Managua, Nicaragua (openDemocracy) – If we are to understand the evolution of the progressive Latin American countries one must remember that they have come out of a neoliberal period that affected the whole continent for more than two decades, starting in the 1980s. At the behest of dictatorships and guided by international financial organizations, such as the IMF and the World Bank, the economies were liberalized, the embryonic social security systems dismantled as states were subjected to structural adjustment – in other words to budgetary restrictions that were basically imposed in order to pay the interest on external debt.
Coming out of ‘neoliberalism’
Political resistance and that of social movements mounted in most countries of the continent and in a number of them succeeded in toppling the existing regimes, in particular through the ballot box.
In the case of Nicaragua and Salvador this only occurred due to guerrilla struggles. In others, attempted coups eventually led to elections, as in Venezuela. Elsewhere it was through elections. New political formations appeared, largely as the political expression of the social movements: the Workers’ Party (PT) in Brazil, the Movement towards Socialism (MAS) in Bolivia, the Sandinista National Liberation Front (FSLN) in Nicaragua, the Farabundo Martí National Liberation Front (FMNL) in Salvador, the Alianza País (AP) Movement in Ecuador.
These new political formations absorbed many of the irreplaceable leaders of the social movements, thus weakening them. In time, the new parties did not escape the traditional defects of the Latin American political sphere – nepotism, corruption, caudillismo (strong charismatic leadership) – thus losing some of their moral influence.
The new constitutions played an important role in initiating changes. In Ecuador and Bolivia huge numbers of people participated in preparing them and they introduced unheard of notions, such as buen vivir, inspired by the philosophy of the indigenous peoples, pluri-nationality and the rights of nature.
It was a difficult transition as it required building the new while the old structures were still in place – particularly in the economic field – with decision-making powers often located outside the continent, peripheral vis-à-vis the centres of capitalism.
Evidently there were strong reactions. Thus on the eve of the elections that were to bring Lula to power in Brazil there was a massive withdrawal of foreign capital. In El Salvador, at the beginning of the elections, there were rumours circulating that if the FMNL won, the United States would prohibit the transfer of migrants’ earnings, which are the main source of foreign currency in the country. In Venezuela, after the electoral victories of Chávez and Maduro, the local capitalists organized artificial shortages of basic consumer goods.
Latin America is the only continent where political systems have adopted post-neoliberal measures. It has not happened in Asia or in Africa, nor in the Arab world and even less in Europe where the European Union has been applying liberal measures ad nauseam in order ‘to get out of the crisis’, as if the crisis did not originate from those very measures! As for the United States, it was no exception to the rule.
Therefore it was necessary to reconstruct the functions of the State that had been eliminated by neoliberalism, which had however conserved or reinforced the juridical system as a means to protect private ownership of the means of production and also strengthened the forces of repression, abandoning social investments and public services for the sake of economic fundamentalism.
In the progressive Latin American countries, priority was given to the social and economic role of the State and to the development of public facilities, especially in the field of health and education. None of them took such advanced measures as the Cuban revolution had done. They all remained in the framework of a mixed economy, conserving the pluralism of education and health operators. The NGOs had an important role during the neoliberal period in making up for the shortcomings of the system mainly through numerous development projects. Their field of action however shrunk in recent years, which some interpreted as an attack on freedom.
Also, the world economic context contributed by favouring the countries of the continent that wanted to enter a post-neoliberal era. The price of primary commodities, oil, minerals, certain agricultural products increased and, for a decade, the foreign currency income grew considerably, thus facilitating policies for public investments and social protection.
At the same time, most Latin American countries experienced a relative de-industrialization and an acceleration of extractivism (mining and oil industries), which has generated social conflicts, notably with the indigenous populations that are directly affected. The fall in prices of oil and minerals since 2014 has caused serious problems for countries like Venezuela, Ecuador and, to a lesser extent, Bolivia. In addition, the crisis of the central capitalist countries impacted on the demand for primary commodities. There was a slowing down in the growth rate of China while the United States and their allies in the Gulf carried out aggressive oil policies to weaken their Russian, Iranian and Venezuelan adversaries.
