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The countries of Latin America (including South America, Central America and the Caribbean) represent a new hope and inspiration for many people in the majority world, as well as social justice campaigners and progressive analysts. After decades of economic failure in the region since the 1980s, rising populist regimes have led the way in denouncing the global development orthodoxy commonly known as neoliberalism, while US influence across the hemisphere has declined dramatically over recent years. As new left-leaning presidents reject the US-backed model of free trade in favour of regional versions of commerce and cooperation, Latin America is being closely watched in its attempts to build an alternative economic model that prioritises pro-poor development, the redistribution of natural resources and people-led social change. History: Cycles of Debt and Inequity The control of the economic systems in Latin America has oscillated between the hands of the market and the state ever since the spread of independence in the early 19th century. Following an ultimately troubled period of government intervention in the economy of countries such as Brazil, Argentina and Mexico between 1950 and 1980, diminished confidence in the competency of the state led to a renewed openness for the perceived efficiencies of the private sector. In the context of a global recession in the late 1970s and early 1980s, the new acceptance of Reagan and Thatcher's radical free market economics began to take root across the region - pioneered and implemented most famously by Augusto Pinochet's military dictatorship in Chile. When the ‘lost decade' of the 1980s drew to a close, with most of the continent burdened with substantial foreign debt, the region's average GDP per capita was 8.2 percent lower than in 1980.[1] In the perceived absence of other possibilities, local economists and politicians opened their doors to the so-called Washington Consensus model of development as prescribed by the International Monetary Fund (IMF) and World Bank, entailing the structural adjustment policies (SAPs) of trade liberalization, deregulated markets and the privatization of previously state-run industries. Although independent reviews of SAPs in Latin America and the Caribbean reported consequent increases in poverty, inequality and unemployment throughout the 1980s and 1990s,[2] many local leaders readily welcomed the liberalising economic reforms. Many pundits have since characterised the region as the ‘great neoliberal experiment of the world' - the developing continent where economic liberalisation was carried to the fullest degree under the watchful eye of the neighbouring United States. The flaws in the World Bank and IMF's rhetoric were fundamentally exposed when Argentina, the poster child it had exalted as an example throughout the 1990s, underwent a spectacular economic collapse in December 2001. By the time neoliberal policies peaked in influence in 1999, 43.8 percent of the region was living in relative poverty and 18.5 percent in extreme poverty,[3] fuelling a rising tide of popular movements and a search for alternative regional economic models that benefit the poorest members of Latin American societies. Led by progressive leaders such as Venezuela's Hugo Chavez and Bolivia's Evo Morales who both reject the dominant economic globalisation model, unions and trade agreements are forming across the hemisphere to promote and facilitate a more equitable regional integration. Often drawing upon the symbolism of Simon Bolívar, the great liberator of Latin America from colonial rule, government leaders are largely united in their interest in regional integration even though their outlook across the region differs. Alternatives include ALBA, the Bolivarian Alternative for the People of our Americas (a regional trade bloc based around the principles of social, political and economic integration), the Bank of the South, and UNASUR (Union of South American Nations, a South American political, financial and energy alliance modelled on the EU). Disagreement between members has hampered the successful running of some of these institutions, particularly the Bank of the South, although others have proved to be an expression of successful regional integration, most notably UNASUR which has offered solid political support to its members in the international arena. Other regional alternatives are based around the sharing of natural resources, in particular Venezuela's oil which Chavez has used to assist other nations in times of energy crisis, or to buy up parts of fellow Latin American nations' debts. The country is making cheap oil available to its neighbours and has implemented trade pacts such as Petrocaribe, which allows Caribbean countries to purchase Venezualan oil under preferential terms of payment. Although critics express concern over a heavy reliance on the volatile commodity of oil, Venezuela does not currently appear in danger of entering into a precarious current account deficit. As a response to the prevalence and influence of US media sources, the governments of Venezuela and other progressive Latin American countries have launched Telesur, a pan-Latin American television channel funded by participating governments and managed by sympathetic intellectuals and media figures. The region is also making a concerted effort to fully repay IMF debts in order to buy freedom from the Fund's prescriptions, and most governments have rejected the proposed Free Trade Area of the Americas (notoriously described by President Chavez as an "annexation plan" for the exploitation of Latin America). The Rising Tide of Popular Movements Historically characterized by imperialism and inequality, Latin America and the Caribbean have today become a fertile breeding ground for powerful popular uprisings. Across the region, groups of indigenous people, women, people of African descent, landless farmers, the unemployed middle classes and ordinary citizens are raising their voices to insist on social change and economic justice. Their protests, which demand not only their rights but a reinvention of the state along democratic lines, have gone hand in hand with the election of progressive leaders in Argentina, Bolivia, Brazil, Cuba, Chile, Ecuador, Nicaragua, Uruguay and Venezuela, as well as in important cities such as Bogotá and Mexico City. The most emblematic recent examples of protest have been the successful mass movement against the privatization of water in Cochabamba, Bolivia in 2000, and the spectacular spontaneous uprisings against the attempted coup to overthrow Hugo Chávez in Venezuela in 2002 which achieved his reinstatement into the Presidential palace the following day. The multitude of movements have gained strength in numbers through a degree of regional