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human rights in Brazil, Chile, Central America and Haiti, while Castro has sought dialogue with the Vatican to reduce the partial isolation of Cuba. At the same time, the more radical aspects of 'liberation theology' have begun to be eroded from two directions (Skidmore & Smith 2001, p416). Under Pope John Paul II the Catholic Church has turned towards a more conservative social role, while throughout the continent Protestant and Evangelical movements have made serious inroads. Likewise, there has been a recent charismatic revival within the Catholic movement in Latin America, using television and other media to complete with the Protestant Pentecostal movement (see Chesnut 2003). Thus, liberation theology can no longer provide a main engine for social reform, though Churches generally remain important watchdogs on human rights and in providing care agencies that help the poor. They also have a role in shaping moderate left political parties, e.g. Christian Democratic parties (see Lynch 1998).

7) It now seems possible that a more sophisticated pattern of neo-liberal reform is being applied to Latin America. Traditional neo-liberal reform towards a market economy, called the 'Washington Consensus', was based on 'fiscal discipline, "competitive" exchange rates, the liberalisation of trade, inward investment, privatisation and deregulation' (Sader 2003, footnote 2). There is now debate about adapting this formula. Thus a recent study conducted in part through the Inter-American Development Bank Research Department has suggested that new lessons need to be derived from the last decade of structural reform including (adapted from Lora & Panizza 2002, pp21-23). Through 1997-1998, a group of Latin American thinkers developed a 'third way' aimed at creating a more humane form of neo-liberal economic development, called the Buenos Aires Consensus, though this was not fully adopted (Sader 2003). This aimed at creating a 'strong, active and healthy state', eradication of poverty and corruption, selective and effective privatisation which is not merely used to pay off foreign debt, and avoiding the creation of private 'semi-monopolies' (Andres 1998).  Elsewhere, these approaches are termed 'post-neoliberal models' (Sader 2003).  Likewise, the regular social forums at Porto Alegre have been an important way of focusing on the need for cooperation on a host of social issues that support political and economic stability (Sader 2003). It must be remembered that sizeable sections of export revenues end up paying for interest on ongoing debt, e.g. in Ecuador, large proportions of revenues from increased oil production ended up paying interest on foreign debt, e.g. in 2000 of $2.4 billion of revenues through state-owned oil companies, some $1.3 billion went to debt servicing (Barthélémy 2003).

8) Some of these ideas are now converging on creating what might be calle a 'Washington Consensus' plus governance reform process that will lead to more stable outcomes (adapting Lora & Panizza 2002, p22, and the Buenos Aires Consensus): -

a. Structural reforms and economic growth are 'a necessary but not sufficient condition to improve the economic well-being of the poor'.

b. Structural reforms are not enough by themselves to cause high growth as compared to the fastest developing economies.

Lecture 12

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