1) The document discusses four cultural obstacles to economic development in Latin America: resistance to change and lack of support for entrepreneurship, absence of confidence and legal insecurity, fragility of democratic institutions and rule of law, and the influence of the military. 2) Latin America is very resistant to change which glorifies the past and protects existing privileges over innovation. This hinders entrepreneurship. 3) The region also lacks confidence and suffers from legal insecurity, undermining development. Predictability is needed for economic growth.

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QUO VADIS, LATIN AMERICA? FOUR CULTURAL OBSTACLES TO ECONOMIC
DEVELOPMENT
Óscar Arias Sánchez
Former President of Costa Rica
Nobel Peace Laureate 1987
Samuel P. Huntington Memorial Symposium:
“Culture, Cultural Change, and Economic Development”
State University Higher School of Economics
Moscow, Russia
May 24, 2010
My friends:
In the eternal dialogue that a nation can sustain, through literature, with the men
and women of distant places and centuries long past, there is no better narrator than the
Russian people. I believe that the world has known no other country so well through its
books, as it has known Russia through the pages of Tolstoy, Dostoevsky, Pushkin,
Chekhov, Gogol, Turgenev, and Pasternak – the pages of that vast inventory of writers
who have, with the stroke of a pen, captured the essence of this vast land.
For much of the human race, the first contact with Russia is made aboard a train,
next to Anna Karenina; or perched upon a speeding troika, alongside Dimitri Karamazov;
or braving a snowy duel with Eugene Onegin. Long before our eyes first behold the onion
domes of Moscow, we have navigated, in our minds, the icy waters of the Volga. We have
raced across the stones of Red Square. We have prayed in the Orthodox cathedrals. We
have listened to the sad notes of the balalaika. We have heated in our samovars a cup of
tea on a winter’s afternoon. That is why coming to this place is, for me, a return: a return
to those words that, so many years ago, etched the image of Russia into my memory.
Tonight, I come before you hoping that my words might etch the image of Latin America
into your own recollections. And though I know that I cannot hope to match the eloquence
of those towering giants of Russian letters, I trust that the sincerity of my message will
make up for its literary shortcomings.
To speak of Latin America is to tell a story with a moral. When any group sets out
to discuss development strategies, the region I call home is an obligatory reference, the
writing on the wall. With very few exceptions, the countries of Latin America have
struggled longer than any other, since the moment of their Independence, to reach the
threshold of the industrialized world. And yet, nearly two centuries after our separation
from Spain or Portugal, there is not one developed nation in Latin America today. Where
did we go wrong? Why did other countries, once far behind us, achieve in a short time the
things that have taken us so many years? Why do we find ourselves, decade after decade,
on the waiting list of humanity?
Many leaders in the region will respond to these questions with conspiracy
theories, and excuses full of self-pity. They will say that we were the spoil of a Spanish
empire that made off with our riches, and an American empire that continues to bleed us
dry. They will say that the international financial institutions have conspired to hold us
back, and that the laws of globalization were deliberately designed to keep our region in

