Latin America Meets a Collapsing State1

Latin America was founded by the only European power that had failed to experience renaissance or counter reform. Spain was, to be sure, in its middle medieval stage when venturing to America

Latin America Meets a Collapsing State

Beatrice E. Rangel

Afghanistan and Somalia have been the poster boys for a collapsing state. And as students go through Political Sciences 101 their teachers invariable repeat that such developments are not likely to take place in the Western World given that most went through nation building exercises stemming from the Renaissance and the Counter Reform.  These experiences led Western nations to build resilient and self transforming institutions.

His indeed seems to be case for Europe and the US. But Latin America was founded by the only European power that had failed to experience renaissance or counter reform. Spain was, to be sure, in its middle medieval stage when venturing to America. And as a proper medieval power, Spain’s intellectual might did not revolve around wealth creation but rather on matters of such transcendental significance as the relation of faith to reason, the existence of God, the development of theology and metaphysics, and the categories of knowledge. And from the operational point of view Spain’s focus was on conquering territories with its peoples to secure possession by the Spanish Crown.

The nations minted in the Spanish coinage thus were closed, corporativists and mercantilists. Neither of these foundational pillars are particularly good at adapting to or fostering change. Because as societies progress people desire more freedom and as economic growth proceeds people desire to participate through revenue sharing means. Institutions thus need to change to accommodate new groups; interests and wealth creation conduits. Development outcomes tend to crash against an institutional framework designed to control au lieu of governing people and to extract rent au lieu of creating wealth. As time passes and technology disseminates information and knowledge to ever increasing audiences and at lightening speed the mediaeval architecture begins to crack. It eventually explodes.

This has been the story of Latin America. Passage from agricultural to manufacturing was heralded by civil wars. These internecine wars dynamited the system. Institutions were rebuilt at the turn of the 19th century and beginning of the 20th century. The medieval edifice was then dressed up with features from libertarian systems existing in Europe and the United States. The newly minted republics crashed once again at the next development stage. Rebellions and guerrilla movements sprouted south of the Rio Grande. These conflicts came to an end through a mix of military repression and internationally backed negotiations as late as the 1990s. The hemisphere however had been spared the experience of nesting a collapsing state. The closest to this outcome had been Paraguay after the Chaco War and Haiti after Aristide and the earthquake. But the 21st century is the innovation era and technology opened the way to the advent of this experience.

An unexpected actor was invited to the Latin-American power stage: organized crime. Advances in technology have facilitated the development of effective value chains for organized crime. Institutional cracks all over the Latin America, a history of impunity when it comes to corruption and technology advances that allow organized crime to create parallel financial and communications networks have worked the miracle of provoking the collapse of Venezuela. The country opened the door to organized crime when it decided to grant safe haven to the Colombian guerrillas Today the Venezuelan state has been penetrated by organized crime and it is collapsing under public policies that favor the richest spread ever of illegal activities spanning from drug trafficking to counterfeiting to terrorist financing. And this nation is propelling out of its border about 20% of its population that fearing violence; and death through famine or disease is literally stampeding out of Venezuela. These people are creating untenable pressures on public services of South American countries as they spread disease and chaos in the terrorized flight. Soon they will also be used by organized crime to establish outposts for its illegal activities. That will be the time when the international community will realize that it needs to take severe action. Lest the world can afford to live safely with a 21st Century Port Royal of continental dimensions.


Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.
For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O’Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador.

Published by on Monday, August 27th, 2018

*The opinions published herein are the sole responsibility of its author.*