The Search for Good Jobs.

For years Venancio Andrade eked out a meager living selling pots and pans on the dusty streets of Lima and neighboring towns. He eventually taught himself how to make aluminum kitchen supplies, and in 1985 he scraped together enough money to buy a parcel of land in a barren industrial park on the outskirts of the Peruvian capital. His ownership of property qualified Andrade for bank loans that helped his cooking- utensils company grow, and he now heads the business association of Villa El Salvador, a sprawling shantytown of 400,000 that sprang up on the edges of the industrial park. The 62-year-old Andrade has five full-time employees on his payroll, and during peak production periods employs as many as 30 people. By his own reckoning, it was the acquisition of formal property titles that made him and other small businessmen in Villa El Salvador viable clients in the eyes of prospective lenders. "Credit has allowed me to meet rising demand for my products when I need to produce more," explains Andrade.

In Latin America, Andrade's modest company qualifies as a success story. But it's still very much a rarity in a region where growth companies--and the good jobs that go with them--are very hard to find. According to Juan Somavia, the Chilean head of the International Labor Organization, some 100 million people (or 57 percent of Latin America's active, urban population) have "either no work at all, or work that cannot be considered decent." More than eight of every 10 new jobs created in the region since 1990 are in the so-called informal economy- -a vast, extralegal sector that encompasses the self-employed, street vendors and tiny shops that aren't registered to do business and mostly don't pay taxes. Across the board, the formal sectors of Latin American economies have been unable to generate enough traditional salaried jobs with health insurance and other benefits to keep pace with the expanding pools of available workers.

With urban unemployment hovering at 11 percent--its highest level in 30 years--tens of millions of Latin Americans must make ends meet any way they can by driving taxis, toiling in unlicensed sweatshops or selling pirated compact discs on city sidewalks. That is true even in Chile, South America's most stable and successful economy, where over the past three years, up to 90 percent of all new jobs have originated in the informal sector. The role of the informal sector is all the more crucial in neighboring Peru, where experts say the economy would have to grow by at least 7 percent each year to accommodate the demand for jobs.

What are the reasons for the job crisis? Years of corruption and economic mismanagement are two of them. For example, when Venezuela's President Hugo Chavez was elected in 1999, unemployment was already an abominable 13 percent. Four years of his unpopular economic policies and a deepening joust with political opponents have driven that figure up to 20 percent. --Venezuela's informal sector now accounts for more than half the work force in an oil-rich country that once boasted Latin America's highest per capita gross domestic product. But larger forces, often beyond the control of governments, may be even bigger contributors to the region's continuing dependence on the precarious informal sector.

During the 1990s neoliberal market reform programs sponsored by the International Monetary Fund to help combat the crushing foreign debt in countries like Argentina swelled the ranks of the jobless as government budgets were slashed, public enterprises were sold off and thousands of privately owned domestic companies were driven out of business by the onslaught of cheap imports. "The structural-adjustment era has not been a successful period anyplace for the IMF and the World Bank," says Columbia University development economist Jeffrey Sachs. "Their advice has been too simplistic [and] they share some responsibility." Latin America's chronic reliance on raw-material exports, and its inability to create new industries, also remain problems. More than 70 percent of the region's ...