investment, not export of capital.
Japan didn’t allow export of capital until its economy had already
reconstructed. South Korea didn’t either, until forced to remove
capital controls and regulation of private borrow ing, largely under
U S pressure, in very recent years. (It’s w idely recognized that this
forced liberalization w as a significant factor in South Korea’s 1997
liquidity crisis.)
Latin America has the w orst income inequality in the w orld, and
East Asia has perhaps the least. Latin America’s typical imports are
luxury goods for the w ealthy; East Asia’s have been mostly related
to capital investment and technology transfer. Countries like Brazil
and Argentina are potentially rich and pow erful, but unless they can
somehow gain control over their w ealthy, they’re alw ays going to
be in trouble.
Of course, you can’t really talk about these countries as a w hole.
T here are different groups w ithin them, and for some of these
groups, the current situation is great—just as there w ere people in
India w ho thought the British Empire w as fine. T hey w ere linked to
it, enriched themselves through it, and loved it.
It’s possible to live in the poorest countries and be in very
privileged surroundings all the time. Go to, say, Egypt, take a
limousine from the fancy airport to your five-star hotel by the Nile,
go to the right restaurants, and you’ll barely be aw are that there are
poor people in Cairo.
You might see some out the car w indow s w hen you’re driving
along, but you don’t notice them particularly. It’s the same in New
York—you can somehow ignore the fact that there are homeless
people sleeping in the streets and hungry children a couple of blocks
aw ay.
Mexico, Cuba and Guatemala
W illiam Greider’s book One World, Ready or Not describes the
appalling economic conditions in Mexico. He says the country is
very explosive, politically and socially.
T hat’s absolutely correct. T hroughout the 1980s, w ages fell (it