coordination, expressed in gatherings and conferences such as the Americas Social Forum, the People's Summit of the Americas, and Hemispheric Conferences against Militarization. This unity is building against the backdrop of the global justice movement, for which Latin America has a symbolic value after hosting the first World Social Forum in Porto Alegre, Brazil, in 2001. Increased Social Responsibility Although Latin America has a history of extreme economic inequality and neglect of the poor, certain governments are now undertaking serious initiatives to combat poverty. In the most prominent cases of Venezuela and Bolivia, the nationalization of lucrative resources of oil and natural gas provide platforms from which to offer services and redistribute wealth to the marginalised sections of society, and Venezuela is making use of its natural resources to support the poor around the region. The anti-poverty initiatives include Bolivia's improved health and education systems for those living below the poverty line, Brazil's Zero Fome (Zero Hunger) plan consisting largely of family grants, Bogotá's increased attention to education and human security, Uruguay's ambitious anti-poverty plan, PANES, and Venezuela's series of Misiones, which target health and education through such innovative methods as the exchange of oil for Cuban doctors. Whilst destitution remains unaddressed in some countries across the region, most notably Haiti, in others anti-poverty initiatives are working to effect - attested to by the UN Food and Agricultural Organization's declaration of Latin America and the Caribbean as the best performing region in hunger reduction in the developing world.[4] The question of land rights is a striking example of Latin American inequality. Land rights are concentrated in the hands of a staggeringly small minority, and many smaller farmers have been forced to abandon their rural livelihoods and migrate towards the burgeoning city slums. About half the farms in the region have no title deeds, which greatly jeopardises any leverage to claim rights to the lands which the mostly indigenous and afro-descendent communities have inhabited for generations. Government implementation of promised land reform programs is still limited, however, leaving many farmers without land or lacking the infrastructure and rural credit to make it productive. As a result, farmers' discontent has contributed to the formation of influential peasant movements such as La Via Campesina, or the Landless Workers' Movement (MST) in Brazil which has successfully resettled more than a million people on idle land. The movement has also developed one of a series of independent production co-operatives which are being developed as agricultural alternatives across the region. For example, Misión Zamora in Venezuala, a government program that functions alongside an urban land distribution initiative, has distributed land titles to over 1.2m farmers and provided them with accompanying training and funding.[5] Such land reform measures remain deeply controversial in Latin America, as highlighted by the ongoing class conflict instigated by Bolivia's landed elites - a country with one of the most unequal concentrations of land ownership in the world.[6] However, by addressing inequality and helping to solidify the rights of small farmers and indigenous communities, land reform represents a great promise across the region for moving towards an agricultural system that prioritises food sovereignty. In some cases progressive change in Latin America is openly visible and quantifiable, but in others it remains unclear whether the rhetoric of charismatic leaders matches the reality on the ground. Economic policy is a particularly ambiguous area. Whilst countries across the region are joining regional financial institutions, many leaders who promised to transform their country's economic system when they gained power have done little to diverge from orthodox economic policy once elected. Brazil, Argentina, Uruguay, Peru and Ecuador all fall into this category. As President Tabaré Vásquez of Uruguay explained at the Fourth Congress of his party, the Frente Amplio, "aspiring to the impossible is as irresponsible and reactionary as resigning oneself to the status quo".[7] The extent of the continent's implication in the economic downturn since mid-2008, with Argentine and Brazilian stock markets falling dramatically between June and October 2008, further questions the rhetoric about decoupling from international financial institutions (IFIs). The case of Brazil sending its troops to participate in the US-led removal of Haiti's democratically elected president also raises serious concerns about regional integration. Venezuela and Bolivia are the two countries which have undertaken fundamental economic reforms, but the US government and local critics argue that the implementation of the reforms is excessively authoritarian and a threat to democracy. Under pressure from IFIs, the United States, and certain wealthy Latin Americans who hold influential positions in financial institutions and reject the call for change, the task ahead for the new progressive governments is clearly not easy. Beyond the influence of Venezuela's oil reserves, heavily indebted nations remain at the mercy of Washington's benevolence, and the balance between submission and authoritarianism is an issue of valid contention. However, important steps have been taken towards an economy that is at the service of the state, the people and the environment, and this alone constitutes a credible challenge to Thatcher's assertion that a fully liberalised market is the only way. [1] ECLAC (UN Economic Commission for Latin America and the Caribbean), ‘Economic Survey of Latin America and the Caribbean 2007-2008' ECLAC report, August 2008, Chapter V, p.91 [2] cf. SAPRI (Structural Adjustment Participatory Review Initiative), ‘The Policy Roots of Economic Crisis and Poverty: A Multi-Country Participatory Assessment of Structural Adjustment', SAPRI report, Washington, April 2002. [3] ECLAC (UN Economic Commission for Latin America and the Caribbean). ‘Social Panorama of Latin America 2000-2001' , Summary, ECLAC, September 2001, p.13 [4] FAO (UN Food and Agricultural Organization), ‘Monitoring MDG and WFS targets: Latin America and the Caribbean', FAO Working Paper Series, February 2006, p. 23 [5] Hugo Chavez, Interview with Mark Weisbrot, Znet, 2 December 2003, retrieved 13 November 2008. <www.zmag.org> [6] Samual Grove and Pablo Navarrete, A Revolution without Borders: Reappraising Bolivia's Crisis, Transnational Institute, 17 December 2008. [7] Waksman, 2003, cited in Patrick Barrett, Daniel Chavez and César Rodríguez-Gavarito, The New Latin American Left: Utopia Reborn London, Pluto Press, 2008, p.125 |
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