Washington consensus? nonsensus! U.S. President Bush said his administration would-look-south. It couldn't have done much worse. (Trade Talk).

Democracy has returned to Latin America in a big way. Strong political parties are advancing and hemispheric trade is flourishing. Despite these inroads, the region is in crisis{

In 2002, Latin America's economy shrank 0.5%. Scared investors( took US$39 billion out of the region; unemployment hit a historic high of 9.1%; and 7 million more people plummeted into the ranks of the extremely poor, surviving on less than $1 a day, according to the U.N. Economic Commission for Latin America and the Caribbean (ECLAC). Forty-four percent of Latin Americans are now poor, the commission reports.

Venezuelans continue to battle over beleaguered President Hugo Chavez In Colombia, the civil war, once a mountain phenomenon, has reached the cities. Belt-tightening programs required by the International Monetary Fund have caused social upheaval and riot deaths in Bolivia. And the failure to reach agreement on the status of millions of illegal Mexican workers in the United States, what Mexican President Vicente Fox hoped would be the centerpiece of the first democratically elected government in 71 years, instead could help usher in the return of the corrupt Institutional Revolutionary Party in 2006.

Although democratic institutions in Latin America are "much stronger than 10 or 20 years ago," they haven't improved lives, according to the Inter-American Dialogue, a Washington policy think tank. At this grave juncture, you would think that Washington would have a coherent policy toward the region. It doesn't.

How far has Latin America dropped off President Bush's radar screen? Consider this: The United States has virtually abandoned Argentina, whose economy shrank by 12% in 2002, not to mention Haiti, which remains an economic basket case eight years after U.S. intervention. In January, the leaders and representatives of 119 countries attended the inauguration of Brazil President Luiz Inacio Lula da Silva, the newly elected leader of the world's ninth-largest economy. One of the lowest-level guests attending was U.S. Trade Representative Robert Zoellick. Several weeks later, Clay Johnson (Clay who?), a little-known White House aide, headed the U.S. delegation at the inauguration of Ecuador's President Lucio Gutierrez.

To be sure, Washington has done some things right. It has promoted stronger trade relations by beginning negotiations to create a free trade agreement with five Central American countries, and by wrapping up a free-trade agreement with Chile that must still be ratified by Congress. The administration has also battled corruption by denying visas for tarnished leaders, adding right-wing paramilitaries to the State Department's list of terrorist organizations (the leftist groups were long ago designated so) and approving a $30 billion rescue package for Brazil.

Guns and butter. But Washington must come up with a vision that addresses more than security issues. Under the rubric of fighting terrorism, drug and arms trafficking and organized crime, Bush has overturned a two-decade ban on high-tech arms sales to Latin America, which could spark an arms race. The U.S. military buildup is the most intense in the region since a series of coups brought military dictatorships to power in the 1960s and 1970s.

Latin America needs a major change in policy, even a Marshall Plan to help governments combat the poverty and chaos encroaching on their countries. "We have to make sure our (trade) partners are fed, healthy, well-educated and capable of taking on the challenges of a more competitive global environment," says Miguel Diaz, who heads the South America Project for the nonpartisan Center for Strategic and International Studies in Washington D.C.

Naturally, the war in Iraq and the global fight against terrorism have consumed Bush in the post-9/11 era. But, in the long run, the United States will pay dearly for policy lapses in its own hemisphere. Without strong U.S. leadership, Latin America can expect more political instability, drugs, illegal immigrants streaming into the United States and, most importantly, more disillusionment with democracy and market-centered economies.

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