none of the presence with the exclusion of fujimori that was a dictator none of them were able to govern the country for what for the same reasons because a president under that Constitution Dune cannot display the power in order to make reform and to be isolated from political and noise so first of all I want to remember that all these type non-pressing has the ability to do it and but the difference with Castillo the difference with the with Castillo is political polarization a political fragmentation what I'm saying is that uh this is the first time in Peruvian recent history in which six consecutive presidents did not have a number of congressmen in Congress who can protect them from this instability right and that's a very it's a key point the last six presidents in Peru did not have enough protection in Congress I mean number of congressmen who can protect them in the 90s and the early 2000s yes that happened at least so you have this like we do in the United States I would say to a certain extent this need for important reform and and a a a political uh situation this fragmentation that you described that that is preventing any kind of Reform from happening and it seems that maybe what I would anticipate is your disappointment in in these uh in this situation is shared kind of across the region I know that you're you're soon going to give a talk at the at the Latin American Political Science Association in Vancouver about the degree to which Peru maybe represents as representative of other problems across across the region across uh Latin America now could you maybe talk about that and maybe describe for our viewers what so we're calling this sort of pink wave of of socialist movements maybe socialist authoritarianism I mean I'm thinking of of uh of course of course what's what happened in Chile uh in terms of the effort to rewrite the Constitution which which failed under the board government um in September of of last year I'm thinking of Colombia which has a we're president Petro around with the message of politics of love to move Colombia toward peace uh but is also now consolidating some power with institutions in a way that is much more milder but but uh but replicates a little bit what president Lopez Lopez over the door is doing uh in Mexico for example so uh we have Lula de Silva in in Brazil now so there's been a movement maybe to the far left um it seems to be a trend in the region so could could you maybe just explain what you're going to tell uh your your colleagues at the at the conference coming up in Vancouver about the region more broadly yes I I think as a Peruvian I'm very interested of what's going on in Peru but from uh more ample perspective I believe that Peru it's just an example of what could happen in the whole Latin American region in the next years what I just said about Castillo is that the political cows that was created was the combination of a mess in in international context and also very difficult conditions internally when those conditions are not affordable you have an explosion and and that's exactly what is going to happen in Latin America in political evidence show that the countries that has been able to confront these external changes are the ones that has a strong institutions and rules that are respected what is going to happen in the next years I believe is that this political instability is going to spread in the region because the regions share exactly the same conditions I'm gonna go deep in this in this point what are the consequences of a person like Castillo because for me it's just a manifestation it's political chaos which means total improvisation no plan of government no ideology I'm gonna even explain why I think that way no technical team no nothing no experience in government so this situation in the whole region it's uh creating the perfect conditions for this kind of person to emerge politically my one of my main ideas about Latin America is that I believe we are making a mistake thinking politics in the region in the left and right Axis in the left and right political axis we used to do that in the 70s and 80s and we are prone to do that and say oh this is happening because uh governments are on the left or are on the right I believe that this is not uh the right way to see it why because if you see the region you're gonna see governments on the right and on the left that are exactly in the same problems and they have exactly the same challenges I'm gonna put some examples in Brazil we have Lula now but just few years ago the same people that bought it for Lula voted for bolsonaro the same people the same people that voted for boric in Chile just less than two years ago yesterday bought it for the far right in Chile in Peru Castillo that is considered extreme left Imp in Peru uh the major of Lima who is 30 of total votes in the country it's a far right guy who won the elections only months after Castillo's election Guatemala Guatemala secondary they're gonna have election these years you know who is leading the polls extreme far political candidate Rios extreme far what is happening in Paraguay just they say oh again a very conservative right a candidate from the right winning the election so when people talk about Nicaragua Venezuela Bolivia what is going on in Argentina in Chile they used to forget General but there are other cases in Latin America that is telling you a different story supposedly like Guatemala as I said what happened yesterday in Chile zone so my conclusion is that we don't need to see what is happening in Latin America in the political access left and right because I believe that there are other factors that are explaining what is going on now in Latin America that is having a democratic recession what are those factors and I'm gonna end here I believe that the X the axis of political preference has changed from left to the right has changed to the old establishment and the new people and the new ideas why because the priorities of Latin Americans are no longer if the state is big or the small more taxes less taxes I believe that now their priorities who is gonna solve my problems that are completely new I'm not accustomed to these problems the pandemic all these things and and I need new people fresh people because they're all political establishment has done nothing in order to help my family in order to give me answers to my Powers so I