INTERVIEW, Page 12On Drugs, Debt and PovertyVenezuela's CARLOS ANDRES PEREZ sees the Third World as arevolution in the making unless richer nations come to the rescueBy John Moody and Strobe Talbott and Andres Perez
Q. Mr. President, you're seen as a spokesman for the Third
World. What should the relationship be between developing and
industrialized countries?
A. First, the countries of Latin America must make concerted
efforts among themselves, then coordinate with other developing
countries so as to enhance our bargaining power. There is a need
for a new North-South summit that would deal with some issues
involving the security of the whole world. I think we have to
recognize that today's problems are global and that interdependence
is both a problem and a solution. That's a central theme, and it's
why a North-South conference is indispensable.
Today we can identify three problems that affect the North and
the South equally: debt, drug trafficking and the environment.
These are three fundamental problems about which we could have a
broad and constructive dialogue.
Q. The Bush Administration has put forward the Brady Plan,
whereby the U.S. Government urges private banks to provide some
relief to debtor nations. Yet you've called it timid.
A. The problem is that it's not a plan -- it's an idea. What
we call the Brady Plan is an extraordinary initiative. It
recognizes that debt is a political problem -- one of the major
issues of world security -- and not just a matter between U.S.
banks and Latin American nations. The Brady Plan has as its basis
the reduction of debt and the realization that the countries of
Latin America cannot continue servicing their debt in the way the
banks have obliged us to up to now. In the past five years, Latin
America has paid back the total amount of its debt service, yet now
it owes more than before. And what is the result? The economic
growth of Latin America is now zero. Our countries have had to
commit more than 50% of the value of our exports to debt service.
That's intolerable. No country in the world can do this. If the
U.S. was forced to accept these conditions to pay its debt, that
would be really disastrous.
In order for the Brady Plan to be more than just an idea, in
order for it to work, the decision of the banks (to reduce debt)
must not be voluntary. The U.S. Government should modify certain
banking regulations to facilitate the concessions that the debtor
countries are asking for.
American public opinion must understand that we are not asking
for a gift or for debt forgiveness. We want a system of economic
relations that will give us guarantees so we can plan our economies
and develop our countries.
Also, it's just good business. The inability of (Latin
American) countries to pay their debt has created another problem
that is even more damaging than the debt burden itself: an
inability to import. Yet our countries are a market that is
indispensable to the growth of the industrialized nations. So
resolving the problem of debt means opening markets to the
industrialized countries.
In the 1970s Latin America imported from the U.S. significant
amounts of goods. In the 1980s that flow dropped as much as 80% in
some areas, such as automobiles and tractors. The decrease was a
fundamental cause of the great fiscal deficit of the U.S. The
recovery of Latin America's economy should have the same
significance for the U.S. as Europe's recovery had during the
Marshall Plan.
Q. What must the Latin American debtor nations themselves do
as part of this process?
A. If we don't reform our economies, we would just fall back
in the trap. Whatever accords we reach (with the lenders and
international bodies) would have to be conditioned on adjustments
that we make in our own economic systems. We've got to be able to
ensure that the resources generated from debt reduction and new
financing are used according to very specific investment norms and
according to economic procedures in line with our realities.
Q. You are a lifelong socialist. Yet now you are relying on
market mechanisms, privatization, letting prices and interest rates
find their own levels. It looks like an economic philosophy closer
to Ronald Reagan's and Margaret Thatcher's. What's socialist about
it?
A. I know that the word socialism smells like the devil in the
U.S., but it shouldn't be that way. The Communists expropriated
the word socialism, so people now identify it with
Marxism-Leninism.
What we're doing is not a contradiction of our ideology. Price
controls were a consequence of the lack of markets, the lack of
development and the existence of monopolies and oligopolies. These
deficiencies required policies that should have been temporary but
became permanent. Now we're correcting past errors. What is
dramatic is that we're doing it all at once.
Q. The other two problems you stressed were drugs and the
environment.
A. Drug trafficking has two facets: production and demand. If
there were no demand, there would be no production. But production
has many facets of its own, among them the poverty of our peasants
in Bolivia, Peru and Colombia.