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the shadows. In short, they will say that the blame for our underdevelopment belongs to
anyone but Latin America itself.
But the truth is that so much time has passed since the birth of our States that our
leaders have lost the right to use others as the excuse for their own failures. No one else is
responsible for the direction we have taken. It is true that various powers have attempted
to influence, and have influenced, the designs of our peoples. But that is the story of any
country in the world. It would be dishonest to claim that today’s developed nations were
never the victims of hegemonic pressures. It would be dishonest to claim that only Latin
America has faced an uphill battle in history. The fact is that we began this race with
conditions equal to, or even better than, the rest of the world. We were the ones who fell
behind.
When Harvard University opened its doors in Cambridge, in 1636, there were well-
established and nearly centennial universities in Santo Domingo, Dominican Republic; in
Lima, Peru; in Mexico City; in Sucre, Bolivia; in Bogotá, Colombia; in Quito, Ecuador; in
Santiago, Chile, and in Córdoba, Argentina.
In 1820, the Gross Domestic Product of Latin America was 12.5% more than that of
the United States. Today, if we exclude Brazil, the region represents barely a third of the
U.S. economy.
We won our Independence 100 or 150 years before countries such as South Korea
and Singapore, which, despite their past as colonies of empires that took advantage of
them, and despite their lack of significant natural resources, today exceed, several times
over, our per capita income.
Handing out blame and searching for enemies is easy. What is difficult, but also
essential, is recognizing our own responsibility in the course of history.
To date, Latin America has been allergic to any serious examination of conscience.
Our region is still a showcase of nationalist slogans and anti-imperialist diatribes. It is
continually overrun by generals and comandantes dedicated to waging war against the
phantoms of their own minds and imaginary foreign threats. Victimization continues to be
the best-selling sentiment in our catalogue, and our governments are still experts in
inventing pretexts and justifications instead of delivering results. The price we pay for our
reluctance to look in the mirror is a population that is more and more disillusioned with
politics, a population that is more and more tired of empty words and meaningless
promises.
That is why events like this one are so important, because Latin America needs a
wake-up call for those who continue to beat their heads against a Wailing Wall; a mighty
shout to bring to its feet a region accustomed to living on its knees. If Latin America can
recognize that she herself is responsible for her failures, then Latin America can finally
understand that she herself is capable of rewriting her history. Achieving this begins with
accepting that there are features of our culture, and of our idiosyncrasy, that chronically
undermine our chance of reaching a higher state of development.
These features are present in every aspect of our human life, from religion and
family, to politics and macroeconomics. Tonight I would like to emphasize four great
obstacles to development in Latin America: resistance to change, and the consequent lack
of support for entrepreneurship; the absence of confidence, and its corollary, legal
insecurity; the fragility of democratic institutions, and of the validity of the Rule of Law;
and the military force that, like a bird of ill omen, pursues our people without rest.

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I believe Latin America to be the region of the world that is most resistant to
change. We glorify our past so ceaselessly – in speeches, in pamphlets, in history books –
that we make it virtually impossible to propose adjustments or variations in our way of
doing things. Instead of a culture of improvement, Latin Americans have promoted a
culture of preservation. Our political dilemmas consist, not in selecting the best public
policies to reach specific objectives, but in selecting the best ideologies to protect traditions
handed down to us by distant caudillos. Constant, patient reform, the only kind of reform
that is compatible with democratic stability, seems uncomfortable to us. We prefer the
drastic, and generally chaotic, revolution that promises abundant treasures and lush lands,
only one insurrection away.
It would be easier to understand resistance to change in countries like Norway or
Canada, which have achieved enviable levels of human development. But resistance to
change in countries such as Guatemala or Nicaragua is truly surprising. In these cases, the
conservative impulse springs, not from a desire to preserve the status quo, but from a
dread of the unknown; from a disproportionate interest in protecting established
privileges; and from a great fear of loss, even if what we will lose are circumstances that
are disagreeable or adverse. We live by the phrase, “better the devil you know than the devil
you don’t.” We hold on tight, even to our pain and suffering – because we do not want to
lose the certainty of our present, in a quest for an uncertain future.
Fear of the unknown is part of being human. It is natural to feel anxiety and
trepidation in the face of the undiscovered. But in Latin America, that fear paralyzes us. It
generates not only anxiety, but also catatonia. To make matters worse, our political leaders
have not developed the patience and skill that are necessary to walk our peoples through
the processes of reform, informing them and guiding them. Many times, I have said that to
govern is to educate. A leader must be the first interlocutor in a democracy, the person
most eager to respond and to explain. But in our region, perhaps because of the machismo
that even today provides us with picturesque examples of the political strongman, leaders
often justify their means with a simple “because I say so.”
This goes hand in glove with our desire to protect established privileges. The
prerogatives of teachers’ unions, for example, have allowed educators in many Latin
American countries to decide for themselves how much they would like to work, and
what they care to teach in their classrooms. The same thing happens with concessionaires
and contractors in the private sector, who, thanks to sinecures and illicit transactions, have
provided low quality services to our States for decades, with no fear of competition. The
immobility of our public officials also conspires against our development. Our Civil
Service rewards, with automatic salary hikes and promotions, those who do no more than
sit at their desks and say “no.”
This manifests itself in many aspects of our economy, but particularly when it
comes to our attitude towards entrepreneurship. Latin America is a region with more
controllers than entrepreneurs. We are suspicious of new ideas and lack effective
mechanisms to support innovative projects. He who seeks to develop a new business in
our region, must begin by wading through waves of bureaucracy and requirements. This
is costly in terms not only economic, but also psychological. There are few credit options
for entrepreneurs, little legal protection, and scarce academic offerings.
I wish to emphasize this point: our universities are not forming the professionals
that our development demands. Latin America graduates six professionals in social
sciences for every professional in the exact sciences, and for every two professionals in