believe that's the that's the new access you know Julio I think you see this even even a small country like El Salvador where you have a cult of personality really right taking over because of the the terrible crime problems you know that that uh that's that El Salvador experienced so if the people there's a political crisis across the region which is depressing enough but I think it's going to get worse isn't it William because of of the economic Outlook could you share your perspective on the economic Outlook I mean I I was optimistic I thought you know when when we're beginning this sort of selective decoupling from China I thought the big benefactor could be countries in the Western Hemisphere as we Endeavor to make Supply chains more resilient and to diversify more broadly uh in areas uh like like rares and other minerals for example or various uh forms of manufacturing uh that where where Western hemisphere countries are very competitive uh in terms of labor costs and so forth but but your perspective is different you see an economic crisis coming can you explain that to our viewers yes of course uh the economic crisis is going to make the situation worse this uh new access in which people are deciding that your political authorities are leading to populist guys dictators guys as I already said that they have no plan no ideas improvisation so this situation that is now called Democratic recession is going to become a democratic depression why I believe that this is going to happen really soon in the next I would say three or four years because they are who who there are 11 elections in the next year and a half or so three years yeah in the next three years there are 11 elections just to have an idea of how the the brutal changes in Latin America if uh the 10 the trend is not changed what I was saying is that in the next future two factors are gonna be combined that will create a situation in with Latin America will face extremely challenging in terms of keeping democracy on the rule of law the first one is an economic crisis in the making uh one of the things that Latin America did in the last 30 years was to maintain macroeconomic stability order in the house but at the same time growing permanently why because International conditions were great for Latin America first of all interest rates were on floor second commodity prices were an historical highs and finally China and the world economy was expanding and of course the demand for Latin American Products increase if you if we remember that 80 80 of Latin America and GDP depends on those external factors is a good news and bad news good news because all this period we have been benefit for that but bad news because we don't have control of our destiny we are a natural resource-oriented religion why this is important in the analysis that we are doing in the next years it's important because those three conditions that I already explained have completely changed interest rates now are increasing very seeing significantly then commodity prices are really volatile we don't know where where are going and the global economy is in recession and it's a recession so what is what is already happening when you see the economic figures across Latin America this is not only a few countries but across Latin America is that debt rates has increased very high and they are really high and it's very worrisome the situation of Latin America manage external debt but at the same time fiscal revenues has decreased and the ability of the government to provide more services why because they call it destroy National savings across the region so we have one scenario in which the economy used to have a not very promising trend but the second factor and and this is more related with foreign policy is China and why because China is going to have the Plate serve in Latin America a fire sale right for China yeah of course I always say China is the is the pound shop of Latin America why because Latin America will need fast money quick money and non-question asked money in this situation in which we have under fiscal stress and no commercial banks no the inter-american development bank or the IMF for the World Bank are able to do that China is able to do that because it's a dictatorship they have vertical institutions and they can make decisions very quickly the presence of China in Latin America has been increased incredible in the last 15 years and China because of challenges that China has in his own economy China is forced to move resources from China to the developing world so in the next three or four years the result is going to be a region that is going to be under economic stress but at the same time pressures of liberal values and illegal ideas coming from countries like China and Russia that will that is that will keep trying to increase your presence and their ideology in the region and for our viewers I would like to tell them to to read more about this in your excellent Foreign Affairs piece recently on China what's in the region and and just a few statistics you know to continue in this conversation trade between China and economies of Latin America Grew 26-fold From to the year 2000 to the year 2020 and is expected to double by 2035. uh from 2018 to 2020 two-year period China invested 16 billion dollars in overseas mining including investing in South America's lithium triangle this is the area Argentina Bolivia and Chile and uh and and uh those countries of course account for 56 percent of the world's lithium resources which of course is is a mineral in very high demand because of batteries and electrification and so forth uh the PRC is the largest investor in Peru's mining sectors I'm sure you know controlling it is seven of Peru's largest minds and and so you you have that the economic influence growing but in a way that's predatory I mean I look at countries like like Ecuador you know and the huge Dam that was built in Ecuador that that what it was turned on the the uh turbines were turned on you know that they got clogged with silt they blew out the power grid uh and and Ecuador's indebted for many generations to China for this expensive and and uh an ineffective project but you know despite the that record it seems like their political influence is is growing along with the economic influence I mean I'm thinking of uh Lula de Silva's this is the president of Brazil meeting with