In terms of social policies, progressive regimes gave priority to the fight against poverty. In a few years, thanks to programmes such as the bolsa familia in Brazil or the humanitarian vouchers in Ecuador, millions of people have been lifted from ‘extreme poverty’ and ‘simple poverty’, according to United Nations categories. These programmes, which are usually decentralized to the municipal level, are usually linked with the obligation to attend a health centre and the schooling of small children. This decrease of poverty should however not overshadow the fact that the Gini co-efficient (which measures the gap between the richest and the poorest) has hardly been affected. In fact, while the poorest have gradually got out of their situation (although the figures still stand at more or less 10 per cent, depending on which country), the richest have become even richer and, in countries like Brazil, much richer.
The contribution of these policies to relieving poverty cannot be denied. However, they ought to be criticized. This type of war on poverty does not produce ‘social actors’ but rather political ‘clients’. Moreover, the countries that have remained neoliberal, like Colombia, Mexico, Costa Rica and to a large extent Peru and Chile, have also started similar programmes, sometimes with similar results, or even slightly better ones. These measures are however taken in a different spirit. Inspired by the World Bank, they consider the reduction of indigence as a means to expand the market economy.
Broader access to health and education has also been a major goal for the progressive countries of Latin America. In Ecuador, in less than ten years, the number of pupils and students has doubled. University reform tends to reinforce the deficiencies of the system and four “super universities” have been created, mainly to respond to the demands of the sciences and high-tech sectors. A thousand ‘millennium schools’ have been constructed, replacing the small local schools in the rural regions. These schools gather various small rural schools in bigger ones, better equiped, but obliging children to make longer journeys and losing a good part of the bilingual programs, in Spanish and indigenous languages. The higher education policies are influenced by the desire to enter into modernity and follow the patterns of the European education model of the largely neoliberal Bologna Reform. Reforms in education thus turn out to be relatively technocratic, typical of the development approach (see below).
There is much investment pouring into infrastructures. Ecuador has built hundreds of kilometres of excellent roads in very difficult geographical conditions, particularly in the Andes. Brazil is multiplying its hydroelectric dams, especially on the rivers in the Amazon. Urban transport is being modernized, thanks to cableways and subways. Refineries, public buildings and airports are being built. Expenditure on country lanes, peasant agriculture (almost abandoned), bilingual schools, social housing (except in Venezuela) are of less importance. Industrial agriculture for export has escalated, above all in Brazil and Argentina: ethanol, agro-diesel, animal feed and GMOs are encouraged. This is part of the ‘new productive model’ in Ecuador.
Latin American integration
Important progress has also been made in Latin American integration. Venezuela has been the main driver of new initiatives. As in previous decades, two historical currents of thought are still vibrant in the continent. The first one advocates the integration of the ‘Great Country’ as Simon Bolivar used to say, and ‘Our America’, according to the Cuban José Martí. The second one favours integration with North America, in accordance with the Monroe Doctrine, ‘America for the Americans’, which opposed European colonialism.
The progressive countries opted for the first perspective. Hence the constitution of Unasur (Union of the South American countries), of Celac (Community of the countries of Latin America and the Caribbean), the work of Hugo Chávez and of ALBA (Bolivarian Alliance of the peoples of Our America), also conceived by the Venezuelan president. These initiatives are in addition to Mercosur (Common Market of the South) that groups together the countries in the Southern Cone and is a prolongation of the victorious struggle against the project of the US president, George Bush, the FTAA (Free Trade Treaty between North America and South America).
On the other hand countries that have stayed neoliberal are faithful adherents of the OAS (Organization of the American States), based in Washington. They have set up the nations of the Pacific Alliance (list the members countries Chile, Peru, Mexico?) to promote economic ties with Asia in a neoliberal framework with the United States.