We have to find a substitute crop (for coca), and the economic
and technical resources, as well as the political will, of the
North must play a role. We must attack this crime without borders
with a policy without borders. Otherwise we will never be able to
eliminate it.
As for the environment, Europe and the U.S. have caused great
damage, but we (in the Third World) have also contributed. In Latin
America we have the great Amazon region. The great depredator of
the environment is misery and poverty. If we don't correct the
problem in countries that still have great ecological resources,
then humanity will see itself in the long term confronting a
tragedy of survival.
Q. Venezuela has recently joined the Non-Aligned Movement.
There's a view in Washington that the NAM is less relevant and
coherent than in the past, that it has split up into regional and
parochial groups. So you've joined a club just at the point when
that club might be going out of business. How would you respond to
that?
A. People in Washington should realize that the world is
changing. Five years ago, who would have hoped for the
extraordinary opening in East-West relations? I know that the
Non-Aligned Movement, which represents some 120 nations, is often
criticized, especially by industrialized countries, for its radical
positions and for the way it acts in concert. But the fact remains
that the Non-Aligned Movement has led to a new awareness among
developing countries. The purpose is not conflict and
confrontation, but dialogue.
It's true that recently there has been a lack of coherence in
the developing world. That has been one of the most worrying
factors of the 1980s. This has been a perverse decade, a profound
crisis for all of our countries. Economic problems are more serious
than they've ever been. The poverty of our countries consists not
just of groups of people in misery, which is still the case in the
developed countries. For us, poverty is taking on structural
characteristics that really threaten the future of humanity. We
are all feeling this, and it's driving us toward convergence. The
Non-Aligned Movement is part of that convergence.
Q. What do you mean by convergence?
A. I mean a consensus among all the countries in the world on
the essential problems from which the developing countries are
suffering. In general, that the political struggle (between North
and South) has been de-ideologized.
I wouldn't say that I put all my hope in the Non-Aligned
Movement. Absolutely not. But it's an organization that could serve
the right objectives, and it could increase our power of
negotiation if we know how to use it. No doubt the problems of
Latin America are different from those of Africa or Asia. But there
is a common denominator, and it's our shared need to exert pressure
on the developing world in a determined way.
Q. When you talk about common denominators and exerting
pressure on the industrialized North, are you advocating a debtors'
cartel?
A. No. Such a thing would be an act of suicide -- and of
collective suicide. Theoretically, we might have the power to
provoke a great worldwide financial crisis that would be a
catastrophe for the industrialized countries. But we would also
suffer. So this would be like the biblical story of Samson pulling
the temple down on his head.
Q. Countries like Venezuela, when they got into economic
trouble in the past, used to be able to say to the U.S. "Watch out
or we may go Communist. Help us." Isn't that now changing?
A. The ghost of Communism has done much damage to relations
between the U.S. and Latin America. Under the pretext of defending
the region from Communism, the U.S. supported military
dictatorships. This was a terrible error. Now we don't need to look
for ghosts. We have realities. If the problems that our countries
face are not resolved, the social explosions would be of a
magnitude previously unimagined. I'm not just imagining this. The
world today is much more complex. Before the days of mass media,
radio and television, the poor were more resigned to their fate.
Without television, they didn't have any possibility for
comparison. That's why today's poverty is more dangerous and could
provoke terrible social upheavals -- a Latin America in
effervescent rebellion. We are facing certain danger. If we don't
deal with this catastrophe, military dictatorships could come back.
Q. What is the ghost we have to be frightened of today?
A. The immense gap that is opening up because poverty is now
intolerable. And the poor man now knows how poor he is. He has his
transistor radio. That's not a ghost but reality.
Q. Did the price riots that flared up last February here in
Caracas and left 300 dead provide a glimmer of that danger?
A. I think so. That tremendous social explosion came about
because of the dammed-up frustration of the past eight years, the
decline in living standards. Now, this year, in Venezuela we're
going to have a dramatic drop, almost 10%, in our gross national
product as a result of our adjustment measures. If we don't
straighten out this situation, if we don't have the resources to
confront this violent decline, the social situation will reach
intolerable extremes. And it's not just us; all the countries of