Xi Jinping and and then tweeting we will work to expand trade and balance World geopolitics which he means balance against the United States uh Da Silva has said that hey Solinski he's just as responsible for the word Ukraine is Putin and and so uh so I I'm really concerned about this this movement uh toward China because uh because of China's liberal practices the setting of The Debt trap the effort to create servile relationships uh and then use those relationships for geopolitical influence and and really against U.S interests so could you what is your assessment of the situation what is your prognosis I mean uh is there is there a way out of this you mentioned one of the factors contributing to it is I think U.S disengagement from the region you know I had the opportunity to visit Panama for example uh last year and we hadn't had an ambassador there for six years so could you maybe share with our viewers what your what Your assessment is of Chinese influence in in the hemisphere and and what the trajectory is and what we can maybe do about it as well first of all I'm gonna talk uh as a Peruvian and Latin American who my objective is John is to look at the region and like country development and why I am against of I am worry about Chinese persons in the region why because uh uh first of all any investment is welcome it creates jobs uh new technology of course increased productivity a new uh culture exchange of information that's great but but if that kind of information is going to affect the rule of law is going to affect the respect for con for National constitutions is going to affect political sovereignty in countries and also at the same time it's going to affect Democratic Values then that kind of intervention needs to be regulated of course nobody is here talking about against Chinese investment no what I'm talking about is the corrosive Chinese influence in the in the region the good one we need to say okay that's great the good one but unfortunately Chinese presence a a big part of Chinese person is eroding rule of law institutions the Constitution and democracy let's put some examples for people to understand what what I'm saying long contracts Chinese are lending a money to many Latin American contracts countries and what are the conditions of those uh contracts for instance one condition is that the contract should be absolutely confidential the governments cannot publish cannot make public that is against our own rules and at the same time it give it takes degrees of freedom from Ministers of Finance to manage that at the same time for instance this kind of contracts also Force Latin American countries to pay first China in in relation to the other creditors if something goes bad this violates International standards and finally most of Chinese loans to Latin American countries include a clause in which set this country is going to pay the whole debt immediately if the country creates a public policy that it's against China right right not a public policy related with the contract a public policy in general this is just one example on how Chinese intervention that we can see oh it's good for a country indeed is eroding rule of law and institutions I'm gonna end with this why the rule of law and institutions over investment of that kind why because empirical evidence across the world said conclusively the two most important factors to achieve human progress and economic development are the rule of law and the quality of Institutions that's why I'm worried and of course there's no transparency associated with these agreements either and and you know I I think it's a setup it's a setup for a catastrophe potentially and I you know some things in life are black swans right unanticipated events with you know with unforeseen consequences and other things I think we could call them Pig flamingos I mean they're right in front of you and and they're quite obvious and I'm thinking about maybe potential geostrategic crises you know like we saw with the reinvasion of Ukraine in February of last year uh but also what what about something like even more aggression toward Taiwan or in the South China Sea what would the impact be on uh on on Latin America of a geostrategic crisis uh precipitated by Chinese aggression what what happens uh after China blockades Taiwan or even maybe tries a cross-trade invasion well what what China is doing it's uh it's transiting from a different kind of presence in the region at the very beginning you know some years ago China invested a lot in natural resources uh in particular projects and some infra structure utilities uh so they concentrated that their investment in Hardware would say hard work but now over the years the Chinese has Transit from Hardware control to software control what it means software control in the region means that China is trying to take control over the networks of how the economy works for instance Telecommunications value change uh important military posts a strategic critical infrastructure in the region like ports mega mega ports so what we are seeing is that China is updating his strategy in Latin America is no longer hardware and Mining and natural resources and food stuff now China it's taking control of the design of the architecture and now in the 21st century it's much more important to have control over the solar of the rules than over the hardware of the concrete things so and and this is the way they are they are doing this in Latin America uh what is going to happen for instance Chinese invention in Taiwan that nobody is talking about this uh it's gonna have critical consequences the next day not in the next two months but the next day why because one of the things that are going to happen is that the next day Latin American countries will have will receive a lot of political pressure from both China and the United States to take sides in the case of the United States to help or to complement efforts for economic sanctions they are going to be there we know they're gonna be there but on the other hand China that is going to push not to do that because of the incredible economic interdependence and the dependence that China has created in Latin America to its economy but economically also it's going to be effects in the next day if China embeds Taiwan and the reason is pretty simple uh China is uh it's gonna be limited in their value change production of