For their part, the progressive countries have also taken some anti-imperialist measures: Ecuador has closed the US base at Manta; Venezuela regularly denounces the interference of US services supporting the opposition; and Bolivia has expelled USAID, the cooperation agency of the United States government.
Three development models
Which development models are being pursued by the progressive Latin American countries? There are roughly three different approaches.
The first project is what might be termed ‘neo-developmentalism’. It is a new version of the project championed by the CEPAL (UN Economic Commission for Latin America) in the 1960s, replacing imports through national production and the development of local capitalism. Ecuador, Bolivia and Nicaragua are clearly going in that direction, with the constitution of a modern capitalism opposed to the old oligarchies and accepting the war against poverty, the promotion of formal employment and the reduction of the informal, the setting up of social security and the need for a stable State financed by taxation.
The sectors of finance, internal trade and economic intermediaries with China all prosper. However, the growth of exports to finance the State necessitates new contracts with the extractive multinationals and agro-business and, because of the fall in prices, there is recourse to indebtedness with the World Bank and with the banks from North America, China and the Gulf countries – however on better conditions than previously. As a result there is less attention to ecological problems and little interest in the original peoples (in Ecuador), as well as opposition to the claims of workers, small peasants and the indigenous peoples, who are considered as obstacles to the model. There is a tendency to criminalize resistance and a centralized State is the instrument of these policies.
The second model is clearly social-democratic, accepting capitalism as the basis of growth and distributing part of the social product. This is the case of Brazil, where the Workers’ Party has encouraged the development of local capitalism in agriculture and attracted foreign capital. Never have the rich earned so much money but, at the same time, some 30 to 40 million have emerged from poverty. On the other hand, there has been no serious land reform and the new government of Dilma Rousseff includes a former graduate of the Chicago school as Minister of Finance and the former spokesman of the large landowners at the National Assembly as Minister of Agriculture. The Landless Peasants’ Movement (MST), after having supported the government during elections, have virtually declared war against it by returning to the land occupation of the latifundia, particularly the property of one of the government ministers. Argentina and Uruguay are in a somewhat similar situation.
The third case is that of Venezuela. There have been more serious efforts at peoples’ participation, with communal initiatives in which the grassroots decide on how to utilize part of the public budget. Towards the end of his life, Hugo Chávez stressed the importance of eco-socialism, integrating concern with nature into the socialist project. Unable to rely on the administration of the State at the beginning of his mandate, he set up, with oil revenue, a parallel State and organized different kinds of ‘missions’ for all the public service fields: in health, with Cuban doctors, education at different levels, the social economy, agriculture, indigenous peoples, etc. But the fundamental disease of Venezuela is the rent from oil, which has destroyed local production (everything being bought with petro-dollars), agriculture (70 per cent of food is imported) and all the social norms (violence is social and only partly political). The country has not left behind a political culture of corruption, even if there has been great progress in the social and cultural fields. The desire for fundamental change in the country explains the ferocity of the opposition.
The countries of the ‘citizen revolution’ in Latin America are post-neoliberal, but not post-capitalist. This can be explained by the strength of the system that imposes its laws on a global scale, but also by the social vision of leaders, who tend to modernize their countries rather than seeking a new paradigm for the collective life of human beings on the planet.
This is done with the support of a popular majority, formed partially by the ‘clients’ of the regimes motivated by the prospect of immediate advantages. Another major weakness of these perspectives is their ignorance of the ‘externalities’ implied by the economic model. They produce major ecological and social damage not taken into account in the development model.
It is certainly true that progress has been achieved, but it risks being eroded in more dire economic situations. True, also, that a return to power of the right would mean a remaking of neoliberalism with its great retinue of misfortunes. Nevertheless, the need to go beyond the present situation, which is recognized by several social movements, is absolutely fundamental.
Written byfor openDemocracy.