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engineering. Social scientists are necessary, but not three times more so than engineers.
Our region cannot, and will not, advance as long as its education system reflects an
obsolete society.
Truly, visiting a Latin American university campus is like traveling to the past. It is
a return to the ideological confrontations of the sixties or seventies, as if the Berlin Wall
had never fallen, and as if today’s China and Russia did not have productive systems that
emulate those of the United States and Western Europe. We are preparing our young
people for a reality that no longer exists. Instead of giving them practical tools to help
them manage a globalized world, such as technological and language skills, and support
for entrepreneurs, many of our schools devote themselves to teaching authors no one
reads, and repeating doctrines in which no one believes.
This must change. Our countries must begin to reward those who dare to innovate
and create. They must give priority to private initiative and recognize personal success.
They must invest in science and technology, and reform their academic offerings. They
must broaden their credit options and simplify processes for those who decide to start
their own businesses. They must attract investment and promote the transfer of
knowledge. In other words, they must understand that pragmatism is the new universal
ideology. They must understand that, as Deng Xiaoping once said, it doesn’t matter if the
cat is black or white, as long as it can catch mice.
The second obstacle is the absence of confidence, and in particular, the legal
insecurity in our region. No development project can prosper in a place where suspicion
reigns, in a place where the success of others is viewed with misgiving, in a place where
personal drive is met with wariness. Latin Americans are the most distrustful people in
the world. We doubt the true intentions of all those who cross our paths, from our
politicians to our friends. We believe that everyone has a secret agenda and that it is better
not to get too involved in collective efforts. We are captives to a gigantic “prisoner’s
dilemma” in which each person contributes as little as possible in his zeal to watch his
back.
The most rudimentary value in a globalized world is trust. Now that we are
inextricably connected, we have no other option than to take advantage of our alliances
and make the best of our union. The countries most ready to trust are the countries most
ready to develop, because they can base their actions on a reasonable expectation of how
others will behave, including the State.
The issue of legal security is an Achilles’ heel of Latin America, and one of the
attitudes that most urgently requires a shift in the coming years. Ours is still a region full
of surprises, in the worst sense of the word. With alarming frequency, our citizens do not
know what the legal consequences of their actions will be, or how the State will react to
their individual projects. There are countries where businesses are expropriated without
any justification; where permits are revoked because of political pressure; where verdicts
fly in the face of the law; where the strongest powers reign over the weakest rights. There
are countries where the legal situation is so voluble that it impedes the attainment of long-
term goals.
The English say that legal security is the protection of trust. Our citizens, our
entrepreneurs, our business leaders, must be able to trust that the State will act in a
predictable manner. They must be able to anticipate the legal consequences of their
actions, and make their decisions based on those expectations. And they must be able to
trust that others, too, will act in accordance with the rules of the game.

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This leads me to the third obstacle I would like to mention: the fragility of our
commitment to democracy, and the validity of the Rule of Law. With the sole exception of
Cuba, Latin America is entirely democratic today. After centuries of civil wars, coups
d’ètat and military dictatorships, we have finally made democracy the only possible
system for our peoples. This is an extraordinary accomplishment that should be
recognized and celebrated. But the victory is incomplete.
Despite our political constitutions, our international treaties and our grand
proclamations, the truth is that we continue to be a region prone to authoritarianism. The
recent experience of Honduras, victim to the region’s first coup d’ètat of the 21 st century,
showed us just how weak our institutions continue to be, and just how fragile our
democratic guarantees really are.
I do not think I need to mention any names for us to understand that in today’s
Latin America, there are leaders who have made use of democratic structures to subvert
the very basis of democracy. Upon election by the people, they interpret their mandate as
carte blanche. They use their power not to promote the human development of their
peoples, but to persecute their opponents, to shackle the media, and to seek reforms that
allow them to stay in power forever. They have erased the borders among the three
powers of the State; they have twisted the rules to fit their plans; and they have limited
individual rights, especially freedom of expression.
We must never confuse the democratic origin of a regime with the democratic
function of the State. A government born of democracy loses its right to use that word
when it resorts to dictatorial vices. That is precisely what has happened in Latin America,
with the support populations who continue to see messianism and demagoguery as the
exit from their labyrinth of underdevelopment.
Let there be no doubt: if Latin America does not soon receive the fruits of
democracy, if it does not reach the threshold of development, if its citizens’ hopes remain a
dream deferred, then the phantom of authoritarianism will continue to rise again. The first
action we must take is to show our citizens that democracy works – that it truly can build
more prosperous and equitable societies. If we cannot do this, how can we expect that
people consumed by hunger, fear and ignorance will continue to have faith in democracy?
It is urgent that we reform the workings of our States so they are better able to
execute public policy. The sclerosis that, until now, has characterized our governments is
the worst trap for our development, and for the stability of our democracies. Improving
the public response to citizen demands, and increasing our fiscal resources by taxing the
richest among us, is essential if we are to move towards a true culture of liberty.
But increasing public income is not enough. We must also spend those funds with
conscience. We must establish priorities, and plan with human development in mind. In
this area, Latin America has run up an immense debt, because it has not only spent too
little. It has also spent poorly. It has lavished upon its armies the money it should lavish
upon its children. It has assigned to the purchase of weapons, the funds it should assign to
the purchase of computers and medical equipment. This is the final obstacle I will mention
tonight.
Our region spends, each year, 60 billion dollars on arms and soldiers, despite the
fact that not one nation, with the exception of Colombia, faces an armed conflict. This
represents an increase of more than 100% in the past five years. Once again, I ask: Who is
Latin America’s enemy? Who is going to attack us? Our enemies are hunger, ignorance,
inequality, disease, crime, and environmental degradation. Our enemies are internal, and