technology and also industrial stuff and guess who are the most important providers of those kind of Natural Resources Latin America what is going to happen with China is going to adjust GDP growth immediately in that year and what is going to happen in Brazil Argentina Paraguay who export food stuff they're gonna be affected so invasion of Taiwan is gonna create political instability and is going to create a a back uh it's gonna have an effect on economic uh growth immediately of course affecting jobs affecting poverty and so on but this is Plus the idea that we already discussed so the situation is not the situation is not very promising you General said why the United States or the Western world are not talking about this and and I talked to to many many people here in Washington I met maybe more than 100 and not only experts but also International organizations to to raise awareness about this issue and um my guess why they are not talking about this is in part inertia inertia the fact that there were so many years the priorities of the state has been in other parts of the world second I believe that people took for granted Latin America yeah they believe that because we share cultural ties and we have been you know sharing liberal values they is not going to change and there was a mistake but I think there is another reason another and I believe that within the United States leaders has started losing faith in their own values and it's it's a bit sad but but it's true you see how U.S politics is going and there are people who are really rejecting American values and rejecting Western values and I believe that this has a huge impact of the decision of the U.S government to have a strong a solid foreign policy based on a couple of values democracy and the rule of law and I think that has been uh important in this situation yeah I think you make a really important point right we have to have a competent foreign policy and economic policy uh in in the hemisphere but we also have to be confident confident in our Democratic principles and institutions and and processes and I think our our confidence is shaken uh for a number of factors which we we can talk about it another time uh but I think it is immensely important to restore competence as well as confidence I wonder if you might talk about the effect that Chinese influence is already having in the in the region and I'm thinking in particular about the Pacific Alliance and how we took that for granted for for many years could you explain to our viewers what the Pacific Alliance is why it's important and what's happening to it yes of course uh the Pacific Alliance used to be the group of countries that were pretty aligned to Western values what are Western values free markets uh the protection of Human Rights the protection of minorities uh democracy Freedom those countries Mexico Colombia Peru and Chile indeed uh joined many years ago not only to create an economic block to take advantage of their capabilities to export to the world but fundamentally to create a political platform why to make sure that the advance of non-democratic initiatives could take over the region starting by Venezuela Cuba and now Nicaragua so that was the idea and the Pacific Alliance was important because there was a stability in that position if you put in a graph the political position of the Pacific Alliance over these decades in terms of foreign policy and the ideology of the governments you're gonna see that the political position in foreign affairs is the same but the government's changed Center left right at the end of the day those countries look pretty strong in spite of changes that could occur politically internally in the in those countries now that situation General has changed and that is a Breaking Point is an alarm for the Democratic countries in the world about what is going to happen in Latin America the balance of power between this illiberal left dictatorial left and the Democratic group this power of balance has been broken for the first time in in in in in in some decades we have the case of Mexico we are seeing how amlo is taking over institutions uh we are seeing this in the case of Petro who is not only negotiating but also makes uh make Maduro a very good friend of his and uh and also we are seeing this in in the attitudes that these countries had in the case of Peru for example amlo has been protecting has been defending Castillo all of this time when the international opinion all of them agree and of course peruvians agree that Castillo broke the law he violated The Constitution's more than one time in only five minutes of talking uh so you see that but also in Colombia there is information that they that people don't know about Pedro Petro resive Castillo lawyer in Bogota Petro met the lawyer of former president Castillo to talk about the situation of a president that was taken out from from Power because he violated the Constitution so what is the message that the Pacific Alliance and particularly Mexico and Colombia is given to the region the United States and the Western World you know what I don't care about the Constitution I don't care about the nature of a constitution and I don't care about the rules so if in the next two years something happened here I am anticipating how I'm gonna react and that's dangerous and that's that's pretty dangerous you could anticipate something from in the case of instability Bolivia or maybe uh Honduras or maybe even Argentina but it was really difficult to anticipate this kind of reactions for those countries and I think the Pacific Alliance is uh it's a it's a great example of uh of why we need to work really hard and we need to start recognizing that there is a problem if we do not recognize that there is a problem we're not going to do anything and and that's what I see what I'm feeling now and this is an area that has been neglected for too long I mean I I do think we did take it for granted I mean the trends were in a positive direction just I mean less than five no five six seven years ago this has happened uh pretty quickly in terms of this movement toward what you call on your excellent essay and Time Magazine uh Democratic depression and so I wonder if you could if you could take a projection into the future as that essay did and we're going to get a little bit more we're going to get depressed here I think she talked about