A specter is haunting Latin America — the
specter of socialism. From the Rio Grande to Tierra del Fuego, alternatives
to the Washington Consensus are being developed and leftist governments are
being elected. A 200-year legacy of U.S. intervention in the form of the
Monroe Doctrine, “dollar diplomacy,” CIA-backed dictatorships,
and the International Monetary Fund appears to be coming to an end.
Neoliberal capitalism has failed so spectacularly that philosophical and
political independence from the United States are finally not only
possible, they are also an absolute necessity. The socialist governments of Latin America can be
divided into two different but not antagonistic camps: the populist,
pro-Castro governments of Venezuela’s Hugo Chávez and
Bolivia’s Evo Morales; and the more market-friendly, reformist
administrations in Brazil, Argentina, Uruguay, and Chile. It appears likely
that 2006 will see Mexico replace the pro-Bush Vicente Fox with moderate
leftist Andrés Manuel López Obrador, and Nicaragua could re-elect Reagan’s old
nemesis Daniel Ortega. Next month, Peru could turn markedly to the left if
retired Gen. Ollanta Humala, a Chávezlike populist, is elected. Perhaps the key event in recent Latin American history
has been the economic collapse of Argentina in 2001 and that
country’s subsequent rejection of the IMF’s mandates. IMF
free-market policies allowed speculators to drain capital from Argentina,
and it has been President Nestor Kirchner’s interventionist practices
that have stabilized the economy. Over the last three years the Argentine
economy has averaged 9 percent growth. With help from loans by Venezuela,
Argentina has been able to pay off its debt to the IMF and undo some of the
damage done by that institution. As Kirchner said, after paying off the
debt, “The IMF acted towards our country as a promoter and vehicle of
policies that caused poverty and pain among the Argentine people.”
The same could be said for many countries of the world. The most entertaining and probably most important
politician in Latin America today is Venezuela’s Chávez. As
the world’s fifth-largest producer of oil, Venezuela and its politics
are vitally important to the rest of the continent and to the United
States. In 2002 Washington supported a coup against Chávez. The coup
failed; the underdog Chávez became an international hero and our
administration once again sullied America’s reputation abroad. While
not necessarily supporting Chávez’s brand of personality-based
populism, other nations in South America are delighted to work with
Chávez and his oil wealth. Venezuela’s purchase of Argentine
treasury notes helped make that country independent of the IMF and American
financial institutions. Many believe that Chávez will support
Bolivia in a similar fashion. Plans are now being made for a
7,000-kilometer oil pipeline to Argentina, and Venezuela has helped Brazil
by purchasing 36 fighter jets there. Venezuela and its oil money are
essential in Latin America’s move toward economic independence. Brazil is emerging as the leader of an economic bloc
that has demonstrated it has the ability to thwart the United States and
Europe, particularly in the area of agricultural policy and pharmaceutical
patents. Meetings of the World Trade Organization, which used to be a romp
for the wealthy nations of the north, are grinding to a standstill because
of the spirited resistance of the “G-20,” a bloc of developing
nations that includes Brazil, India, and South Africa. Brazil, like
Argentina, has announced that it will no longer borrow money from the
International Monetary Fund. It is too early to predict how successful Latin
America’s socialist governments will be. The United States and its
version of capitalism, particularly under our current administration, have
little credibility. The system has failed to deliver. Unregulated
capitalism has achieved the only two things it is capable of doing: driven
down wages for workers and maximized profits for the wealthy. This economic
model is proving an empty promise, a dead end for most of the planet. In
their effort to create a future they control, the people of Latin America
are developing an alternative to the neoliberal feudalism emanating from
Washington and Wall Street. The rest of the world is watching closely.
This article appears in Mar 23-29, 2006.
