The long anticipated collapse of the economies of Latin America is already underway. The facts:

1. • In Argentina, the currency devalued over 1,000% in less than four months and was close to a free fall as the Central Bank has no resources to stabilize the market and riots wracked provincial cities.

2. • Brazil approaches hyperinflation now running at close to 1,000% as the government has given up on trying to curb inflation through traditional means and resorted to extensive indexing to enable the people to cope.

The relations between Argentina and the United States have been characterized by long periods of distrust and mutual hostility alternating with relatively brief intervals of rapprochement and collaboration. This pattern of habitual antagonism followed by sporadic reconciliation has turned the Argentine-US relationship into a peculiar case of rivalry in the interamerican scene. However, there has never been a period such as the one between 1980 and 1989, in which the bilateral relations fluctuated so widely between conflict and harmony.

Last January marked the 30th anniversary of the Cuban revolution, and it could be that, within a decade, that small islandnation will be transformed once again. Since 1959, Castro's Cuba has remained a politically repressive, economically stagnant, militarily adventuristic state. The legitimacy of the Cuban regime depends, in many ways, on the persona of Fidel Castro; when he dies, the government will face by far its severest test to date and, most probably, at a time when a potentially deadly economic and systemic crisis continues to threaten the Cuban polity. Revolutionary or reformist elements will almost certainly emerge to demand change.

The nomination of Carlos Andrés Peréz as the presidential candidate of Venezuela's Democratic Action party (Acción Democrática or AD) and his triumph at the polls in December 1988 are just the latest examples of the AD Labor Bureau's success in being on the winning side in electoral contests. AD-Labor's well-demonstrated political clout underscores the importance of the relations between the Labor Bureau and the AD organization. An examination of the interaction between the two is especially in order because AD has emerged as a leading Latin American member of the Socialist International (SI) with its social democratic doctrine which assigns the working class a major role in the party and in the gradual achievement of democratic socialism.

Faced with limited opportunities for their primary-product exports, many developing countries have sought new strategies to develop manufactured products for export. Often lacking the necessary infrastructure for industrialization but possessing abundant labor resources, some developing economies have attempted to attract investment through assembly operations that promote domestic employment, exports, and local development.

With the outbreak of the Latin American debt crisis in late 1982, nervous bankers and hard-pressed debtors turned to the International Monetary Fund (IMF) for both short-term finance and macroeconomic advice. By 1985, however, steadily increasing inflation and stagnant output reduced what little appeal such orthodox IMF programs had ever enjoyed. In late 1985 and early 1986, Argentina and Brazil adopted new “heterodox” stabilization programs, whose essential elements included income policies to break inflationary inertia, monetary reform (especially the creation of new currencies), and a verbal commitment to fiscal restraint.