this but maybe talk about the you know where you see the trends going in in the region over the next you know five years or so or or maybe even go country by country you know we have uh Guatemala has as Alexis on on June 25th uh Argentina Argentinian elections presidential elections are in October uh of course you mentioned all the problems in in Mexico I mean during the last election in Mexico the midterm elections over 100 politicians were killed where's assassinated in in the lead up to the elections uh its homicide rate is you know is 28 uh intentional homicides per 100 000 people we have border issues there obviously that Americans are concerned about and the fentanyl issues and the you know and and that election is coming up in July of 2024 so could you maybe summarize your essay about the Democratic depression that's coming and then maybe make some predictions about some of these near-term important political milestones yes uh I believe that the final shot the final bullet is going to be the economy because everything that we are talking now political crisis and all these problems within all these years happened in a context of continuous economic growth and now from now that growth is not going to happen so what is new in this new era for the region what is new is that political instability and crisis for the first time in more than 20 years is gonna be combined with an economic situation that most people are not going to be able to confront that is the news the economy is going to be the last bullet in Latin America in the last three years and this is pretty scary this is very scary because it is telling us that maybe the this decade is going to be the second last decade in Latin America the first one was the 80s but it looks like it's going to be the second last decade in Latin America in the usual the business as usual scenario of course is nothing it is done but I have half hope I have hope why because there are ways of doing something in my article in Time Magazine I uh I propose Ten Commandments that the Western World particularly the United States should follow in order to start thinking about designing a plan a plan that of course doesn't exist right right now um I'm not gonna go to the 10 but I'm gonna mention just a couple of them and the first one is honesty is you cannot do something if you do not believe on that and and I think what you wrote what you wrote is that the battle for Latin America is more about principles than economic need yeah that's yeah that's another commandment which is uh focus in which is important and here there is a a huge confusion even here in Washington that people believe that the way to go is to play the Chinese game is to fight Dollar by Dollar uh the competition of who pours more money in Latin America and that's a mistake it's a mistake for a different reasons it's a mistake because the United States cannot compete with a amount of resources but also the United States do not doesn't have the kind of institutions in order to do that like China but also it's a mistake because political liberalization does not follow economic growth economic growth does not end finally in democracies in general and and the other reason which is the point in my article is that here we are not fighting for money here we are fighting for principles and values and and hemispheric security that's that's the main point a Mystic security values and principles let's think how could you build the rule of law lose as the the rule of law and institutions how do you build that with values and ideas not with money countries has excelled in history particularly in modern history because they have been able to convert their ideas and values into institutions and those institutions are the ones who created wealth and economic progress not on the other way around so if we need to to fight or to win the battle in terms of ideas and principles then we don't need to invest in in physical capital we need to invest in human capital if the Chinese invest in natural resources mining if the Chinese invest in mines we need to invest in Minds and I think that's the difference if we train leaders if we work at the base of the social pyramid training people make them understand how democracy and how the rule of law is important for them for their children for their family then we're gonna have in the future a new generation of people that are going to have stronger values and they're going to be make better decisions we need to go this is the way to go this is the way to go to focus on human capital and to engage with Latin America in order to do that I talk about how to do that but I'm not gonna go deep in that in that issue here well you mentioned education you mean the problems in this essay could you maybe just say a little bit more about that in terms of of what you think could be done in a concrete way to improve education which of course in turn would help strengthen institutions and governance and and economic policies for example yes uh there are a couple of ideas the first idea is uh we need to be sure that more Latin Americans are engaged in the western Democratic educational system uh if you for instance just for put in an example if you look at the number of Latin Americans in terms of students faculty and researchers in American in United States campuses they are the minority we are under uh represented on those campuses we are not aware how can we expect that the Future Leaders who used to be the people who study abroad they are not being uh engaged of embrace how can we expect that in the future they could think like like us in terms of democratic values so when I went to different U.S campuses I saw many many people from Asia uh and I think that's great but I don't think that the number of people from Asia is just the result of economic growth and the market and and just spontaneous entity is it was political decisions from the universities to attract students from there so it's important to create incentives fiscal incentives for instance to private universities and other kind of incentives for public universities here in the United States to be able to attract more young people that in the future in the next 10 years are going to make decisions and the political level and also in the private sector level in different in their localities but also nationally so this is one big ambitious policy that we need