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can never be defeated with a new arms race. They can only be vanquished through smart
public policy.
As you know, Costa Rica was the first country in history to abolish its army and
declare peace to the world. Our children have never known military service. They have
never seen the shadow of an armored helicopter, or the tracks of a tank. Since the abolition
of the armed forces, 61 years ago, Costa Rica has never suffered a coup d’ètat. I would like
to think that all of Latin America might follow in Costa Rica’s footsteps, but I know that
utopia will not be possible in my lifetime. I also know, however, that a responsible and
gradual reduction of military spending is not only possible, but also imperative.
We owe it to the victims of dictatorships, who during the 20th century wrote with
their own blood the saddest pages in Latin American history. We owe it to the survivors of
oppression and torture. We owe it to those who saw their worst fears realized in the
presence of a soldier. Spending more on our armies does not make us safer. Security lies in
human development.
Abandoning this military culture is also essential because of the idea expressed by
Isaiah Berlin, that intellectual colossus born on Russian soil: “Men do not live only by
fighting evils. They live by positive goals, individual and collective.” The increased presence of
soldiers in our towns and cities promotes a combative attitude that does not favor
development. It teaches us that problems are best solved by fighting the enemy, rather
than building in solidarity with our brothers and neighbors. It teaches us to view reality in
a negative way, to think of our life as an endless battlefield, instead of fertile ground
where dreams can grow. It teaches us that conquests are attained with weapons, shouts
and threats – and not with words, with respect, with tolerance. The militarism of our
culture is a regressive and destructive force. We need to replace it with a culture of peace,
a positive culture dedicated to pursuing the happiness promised by the declarations of
Independence of the Latin American nations.
My friends:
I cannot argue with the claim that, with the exception of Don Quijote, every
madman who seeks to right the world’s wrongs ends up in Latin America. My region is
such a marvelous place that one wants to erase the sorrows of its history, to give it a clean
slate and a new life. But at the end of the day, that new life is one we must create
ourselves, with constant reform and a healthy dose of self-criticism.
Our ability to confront the mirror and to look upon our face, unveiled, is crucial if
we are to understand that we must change our attitudes. We must lose our fear of change.
We must embrace the entrepreneurship of this new century. We must generate confidence
among our citizens. We must strengthen our democracy and our Rule of Law. We must
abandon the military practices that continue to rub salt into the wounds of our past. We
must pursue the happiness of our peoples – because then, and only then, shall we be
worthy of the privilege of being born in that corner of the universe.
I am deeply grateful to Larry Harrison, and to all the organizers of this event, for
giving me the opportunity to speak to you this evening. I hope that my words have
sketched in your minds an image of the obstacles my region must overcome. I hope that
you will take with you the idea that Latin America has everything it needs to take its place
at the vanguard of humanity, if it is brave enough to change its way of thinking. That is

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the conviction of this unshakable optimist who believes, like Dostoevsky, that “only one
thing matters, one thing: to be able to dare!”
Thank you very much. Спасибо.