History: The Roadmap to the Future--Latin America

Ecuadorians have voted in referendum to accept a new constitution promoted by their leftist President, Rafael Correa. Although he is a leftist, I strongly support several points of the new charter.

For starters, and the biggy, the new constitution is designed to help break the stranglehold on the economy caused by a select few, the descendants of Spaniards, owning large land holdings. This is a common problem across Latin America and the Philippines. Not only are their the direct effects such as preventing or hindering many people from owning their land property, but there is also a cultural effect which hampers the development of these Hispanic cultures (I am including the Philippine culture as Hispanic in this case). The concept of being wealthy in much of East Asia and the West is of a diligent, hardworking businessman. Even in countries which have family-based oligarchies, such as South Korea, those oligarchies are involved in active business, and the roots of those chaebol only date to the 1950s, so in many cases the original entrepreneurs are still alive.

In Latin America and the Philippines, the traditional concept of being wealthy is owning a large ranch, or hacienda, and being fairly idle. In much of East Asia and the developed West, being wealthy is to work and earn lots of money. In the Philippines and Latin America, being wealthy is NOT having to work, but instead to be able to be lazy.

It is easy to see why much of East Asia and the developed West are wealthier and more advanced than Latin America and the Philippines.

Tack onto this that many poor Filipinos and Latinos thus believe that to have wealth, you need land--but to have land, you have to be wealthy. Therefore, if you are poor and landless, you cannot become wealthy.

LINKS

The new Ecuadorian constitution is supposed to allow the state to seize and sell unused land and to ban large holdings of land. Such land redistribution should occur in many Latin American countries and the Philippines. Countries such as the Philippines and Mexico should also permit foreigners to buy and own land--though they could limit the amount of land citizens of any single country, or all foreign countries, can own.

The constitution would also let Ecuador consider some foreign loans to be illegitimate, and so Ecuador would not have to pay off those debts. While this is bad, it would be convenient if the Philippines could simply remove its enormous public debt--which is preventing further loans and deterring investment, which in turn is preventing much needed infrastructure overhaul and growth--by declaring the old loans illegal.

While the BBC simply calls the constitution "controversial," the response from the "Economist" is far more telling. Although their article on the subject is generally negative, there is notably few actually criticisms of the mechanics of the constitution. Either the author of the piece did not read the constitution, or even the anti-economically-leftist "Economist" sees some value in what the new constitution can accomplish.