to do and is doable why is doable because we are seeing that in the case of of of of Asia and the second idea is to create these centers for Democratic Leadership in Latin America across the region how they work uh in Latin America you have a huge dispersion of many organizations political organizations particularly young people but are despairs they are not connected they do not coordinate and they have a great heart but they don't have a very solid liberal idea so we need to go there in order not to create them from scratch but give them the tools what it means that create networks among them start understanding Lessons Learned giving the tools for mobilization and organization training them in why democracy and the rule of law is important helping them in order to and to express their ideas in the locality in a national level in the political the economics what I'm saying is at these centers could be very powerful if we follow if we manage it uh well and finally with this centers my idea is uh these centers should not focus the elites the Democratic Elites these centers should focus the base of the social pyramid where they fight for democracy is more intense than at the top and just to help give people agency right authorship over their Futures and help them recognize it in a democracy you do have a saying how you're governed if you're if you can organize and come up with these ideas and and turn these ideas into into improved policies and actions well I really I really appreciate it you know kind of ending on a higher note there but for those who are still depressed about the Democratic depression uh I think I think they might enjoy a cocktail at this point of the uh of this episode about Battlegrounds so Julio I'd like to ask you you know what is your favorite recipe for a Pisco Sour well there are several ones I I should admit but mine is one one one which means one cup of lemon one cup of Pisco and one cup of ice that's my favorite not my favorite but anyone who goes to Peru must have a bisco sour which is in my I I visited many many many countries in the world but honestly and transparently there is no better than Peruvian food and Peruvian Disco nothing you know when I traveled in Chile I heard similar but I didn't believe it I didn't believe it my early days in Peru convinced me that the best Pisco sours are are indeed in Peru as well as the best ceviche I would say yes of course Peru is the best place to eat in the world I'm sure for some final words to our viewers what what message would you like to leave them with uh especially you know our American and international audience uh who might want to know what they can do to uh to help address some of the problems we've talked about today yes I think uh as our reflection I think we need to to learn from history and and what history is telling us is that important things take time marriage friendship uh education human progress the most important things in your life takes time where when we talk about what is going on in Latin America we need to be uh we need to have this Tranquility to understand that this is gonna take time that maybe is this is not this is not going to be solved in the next three or five years but I assure that if we work 10 years we are going to see some results the Chinese has done everything that we are talking here in 15 years so why we don't have that patience and that perspective to do things causingly and Believe on that this is one and the second idea that I would like to share is that that for policy makers uh International possible is that Latin America is no longer Latin America of the 80s um sometimes when I talk to officials and I talk to people interested in the region they believe that they can treat Latin America like 20 years ago uh no the Dynamics of politics has completely changed starting for we are in a multipolar world there is no in the past that the only door that we can knock was the United States now we have others but at the same time 20 years ago Latin American countries were you know very depressed no economic growth now you have countries that the situation have changed and and fundamentally the difference now is that you have a romance a romance that is in the making and that romance is Latin American and Chinese Romans there is Latin America used to be used to be the partner of the of the Western World a rocky relationship of course a rocky relationship but at the end of the okay everybody was aligned with democracy when Freedom win rights right now that past relationship is being threatened and he's being challenged by a new Contender but a new uh Prince that is telling stories and they can finally get a a solid relationship that will that will in the long run that much everybody of us particularly peruvians and Latin Americans well I can't thank you enough and I I hope that maybe there will be some kind of a boulevardian reaction to to Chinese uh Chinese influence and and malign influence in particular in in the hemisphere Dr Julio Guzman in your recent essay in foreign affairs and today I really appreciated everything you had to say but but I really like this idea of investing in minds and my NDS correct and uh and of course that's what we Endeavor to do with uh with the Battleground series on behalf of the Hoover institution I can't thank you enough uh for helping us learn more about a critical and and sadly a neglected Battleground important to building a future of peace and prosperity for generations to come thank you so much for being with us thank you so much thank you very much Battlegrounds is a production of the Hoover institution where we advance ideas that Define a free Society for more information about our work to hear more of our podcasts or view our video content please visit hoover.org

Channel: Hoover Institution

Views: 82,641

Keywords: H.R. McMaster, Julio Guzmán, Peru, United States, Latin America, China, Investment, Institutions, Pedro Castillo, Economy, Democracy, Control, Peruvian politics, Peru Instability, Latin American politics, Latin American leadership, foreign investment, Latin democracy, China influence, political security, Peru security, US connection, battlegrounds, goodfellows, hoover institution, hoover institute, US and Latin America relations, latin economic trends, latin security, peru economics

Id: 3q09xnYKE48

Length: 59min 24sec (3564 seconds)

Published: Wed May 17 2023